[guest author: Spencer Payne]
As I explained back in December, arbitration agreements can save your company a significant amount of money. However, not all arbitration agreements are created equal.
Although the law varies from state to state, here are four “best practices” for drafting arbitration agreements:
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Make sure all claims and disputes between the facility and the resident, including claims for personal injury and residents’ right’s violations, are covered by the arbitration agreement. This is particularly important for independent living agreements because judges will often view them as a residential lease and only compel arbitration of “landlord-tenant” type disputes.
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Make sure the arbitration agreement is binding upon the facility and its management company, owners, affiliates, etc., as well as the resident and the resident’s representatives, heirs, survivors, Estate, etc. This will help ensure the agreement is binding on all potential parties and will continue to be binding in the event the resident passes away.
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Do not limit the type or amount of damages available to the resident in arbitration. In Florida, for example, any such provision is void and may even serve to void the entire agreement.
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Do not bury the arbitration agreement within the residency contract or admission paperwork. Ideally, it should be clearly titled in bold letters and include a separate signature line for the resident to acknowledge his or her understanding of the agreement. This will help defend against any claim that the agreement was not adequately explained to the resident prior to signing.
Getting your case into arbitration is all about putting your defense attorney in the best position possible when he or she moves to compel arbitration. By adhering to the “best practices” above, you will be doing just that.
The law governing the enforceability of arbitration agreements is very nuanced and varies from state to state. Always consult with your attorney before making any changes to your existing arbitration agreement.
