Maryland Nursing Home Arbitration Clauses May Be Procedurally or Substantively Invalid

The right of unhindered access to the court system is one of the bedrock principles the founding fathers enshrined in the United States Constitution. At its essence, the concept stands for the proposition that anyone who has been harmed by another party should have equal access to a neutral forum that will hear the evidence presented and decide the case.

Signed ContractAt the same time, parties generally have a right to freely structure business arrangements through the use of binding contracts. A common example of this is an arbitration clause that may be included in the pre-admission paperwork in a Maryland nursing home facility.

What Is Arbitration?

Arbitration is an alternative to the court system, in which an arbitrator – rather than a judge – will hear the evidence and come to a conclusion. Arbitration is less formal than the traditional court system, and may have slightly different rules of evidence and procedure. Generally speaking, parties that frequently engage in litigation prefer to arbitrate claims. This is because arbitration yields a faster result, is less expensive than, and more private than the traditional court system.

Arbitration has its drawbacks, however, for those who rarely engage in litigation. For one, the money and time savings are likely less important to a party who is bringing a lawsuit after the loss of a loved one. Similarly, in most arbitration clauses, the party writing the contract chooses which arbitrator to use. This introduces the potential for bias. Indeed, studies have shown that nursing homes tend to fare better in arbitration than they do through the traditional court system.

Defenses to Arbitration Clauses

Not all arbitration clauses are valid. There are several reasons why an arbitration clause will be deemed invalid by the court. Two common reasons are procedural and substantive unconscionability.

Unconscionability is a doctrine of law that is concerned with the unfair nature of a contract. For example, if the terms of a contract are so unfair as to favor one party to the detriment of the other, the clauses at issue may be substantively unconscionable. Similarly, if the manner in which the contract was executed was unfair, the contract may be procedurally unconscionable.

A recent news article discusses a court’s rejection of a nursing home arbitration contract on procedural unconscionability grounds. In that case, the court determined that the nursing home did not inform the resident that the arbitration agreement was voluntary when it told him to sign the form. Additionally, the nursing home staff member covered the text of the clause by folding the sheet of paper up to expose only the signature line. The court held that the resident was not fully apprised of the potential consequences of signing the arbitration agreement, and determined that it was invalid.

Have You Signed an Arbitration Agreement?

If you or a loved one has recently been told that you must submit your case against a Maryland nursing home through arbitration, you should contact the Maryland personal injury law firm of Lebowitz & Mzhen Personal Injury Lawyers. At Lebowitz & Mzhen, we have decades of experience standing up for the rights of injury victims in Maryland, Virginia, and Washington, D.C. We take our role in protecting the rights of Maryland’s nursing home residents very seriously, and advocate for our clients at every opportunity. To learn more, call 410-654-3600 to schedule a free consultation to speak with an attorney today.

More Blog Posts:

State’s Push for Stricter Reporting Requirements in Cases of Nursing Home Sexual Abuse, Maryland Nursing Home Lawyer Blog, published June 21, 2018.

State Attorneys General Call Nursing Home Reforms into Question and Call for a Reevaluation, Maryland Nursing Home Lawyer Blog, published June 7, 2018.

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