Arbitration beats litigation

May 22, 2009

An arbitration agreement signed before the patient seeks or starts treatment is more likely to be upheld than one signed just before treatment.

Key Points

Arbitration, by comparison, is a less formal type of dispute resolution-often faster, less expensive, and more efficient than litigation. It's often possible in eight months to arbitrate a claim that might take eight years to resolve in court. Legal costs are greatly reduced, and the final award is much more likely to be in the reasonable range.

When claims are arbitrated, the rules of evidence are relaxed. Both parties tell their story. In an arbitration hearing, a single arbitrator, or an impartial panel, decides the case's disposition. Arbitration can be "non-binding," meaning that the parties may still go to court, or it can be "binding," meaning that the decision of the arbitrator is final. Binding arbitration is the type that can save the most time and expense.

Asking a patient to sign an arbitration agreement at the beginning of the doctor-patient relationship has one big drawback: It puts the patient in the frame of mind of litigation. Planting the seed of an adversarial relationship can be detrimental to good communications when trust and rapport are essential.

The agreement will more likely be upheld if the terms are not oppressive-i.e., if they would not exceed the reasonable expectations of an ordinary person. The contract should contain no hidden terms, clearly state that the patient is giving up the right to a jury trial, and encourage the patient to discuss the agreement with the physician.

Many courts have held that arbitration agreements are enforceable and do not violate public policy unless they contain unfair terms, but that is not always the case. In a doctor-patient relationship, the physician is assumed to have greater power and knowledge. An agreement the physician asks a patient to sign shortly before an operation, for example, usually doesn't have legal force because of the parties' unequal positions. The patient can claim that he was apprehensive about the surgery or that the doctor exercised undue leverage. So a patient with a bad result may try to renege on the agreement and file a lawsuit, and judges are loath to deny any person their "day in court," meaning arbitration agreements could be set aside.

Where arbitration can reasonably be implemented as an alternative to litigation, or where a case in litigation with reasonable merit could be resolved, make every effort to see that it happens.

But remember that arbitration agreements cannot limit your duty or liability to the patient, and you will nonetheless be held to the appropriate legal standards of care.

The author is a healthcare attorney in Mt. Kisco, New York, specializing in risk-management issues. She can be reached at lj@bestweb.net
. Malpractice Consult deals with questions on common professional liability issues. Unfortunately, we cannot offer specific legal advice. If you have a general question or a topic you'd like to see covered here, please send it to memalp@advanstar.com
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