Q: Should nursing homes and other long-term care facilities always seek arbitration of claims against them as opposed to a traditional lawsuit?
A: Until recently, most facilities and their legal advisors would have likely answered “yes” to the question above with little hesitation. It has long been the belief of health care facilities, their attorneys, and their insurance companies that the arbitration forum is more favorable to a health care defendant than a courtroom or a jury.
In an arbitration, the plaintiff (or the estate if the resident at issue is deceased) and the defendant facility present evidence and witnesses to a single arbitrator (usually an attorney), rather than to a judge or jury as would be the case in a trial.
There are benefits to both plaintiffs and defendants in arbitration, namely that because it is a more streamlined process, it may cost less, and the parties may receive a decision far sooner than if they were to go through the full litigation process.
Conversely, if an aggrieved resident (or his or her representative) chooses to pursue a lawsuit, the case can often take multiple years before the case actually goes to trial. Most trials involving claims against health care facilities involve juries, where six disparate members of the community will decide whether the plaintiff’s claims have merit, and if so, how much to award the plaintiff.
It has long been the conventional wisdom that health care facilities should avail themselves of arbitration, as opposed to litigation, whenever possible. The rationale has been that arbitrators are less likely than juries to allow the emotions of a particular case to influence his or her award. Similarly, it has long been assumed that, even if an arbitrator finds in favor of the plaintiff, they will generally award less in damages than what would be awarded by a jury. To that end, health care facilities have long sought to include mandatory arbitration agreements in their admission agreements to compel disputes to be decided by arbitration rather than at trial.
However, a recent decision from an arbitrator in Oswego County in a claim by a former resident against a nursing home illustrates to facilities, as well as their attorneys and insurers, that arbitration may not provide the “safety” that has been long assumed.
In the Oswego County case, the plaintiff and his attorney initially filed a lawsuit. Sometime thereafter, the parties agreed to binding arbitration rather than a trial to resolve the case. The claim involved allegations that the nursing home allowed a pressure ulcer to develop on the resident’s left heel, ultimately resulting in a below-the-knee amputation following the resident’s discharge from the nursing home.
The parties submitted a variety of evidence to the arbitrator, including the facility’s records, witness testimony, and expert testimony. After considering all of the evidence, the arbitrator found that the nursing home was negligent in the care provided to the resident, and that it violated various provisions of the New York State Public Health Law. The arbitrator then awarded nearly $2 million dollars in damages for pain and suffering and medical expenses.
In all likelihood, one of the reasons that the facility and its attorneys agreed to arbitrate the claims was the belief that even if the arbitrator found that the facility was negligent and/or violated the New York State Public Health Law, any award to the plaintiff would be modest as compared to what a jury was likely to award if it found the facility negligent. This arbitrator’s decision obviously rendered that rationale incorrect.
Moreover, the decision may be representative of a change that is taking place. While most arbitration proceedings are confidential, anecdotally the legal community is learning that arbitrators are increasingly willing to make awards to aggrieved residents or their families that are on par with (and sometimes exceed) awards made by juries in similar cases.
Arbitration still may provide significant benefits to facilities in some cases, and arbitration should still be explored as an option depending on the facts of a particular case. However, there should be a recognition that going to arbitration does not automatically mean that health care facility defendants are protected or immune from adverse findings or large verdicts.
Reprinted with permission from the August/September 2023 issue of The Bulletin from the Monroe County Medical Society and available as a PDF file here.
Colin D. Ramsey is a Partner in Underberg & Kessler LLP’s Health Care, Labor & Employment, and Litigation Practice Groups. He can be reached at cramsey@underbergkessler.com or 716.847.9103.