Legal Rights Restored for Nursing Home Residents and Their Families

As of November 28, 2016, when an individual or a loved one fills out an application for residency in a nursing home, admission will no longer be contingent on signing away one’s legal rights. With a significant new ruling on Wednesday, September 28, regulators for Medicare and Medicaid have barred nursing homes that receive federal funding from requiring residents to agree, in advance, to resolve disputes in arbitration instead of in court, reports The New York Times.

Nursing homes have long been shielded from liability for claims of neglect, harassment, abuse, assault, and wrongful death. This historic move marks the end of a pervasive practice that was not beneficial to the nursing home resident or to their families. In actuality, the ruling brings back the basic right of Americans to have their day in court when the situation calls for it, the Times reports.

The ruling will no doubt create a trend for ending pre-dispute arbitration at other institutions and corporations that receive government support. A rule has been proposed by The Consumer Financial Protection Bureau that would prevent banks, credit-card companies and other financial firms from using arbitration clauses to stop consumers from banding together in class-action lawsuits.

If that rule had been in place when Wells Fargo customers discovered that fake accounts were being opened in their names, they could have sued as a group. However, the pre-dispute arbitration clauses that were signed apparently applied to the fraudulent accounts, which then barred their access to the courts, according to the Times.

The Department of Education has suggested a rule that would limit the use of arbitration clauses in enrollment contracts at schools that take part in federal direct loan programs. It would differ from the nursing home rule where such clauses are not permitted. The Education Department’s proposal would allow clauses as long as schools explained clearly what the options are and not make signing anything a condition for admission, the Times reports.

The former practice of pre-dispute arbitration in the last decades, has become a secretive, privatized tribunal system ruling all manner of contracts. It invariably supports corporations and protects them from accountability, thereby creating a climate where wrongdoing can persist and thrive. The new nursing home rule plus additional efforts by federal agencies to ban forced arbitration, are harbingers that there truly can be a day in court and justice for all, reports the Times.