• The Importance of Marmet v Brown to Nursing Home Malpractice and Wrongful Death cases

    Tuesday March 19, 2013

    The U.S. Supreme Court case of Marmet Health Care Center v. Brown, decided on Feb 21, 2012, shows the advantage of a properly written and signed arbitration agreement in order to keep claims out of court where jurors decide and instead allow an arbitrator to decide the outcome.

    Before Marmet, several states completely prohibited nursing homes from compelling residents to give up their right to a jury trial and declared all arbitration agreement in nursing home admission contracts to be unconscionable.

    After Marmet Health Care Center v. Brown, nursing home owners and operators can have confidence that properly drafted and executed arbitration agreements will keep inevitable claims away from jurors.

    Litigating claims in court can lead to unexpectedly high awards. Arbitration of claims is generally seen as offering significantly less potential for runaway jury awards by eliminating the emotions that fuel them. More predictable losses should result in lower overall claim payments, safeguarding funds that are better spent caring for residents. For these reasons, many long-term-care facilities have sought to use arbitration agreements when contracting with their residents upon admission. Plaintiffs often seek grounds to avoid the enforcement of arbitration agreements, in order obtain for themselves the potential of a much larger jury award.

    The U.S. Supreme Court noted that in Marmet, arbitration agreements signed predispute, were enforceable and not void as a matter of public policy.  That Court went on to say "Congress did intend for the federal arbitration act (FAA) to take precedent over state law.

    Properly drafted and executed arbitration agreements between facilities and their residents are generally enforceable. The impact that arbitration has on dispute resolution is so important that we expect to see it used routinely. Of course, care must be taken to avoid unenforceability, as is the case with any contract.

    The most significant of these are a lack of mental capacity to consent, fraudulent inducement to sign, duress and unconscionability. Long term care facilities who choose not to utilized arbitration agreements will be well-advised to reconsider.

    Arbitration agreements will go a long way toward reducing inappropriate and huge jury awards, allowing for better provision of care for nursing home residents.

    For information on the provisions needed in arbitration agreements to increase the likelihood of being enforced or how the train your facility in getting them signed by the appropriate person(s), please contact:

    Lavonya K. Chapman, Esq., RN.|Director of Claims/Litigation
    Arthur J. Gallagher Risk Management Services, Inc.

    2200 Woodcrest Place, Suite 250

    Birmingham, Alabama 35209
    lavonya_chapman@ajg.com

     

     

     

     

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