Arbitration Agreements in Residency Contracts Offer Valuable Protections—Part III

Over the past few months, I have explained how arbitration agreements can help save your company money, and described several “best practices” for drafting arbitration agreements.  As I wrote last month, getting your case into arbitration is all about putting your defense attorney in the best position possible when he or she moves to compel arbitration.   The final step to doing so is ensuring your admission staff is properly executing an arbitration agreement with each new resident.

By far, the most important step is to have the proper party sign the agreement.  The resident should be the first option, unless he or she has been determined to be incapacitated or suffers from dementia, Alzheimer’s, or other mental challenges.  In that case, the resident’s representative should sign.  Bear in mind, though, that courts will usually only enforce agreements signed by a representative who holds power of attorney—a healthcare surrogate cannot bind a resident to an arbitration agreement.

Next, your admission staff should be trained to adequately explain the arbitration agreement.  Your staff should explain that (1) arbitration is a form of private dispute resolution; (2) by signing the agreement the resident is waiving the right to a jury trial; (3) the agreement is optional; and (4) the resident has the right to have legal counsel review the agreement prior to signing.

Finally, emphasize to your staff that each agreement must be fully executed.  This means that (1) all information must be filled in (e.g., resident name, effective date, etc.); and (2) the resident or representative must sign on the correct line, as must the facility representative.

It has been a pleasure contributing to the Gray Area of the Law blog.  I hope that through these posts you have learned the importance of arbitration agreements and how to best position your company to obtain that 16% savings on your litigation budget.

The law governing the enforceability of arbitration agreements is very nuanced and varies from state to state. Always consult with your attorney before making any changes to your existing arbitration agreement.

Spencer L. Payne is an associate in the Fort Lauderdale office of Quintairos, Prieto, Wood & Boyer, P.A., where he practices commercial litigation with a focus on nursing home and assisted-living facility, medical malpractice, premises liability, and construction defect defense.

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