I got a momentary scare the other day, when I read of a Supreme Judicial Court decision upholding a binding arbitration contract between a nursing home and the son of an elderly parent admitted to the home. Binding arbitration agreements require that if there is a dispute between the parties, resort to the courts and juries is waived in favor of submission to a professional arbitrator. The case is Miller v. Cotter, 448 Mass. 671 (2007), decided just last week. The SJC ruled that even though there were non-nursing home employee defendants not subject to the arbitration agreement, the case against the home and its employees had to go to arbitration. In so ruling, the SJC reversed the decision of the Superior Court judge, who ruled that it would be inefficient and inequitable to force the plaintiff to pursue the case in two separate forums.
On reading just the summary of Miller v. Cotter, I wondered whether there would be a rush by hospitals and doctors to require binding arbitration agreements, as a pre-requisite to admission or service, thus destroying the jury system in cases of medical malpractice. Review of the entire decision, though, showed it to be relatively, narrowly tailored to the facts of the case. The arbitration agreement in question, was not a prerequisite to admission. And of great significance to negating a claim of unconscionability, the contract gave the patient’s son, the unilateral right to revoke the arbitration agreement within 30 days of its signing.
Arbitration can be had much more quickly and cheaply than a jury trial. There is a perception in the plaintiffs’ bar, however, that arbitrators are more defense-oriented than jurors, and that arbitration awards are stingier than jury verdicts. Plaintiffs and defendants alike would benefit from sound statistical analysis to test that perception. Despite dicta by the SJC, noting that arbitration is a preferred means of dispute-resolution, the jury system remains intact for now. The real test will come with a case challenging the validity of an arbitration agreement, made a precondition to admission into a healthcare facility, or treatment by a medical professional.