Over the years the Chicago medical malpractice attorneys at our firm have been confronted with many ways in which insurance companies and other perennial litigation defendants attempt to skirt their responsibilities. It remains frustrating that these groups are not content with simply defending themselves in a court of law, but instead seek to take away rights from consumers so that they do not have to participate in the legal process at all. Tort reform measures are one aspect of this tendency.
In the nursing home context, another way that insurance companies and long-term care conglomerates try to avoid liability is via arbitration clauses. The Illinois nursing home lawyers at our firm often warn local consumers about the risks of these clauses. They are usually signed by unsuspecting family members during the admission process. The clause forces the family to take any dispute through the arbitration process, instead of the regular state or federal court system. The arbitration process means that families may not get the chance to have a jury trial, certain evidence may be excluded, and appeal rights might be curtailed. This is on top of the fact that it is often quite expensive.
Recently, the Florida Supreme Court issued two rulings related to these arbitration clauses which, Attorney Perconti explains, might have ramifications on nursing home neglect cases throughout the country. As recently reported in Lawyers.com, the two cases involve damage limitations which were included as part of the arbitration agreements. In Shotts v. OP Winter Haven, the court ruled that it was impermissible for an agreement to be signed which waived the victim’s right to all punitive damages being awarded by the arbiter. Similarly, in Gessa v. Manor Care of Florida, the court nullified a clause which placed a limit of $250,000 on non-economic damages being awarded. In making its ruling, the court explained how these clauses could only dictate the forum of the dispute, not eliminate substantive rights held by the plaintiff. Punitive damage bans and a cap of $250,000 on non-economic damages would not apply in the regular court system, and so they cannot be curtailed in the arbitration context.
While these cases only have actual binding authority in Florida, the ruling may have implications throughout the country. John Perconti explained that “these options should deter nursing homes in other states from imposing damage caps in their agreements.” Fortunately, he reveled that Illinois facilities have thus far been reluctant to try to limit consumer rights in this way. He noted, “We have not seen any clauses imposing damage caps in any of the nursing home contracts as they would violate Illinois public policy and undermine the remedies set forth in the Illinois Nursing Home Care Act.”
Legislation like the Illinois Nursing Home Care Act, which seeks to limit Illinois nursing home neglect and abuse, cannot be undermined by facilities via use of contract clauses. In other words, courts will consider the spirit of this legislation and its mission being nullified if they approve of these clauses. Similarly, general public policy concerns can be taken into account. There is a public interest in allowing the jury system to adjudicate these disputes and not having community members lose their substantive rights unknowingly.
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