Forced Arbitration: As Fair As A Sucker Punch
We at Consumerist really hate mandatory binding arbitration, the faux-legal sucker punch that companies deliver when they screw up and you try to sue, and so should you. We've talked about its evils a lot, but no one can describe this legal abomination as well as the victims themselves, so this week we'll let them speak.
On Wednesday, consumer groups and arbitration victims will head to Congress to demand passage of the Arbitration Fairness Act, which would ban mandatory binding arbitration clauses in consumer, employment, and franchise contracts. We'll be sharing the stories of some arbitration victims here throughout the week. Today's story is by Marlene Owens, whose late father was killed by a nursing home's negligence, but was prevented from suing because the nursing home had gotten her elderly and incapacitated father to sign a new contract that included an arbitration clause.
My dad, John Donahue, spent his last thirteen years living in a nursing home. By the age of 93, his caretakers needed a mechanical lift to transfer him in and out of his bed, his bath, his chair. One evening in 2005, an aide tried to put Dad to bed using the lift by herself when the machine required two people to operate it. Not only did the lift severely rupture my father's eye and crush his eye socket, but the aide put him to bed for the night leaving his injuries untreated. The emergency surgery to remove his eye two days later was followed by a horrible infection that killed Dad after six weeks of unnecessary pain and suffering.
The next blow came when I tried to file a lawsuit against the nursing home and learned that, even though my dad's death was caused by its staff, I had no right to sue the home because of three words that I had never seen together before: binding mandatory arbitration. Here's what happened: I originally signed a contract to admit Dad to the Embassy Care Nursing Home which, four years later, was purchased by Kindred Healthcare Inc. The new owner decided to limit its financial liability for patient care by adding a new and unfair agreement to the facility's admission contracts, including those of patients already in residence.
Kindred staff took the outrageous liberty of rounding up a group of residents, including Dad who by then was 91 and had suffered a stroke, and read the arbitration agreement to them. There was literally no way he could have understood what that paperwork was about. The staffer then extracted "voluntary signatures" from these fragile, medicated and confused residents so the nursing home could cheat them and their families out of having their day in court if serious problems with care came up.
While I never knew Dad was put in this abusive situation, I know this for certain: He never trusted the woman who presented him with this paperwork, and he would never have voluntarily cooperated with her. She had the nerve to claim he "eagerly" signed the form that I knew nothing about until after his death, something I will always have serious doubts about.
Nursing homes by definition are supposed to care for the frail and elderly. If they are doing their job right, why shouldn't they accept responsibility for those patients? By trying to eliminate people's right to sue, doesn't that just make it easier for facilities to be careless and abusive, like they were in Dad's case?
Kindred Healthcare has been trying to force me into arbitration over my father's wrongful death for four years now, but my anger has given me the strength to fight back. Just this month, thanks to their own questionable tactics, a real judge has decided that my case against Kindred deserves a jury trial in a real court of law, not some arbitrator bought and paid for by the nursing home. I've asked for a speedy trial because I'm 74 and I want to be around to see Kindred lose this case. For me, it's not about the money. I want to see our story in the newspapers. I want people to know the ugly truth of what this business did to my father and how they've tried to get away with it all this time.
Here's how to contact your Representative and Senators to ask them to support the Arbitration Fairness Act.
Previously: The Arbitration Fairness Act Is In The House
Mandatory Binding Arbitration: The Worst Choose Your Own Adventure Ever
What Is Mandatory Binding Arbitration?
(Photo: gregthemayor)
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Comments:
That and the publicity would do far more damage than ANY settlement or punitive action by the courts short of forcibly disbanding the company.
MBA as practiced in this country is a mockery of justice and equitable dealing. It should be expunged from contracts forthwith unless it is specifically agreed to by both sides of a contract. Obama administration, are you listening ?
Marlene's story is heartbreaking and angering. I don't see how anyone can support forced arbitration when it protects shady companies like this one. I hope that she wins her case.
I am not one to recommend litigation, but in this instance, the nursing home should learn that they need to hire qualified aides (e.g. ones that don't crush an elderly man's eye socket and put him back to bed like nothing happened). They obviously can't do that on their own.
@Papa Midnight: "Guy who knows his constitutional right to a speedy and fair trial by jury and who has the willingless to see it through."
Marlene is a woman's name.
I wish this piece of legislation well. As a former consumer credit collections attorney (an experience that really tore me from my previous "free-market-at-all-costs" mentality), I can honestly say that those arb shops are nothing but jokes. How any of those "neutral" arbitrators can sleep well at night is beyond me.
When the majority of people learn exactly what "binding arbitration" means, they will demand change.
Perhaps someone should start a campaign to notify all of the families of people who are in the care of Kindred Healthcare and encourage families, as a group, to remove their loved ones from the Kindred facilities. That will probably have the effect of encouraging Kindred to change their ways.
I do not understand how a person could crush a man's eye socket and leave it, let alone an eldery man (or women). Honestly, how could someone feel ok about doing that? It really makes me wonder what kind of society we live in that someone could think that that was ok to do.
I would of rather this suite came from something materialistic instead of someone's father. I am very sorry for that and I hope this goes into affect ASAP.
My guess is that the arbitration lobby didn't invest enough in politicians or that the government saw a way to earn some money through court fees.
@calchip: "When the majority of people learn exactly what "binding arbitration" means, they will demand change"
A very, very small minority ends up in arbitration. That, clearly, is not the way to go.
This thing needs to be nipped at the bud before it hurts any more people.
Marlene didn't sign any contract. How about suing for her own pain and mental anguish at the wrongful death of her father?
Everyone - making comments in a blog is great, but instead of wondering if Obama is listening, take the time to write your Representatives and Senators to make sure they know how you feel.
@Ichiro51: On a pile of money with many beautiful women. Krazy-Glue their eyelids open and castrate them I say.
It seems to me that the problem here isn't that Mandatory Binding Arbitration, on its face, is bad. It's simply that the way it is instituted is bad. Wouldn't an easier solution be to simply fix the problem with the process (figure out a way to ensure it is decided by a neutral decision maker), rather than simply eliminating it as a remedy?
Some of the anti-arbitration arguments are simply that the consumer loses too often. Isn't it possible that the consumer simply has a crappy case? MBA has a legitimate objective and purpose: to keep litigation costs down. While I don't dispute that they way it is currently administered leaves a lot to be desired, I'm not sure I can support Congress simply taking it off the table as a remedy. It seems like there are other less intrusive ways to go about solving this problem.
@CubeRat: That's the part that gets me. Even beyond the forced arbitration issue, the aide who injured her father and then ignored the injury should be facing criminal charges, no matter what was in the contract.
That story has absolutely nothing to do with binding arbitration and everything to do with capacity. I'm not a lawyer, but it seems pretty clear to me that an addled, 91-year-old man in a nursing home cannot form or amend contracts. Isn't that the core issue? The outcome of an arbitration hearing isn't in dispute; it's whether or not this woman's father submitted to a binding arbitration clause with the necessary faculties to make that decision.
Trotting out this story misrepresents the issue. To properly frame it you have to make a more nebulous argument that casts doubt on the ability of arbitrators to be impartial. That's not as easy, so Consumerist doesn't bother?
@Papa Midnight:
The Constitution only guarantees the right to a speedy trial in a Criminal case. Various state laws or constitutions may have such provisions for civil cases, but the US Constitution doesn't guarantee you that right in a civil case.
No.
Companies have been shown they can't be trusted so-- for now, we eliminate it. Companies claimed "wreckless" lawsuits were driving up costs- so arbitration was invented- and then they abused it. So, tough. They should have respected the process and allowed it to work. No reform. They blew it and should suffer a few years of lawsuit hell.
If the woman had admitted her father after the new owners had taken over, she would have had to sign the same agreement.
We all know binding arbitration is everywhere, so the fact that this horror story has other mitigating factors doesn't dim the evil of mandatory binding arbitration.
@CubeRat:
The next time you want to see a really scary movie that will keep you up at night, skip it and go to a nursing home.
This is about arbitration, because the fact it exists has allowed the nursing home to 1) attempt the fraud in the first place and 2) draw out a lawsuit over the issue at large cost-- in other words, ANYTHING they do wrong, including get him to sign the piece of paper in the first place, they'll try to send through arbitration- significantly upping the cost and make it unlikely they will be sued.
So it is the problem- it shouldn't excist as an option.
"...I know this for certain: He never trusted the woman who presented him with this paperwork, and he would never have voluntarily cooperated with her. She had the nerve to claim he "eagerly" signed the form that I knew nothing about until after his death, something I will always have serious doubts about."
People who do things like this have nice warm spots reserved, right by the fires in Hell, IMHO.
@JGKojak:
For one, a few years of "Lawsuit hell" does nothing but drive up costs for everyone. That aside, I don't think that companies have "Abused" arbitration per se. They put it in their contracts to protect themselves, which isn't necessarily abuse in and of itself. The problem comes in the fact that the way the arbitration system is presently structured. If we can just figure out how to remove the structural bias in the system, arbitration could still provide a useful source for resolving disputes w/o the high cost of protracted litigation.
@JGKojak:
MBA was partially introduced to increase the speed with which common lawsuits could be resolved. It was also a corporate concession, largely to the health industry lobbies, to reduce the time and cost of dealing with lawsuits from the aggrieved. Given the frivolity of many complaints, MBA was seen as a fair compromise with the assumption that arbitrators act in an impartial manner.
To make a case for the end of MBA, you have to prove that cases are often being unresolved unfairly. Confusing the issue is posts like this one, where the case didn't even GET to arbitration due to an expectation - a questionably reasonable expectation, I might add - that the outcome will somehow be unfair to the claimant.
@ADismalScience:
I agree. Everyone assumes that Arbitration is unfair because they, or someone they know, or someone they read about, lost a case they knew was a "lock". I'm not saying that there isn't evidence that Arbitration may not be entirely fair due to some structural conflicts, but the argument that it's unfair because consumers lose a lot of the cases is pretty weak. Without a true, unbiased evaluation of each of those cases on their merits, it's just not accurate to say that it's unfair and abusive just because consumers frequently lose.
@Esquire99: All I'll say about that is that if the arb mill that we used didn't produce a certain winning percentage for us, we would have certainly been shopping for a new shop with which to do business.
@LadySiren: You win this time, but only because it wasn't loaded...
Next time? Might not be so lucky.
I hope she nails their balls to the wall.
@Ichiro51:
Small-sample. As with anything else in society, a few unethical assholes like you and the people you used to work for are to be expected. The question you have to answer when drafting policy is whether or not you're creating an effective mechanism that takes reasonable steps to limit abuse. I can agree that there are reasons to believe that the current system is flawed, but that doesn't change the fact that anecdotes are and always will be shitty arguments.
I just called my congressman's office, and am moving on to my senator.
This has been a LONG time coming
@Ichiro51:
That's the structural bias I'm talking about. It's not that Arbitration is bad, it's that it's poorly implemented and the arbitration firms are basically conflicted because they want to keep the company's business. If that bias could be eliminated through some sort of centralized Arbitration process where the company can't pick and choose the arbitrator, then Arbitration could serve its purpose.
@Esquire99: I agree, maybe something along the lines of "You get to cut the cake, I get to decide which piece to take".
Companies that require MBA must pay a fair amount to the arbitrator of the *clients* choice.
If it's non-binding either the company or client can pay for the arbitrator of their choice... if they can't decide then it would go to the courts.
@Esquire99: I would agree with you if this was Voluntary Binding Arbitration. The fact that it's Mandatory Binding Arbitration and that the arbitors have a lucritive business relationship with one side provides for a system that is an inherent conflict of interest. If one takes a step back and looks at the way the system is set up, it should be apparent that abuse of the consumer is a likely end result of the process.
this is just greed if he's really mad just sue the care giver for liability instead of the facility you won't get a big settlement but you'll get a bad worker out of industry.
also if you felt your father wasn't able to sign contracts you should have taken over power of attorney
@ADismalScience: Was Enron a mere anecdote? The firm I was at is one of the largest collections firms in the country, and I can assure you that at least two similar-sized firms operate the same way.
And thanks for calling me an unethical asshole. I left the firm once I figured out how the game was played and couldn't tolerate it.
@SonicPhoenix:
See my other comments re: structural bias/conflict and a need to change the way it works, but not Congressionally eliminate it.
I, for one, have a relative who lived thru a "Binding Arbitration" nightmare and welcome any fair laws on behalf of the consumer.
As for this story? If this woman was the one who first signed the paperwork to place her father in the nursing home, then they should of contacted HER when the terms changed. This is outrageous, and I hope her day in court is everything she is looking for.
An amazing post by an amazing woman. I hope she wins.
@squinko: If it were a Law and Order Episode, we wouldn't need to worry about Arbitration. Ol' Jack McCoy would have brought everyone involved up on charges for Criminally Negligent Homicide.
@diasdiem: Interesting point. Her dad (who is now dead) signed the contract in favor of MBA, not her. Can she be legally held to it, if she had no clue as to its existence, and could she simply do an end run around it by suing on her own behalf instead of her father's?
Any lawyers wanna chime in?
It is extremely important to work out issues of capacity if there are any before leaving your elderly relative to the care of strangers. That being said, it appears the problem here was that the attempt to create the arbitration agreement was immoral, unethical and most likely, fraudulent. I have a hard time believing that anyone explained the arbitration agreement to the residents of the home in the manner described. It sounds like the way a cruiseline operates, not a nursing facility. And, as Judge Judy says, "If it doesn't make sense, it just isn't true."
Had the OP actually proceeded by arbitration, it is arguably possible that the result would have been fair.
I'm happy that this OP is getting his day in Court. I hope there is a happy ending to this incredibly tragic story.
I'm surprised Marlene has not also filed with her State's AG. This sounds like a criminal suit, not just a civil one. Her father's eye was "ruptured" and then not treated for 12 (maybe +) hours--leading to his death from infection!? Sounds like criminal negligence to me.
[www.govtrack.us] indicates the bill has been referred to the House Judiciary Committee. Unfortunately, unless your representative sits on the Judiciary Committee, and more specifically the subcommittee on Commercial and Administrative Law (and possibly even if they are), it's unlikely this bill is even on your rep's radar.
Obama administration, are you listening ?
Rick Santelli? Please no more tea parties.
@RStui:
What exactly are the elements of Criminal Negligence? I assume you know if you're going to make those kinds of allegations.
Guy who knows his constitutional right to a speedy and fair trial by jury and who has the willingless to see it through. My kind of person.