Arbitration agreements benefit senior living communities and yet are not frequently used.
Controversy surrounding whether arbitration agreements are enforceable has deterred many operators from implementing them. The facts are plain, however: Arbitration agreements are better for both communities and families. The group that does not see a benefit are attorneys, both plaintiff- and defense-oriented.
Arbitration agreements help residents and their families.
It may come as a surprise, but the use of arbitration more frequently results in a monetary award to the resident or estate than does litigation. There always is the risk in the litigation process that the resident could receive no compensation. Arbitrators work to efficiently resolve a claim, and doing so typically is achieved through awarding some money.
Resolving a conflict through arbitration is faster than taking a lawsuit through trial. Litigating a case to resolution takes from two to 10 years, depending upon the jurisdiction. By comparison, arbitration resolves a dispute, on average, within six to 12 months. Families and residents want closure, not stressful litigation.
Arbitration agreements help communities.
Arbitration agreements help reduce the uncertainty that comes with going through a trial. The agreements reduce this uncertainty because the process generally is faster, which also means reduced expenses. Arbitrators understand better than juries the care at issue and the standards that apply to senior living providers. or higher.
The agreements also reduce the likelihood of runaway jury verdicts. Arbitrated case awards very rarely reach seven figures. When the possibility of a large verdict such as those that dominate the headlines is taken away, the claim is less attractive to the top plaintiffs’ attorneys.
Arbitration agreements do not help attorneys.
Arbitration agreements do not help any attorneys, regardless of who they represent.
For plaintiffs’ attorneys, the standard fee percentage occasionally increases beyond 40% if the amount awarded equals to or exceeds seven figures. Because most arbitration awards do not reach that level, however, this provision is not triggered. Defense attorneys charge for services at an hourly rate. Therefore, there is a benefit to keeping the lawsuit going for as long as possible (that is, to take the matter to trial).
Convey the benefits to residents and families.
It can be daunting to explain arbitration while establishing a relationship with a potential or future resident and his or her family, but there are methods to make the process smoother.
The first and most important step is to assure the resident that any care provided, amenities offered and availability of services will not be affected by the agreement. Remind the resident that he or she has the right to review the agreement with his or her attorney and he or she can cancel the agreement within 30 days of signing it.
Another benefit to arbitration is the confidentiality of the process. Residents might not like to have their personal medical information detailed in complaints and available to the public.
All senior living providers should implement arbitration agreements to protect the community and staff members. A best practice would be to follow the Centers for Medicare & Medicaid Services guidelines for skilled nursing facilities and then have a local attorney review the agreement to further ensure that it conforms with any applicable state laws.