It’s hard enough to make the decision that an elderly loved one must move into a nursing home.

During admission, your client’s family is given stacks of papers — “Just sign here,” they are instructed— and, under stress already, many families sign without closely reading the documents. Increasingly, one of the papers nursing homes include binds the families to arbitration if a dispute arises.

Such agreements are commonplace when signing up for a cell phone or credit cards, and they’re increasingly showing up in nursing homes.

But, as highlighted recently by NPR, agreeing to arbitration means your client is giving up the right to take a grievance to a court of law, cutting off one avenue of seeking redress from the nursing home (

Competing interests

If a loved one is severely injured or dies, an arbitrator, not a judge or jury of your peers, would decide if damages are warranted.

The purpose of mandatory arbitration agreements, the AARP notes, is to prevent legal action against a facility should something bad happen, such as serious injury or, less typically, death of a nursing home resident ( Although arbitration carries benefits — claims typically are resolved more quickly than in court cases — consumer advocates say signing a binding arbitration pact is generally not in families’ best interests.

For the nursing home, arbitration agreements are good business, but not so for nursing home residents and their families.

Kaiser Health News reports that between 2003 and 2011, Aon Global Risk Consulting looked at 1,499 cases involving long-term care providers ( The group found there was no money awarded in 30 percent of claims where a valid arbitration agreement was in place, compared with 19 percent of claims where there was no agreement in place or it was unenforceable.

Aon also found that about 12 percent of claims without arbitration led to awards of $250,000 or more, but only 8.5 percent of claims with an arbitration clause did so.

Just say no

Before sending a loved one to a nursing home, it’s wise to have an attorney review the documents before signing. However, even if such a document has been signed, most have a 30-day “opt-out” provision.

If all else fails, your client can seek to have the arbitration agreement invalidated by the courts. As your client’s advisor, you can be the last line of defense for your client.

We hope this information was useful to you and helps your clients and their families. If you have a specific case or a question, don’t hesitate to call our office.

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