Arbitration has become an increasingly popular way of resolving disputes. Primary reasons for choosing it are that it is supposedly cheaper and faster. However, arbitration has also been used to give a powerful party even more leverage. Employers, auto dealerships, and other entities have slipped arbitration clauses into standard contracts signed by employees and consumers. These clauses prohibit the parties from taking their grievances to court. This is a problem when the weaker party tries to get redress for the other party’s negligence or abuse of power. Arbitration claims are heard by an arbitrator who may not be familiar with the law; if the arbitrator makes an error, the losing party cannot appeal; and in arbitration, the awards are often smaller. Those who sought to challenge arbitration clauses (most recently in AT&T Mobility v. Conception) have been unsuccessful because of the Federal Arbitration Act of 1925. The U.S. Supreme Court has held that the FAA supercedes state laws addressing unconscionability in contracts.
But apparently the Federal Arbitration Act does not win in every case. Recently, the West Virginia Supreme Court of Appeals found that an arbitration clause in a nursing home contract was “unconscionable and unenforceable.” The court determined that the Federal Arbitration Act did not apply to pre-injury situations, where the personal injury occurred after the contract had been signed. The decision was the end result of three court cases in which the parties claimed that nursing home negligence caused the wrongful death of a loved one. The plaintiffs had signed contracts with arbitration clauses before putting their relatives in the nursing home. These clauses stated that any legal disputes over the health care provided would be referred to arbitration.
The plaintiffs had argued that the West Virginia Nursing Home Act nullified the arbitration clause because it stated that “any written waiver by a nursing home resident of his or her right to commence a lawsuit for injuries sustained in a nursing home shall be null and void as contrary to public policy.” The defendants argued that the Nursing Home Act was superceded by the Federal Arbitration Act. In finding that the FAA did not supercede the Nursing Home Act, the court also cited the difference in fee between civil litigation and arbitration. Whereas the fee to file a suit in West Virginia civil court is $145, and $260 for filing a medical professional liability suit, the fee for an arbitration claim is $975 for claims below $10,000 and $8,700 for claims worth between $500,000 and $1 million.
We at the Wolfe Law Firm welcome the outcome of this ruling. It will likely be appealed, but at least for today, there are still situations where a person who has suffered from someone else’s negligence won’t have to be constrained by an arbitration clause. Cases of wrongful death must be treated with the utmost care. Plaintiffs who lose a loved one due to someone else’s behavior want the ones responsible to be held accountable. That means records need to be examined; witnesses need to be gathered; experts need to be found. Arbitration usually places limits on discovery, constraining the ability to gather sensitive facts that could help a plaintiff’s case. Only a West Virginia wrongful death attorney working within traditional channels of court can really get the most thorough sense of what happened.