The New York Times reported this week that the arbitration clauses in nursing home contracts will no longer be permitted (“U.S. to Bar Arbitration Clauses in Nursing Home Contracts”, Sept, 28, 2016). Currently, disputes over proper care or other claims are often required to be resolved outside of court in an arbitration proceeding. Although this new rule could be challenged, it would prevent any nursing home that receives federal funding from contractually requiring its residents to resolve any disputes in arbitration rather than court.
The nursing home industry argues that arbitration provisions provide a less costly alternative to court and that allowing lawsuits will drive up costs and could force some nursing homes to close. Others argue that the new rule will restore a fundamental right of all Americans – the right to their day in court – and could help better expose abuse or neglect of the elderly.
If the new rule is not overturned, it will surely impact how legal disputes are resolved. Hopefully, the elderly will ultimately benefit from this change.