When someone begins residence at a nursing home, a lot of documents need to be signed by the resident or someone acting on his or her behalf. More and more often, one of those documents is an arbitration or mediation agreement. In effect, the resident is signing away the right to take any disputes to court and agreeing to have all disputes settled in binding arbitration or in mediation. Nursing homes like arbitration because it reduces their costs. The process tends to be faster than court (which means lower attorney’s fees), and awards tend to be lower. For that last reason, residents and their loves one might not like the process. Also, in arbitration, each side pays its share of the arbitrator’s fee. You can read more about the pros and cons of signing an arbitration agreement here.
The amount awarded — if any — may also be less if an arbitrator hears the case than it would be if a case went to trial, say experts.
Aon Global Risk Consulting analyzed 1,449 closed claims involving long-term-care providers between 2003 and 2011 and found that there was no money awarded in 30 percent of claims where a valid arbitration agreement was in place, compared with 19 percent of claims in which there was no arbitration agreement or the agreement was determined to be unenforceable.