This article is for information purposes only and is in no way meant to offer legal advice. For advice on your particular case, we strongly suggest that you contact your attorney.

There is a horrific story in the December 2022/January 2023 edition of The AARP Magazine.

The article, “Unnatural Causes, The Texas Elder Murders,” by Lise Olsen, recounts how a psychopath was able to enter upscale assisted living facilities in North Texas, murder some two dozen elderly women and steal their jewelry and other valuables.

The main point of the story is that due to ageism, local authorities and officials at the care facilities showed profound indifference to the murders. To make matters even more infuriating was the way the families of some of the victims were treated by the care facilities.

Having worked for an elder law firm far away from Texas and dealt with thousands of clients, of particular concern is that some of the families were forced by the facility, Tradition-Prestonwood, into binding arbitration. The families were pursuing claims of as much as $10 million each.

“In the filing to secure arbitration, Tradition argues that under the terms of their leases, the elderly residents were responsible for their own safety, and Tradition had relied on police and medical examiners to properly investigate the deaths.” It needs to be noted that Tradition and other care facilities had been purchased by private equity investors who, one attorney for the families claimed, put profits over the lives of the residents.

This brings up the issue of binding arbitration in assisted living contracts. In their contracts, most long-term care and nursing home facilities have clauses mandating binding arbitration.

What is binding arbitration?

First, it’s critical to this topic to understand that the right to a jury trial in court in civil lawsuits is guaranteed in the 7th Amendment to the U.S. Constitution. It’s a settled right.

Often companies want to avoid having to face a judge or jury in court, so they require in their contracts that the customer or client agree instead to be subject to a procedure called mandatory binding arbitration. Arbitration is a way of resolving disputes out of court. The dispute is presided over by independent arbitrators who decide the outcome. The judgment of the arbitrator can be final, which means there no ability to appeal.

Why do companies want to eliminate the possibility of a jury trial?

Trials are part of the US Court system.

Jurys are unpredictable. They can award huge settlements or nothing at all.
Jury trials are time consuming and emotionally difficult.

Jury trials are expensive.

Jury trials and the findings are part of the public record.

On the other hand, arbitration is not part of the court system. Arbitrators are independent contractors usually hired by the care facility.

Awards granted to plaintiffs in arbitration are usually less than those mandated by juries.

Arbitration is usually faster and less expensive.

Rulings in arbitration are typically not subject to appeal. They are final and binding.
Arbitration proceedings are private and confidential and may not be made public.

Many, if not most, of the contracts for LTC (long term care) facilities contain language asking the resident and/or his or her family to give up their right to a jury trial and agree instead to accept binding arbitration.

Many times, these contracts are signed when families are under duress, and are unaware of what they are signing. (We’ve talked to several colleagues in the senior care industry and even they are not aware of these clauses.)

Federal law requires that if a person refuses to sign the arbitration clause in a contract, they may not be denied access to the facility, if otherwise qualified. What happens if you cross out that clause? The laws in this instance can be complicated, but in general you must still be allowed to live there.

Keep in mind that if you do refuse to sign or cross out that clause, you do not give up your ability to engage in arbitration. You still keep your right to a jury trial, and you can elect arbitration if you think that is the best option for your matter. The expense, time involved, drain on emotions, and unpredictability of juries works both ways. They can apply to you as well. You may want to keep your options open.
(In our Powers of Attorney, we usually include language prohibiting the Attorney-in-Fact from signing a pre-dispute mandatory binding arbitration clause, which is one that is in force before there’s an actual case.)

It’s critical to go over a long-term care contract in detail. This is part of a huge life change. If you have any questions about a LTC facility contract, it always best to contact your attorney.

— By Ralph Sanders and Peggy Sanders, Elder Law Attorney