Arbitration has become the procedural remedy of choice for the business community in almost every type of civil dispute, from employment matters to nursing home negligence. Arbitration involves the resolution of civil disputes by a panel of costly private arbitrators rather than by government-paid judges and citizen jurors. If for no other reason than that arbitration abrogates the jury system, it is generally looked upon with disfavor by lawyers who represent plaintiffs in civil disputes.
Whether a dispute is arbitrated is a matter of agreement between the parties. Typically, the agreement is made at the outset of the relationship. For example, in the context of nursing homes, the arbitration agreement will be part of the package of admission documents. It is not unusual for the individual to such an agreement to be unaware of the provision or feel like he or she has no choice in the matter, a take-it-or-leave-it proposition.
Courts generally favor arbitration agreements, Raymond James Fin. Servs., Inc. v. Saldukas, 896 So. 2d 707, 711 (Fla. 2005), but such agreements are subject to state law contract defenses such as unconscionability, Orkin Exterminating Co. v. Petsch, 872 So. 2d 259, 264 (Fla. 2d DCA 2004). To succeed in an unconscionability argument, both procedural and substantive unconscionability must be shown. Bland, ex rel. Coker v. Health Care & Ret. Corp. of Am., 927 So. 2d 252, 256 (Fla. 2d DCA 2006).
Through the years, the courts have established standards for determining the enforceability of arbitration agreements. Listed here are some of the more important considerations.
- Is the arbitration agreement conspicuous? A provision buried in fine print may not survive challenge. Better practice is for the agreement to be a stand-alone document with its heading in bold-face capital type.
- Even if the agreement is conspicuous, its language must be clear and straightforward. Vague and confusing language is frowned upon by the courts.
- Key concepts, such as that the right to a jury trial is being waived and the arbitration decision is binding, must be included in the agreement.
- The proponent of an arbitration agreement should have a procedure in place for explaining the meaning and effect of the agreement, even affirmatively addressing these issues prior to execution of the agreement. This is especially true in the nursing home setting, although, standing alone, the proponent’s failure to have this procedure in place is unlikely to nullify the agreement, more so where the individual is given adequate time to review the provision and even seek legal counsel before execution.
- Take-it-or-leave-it scenarios can survive voiding an agreement, if reasonable alternatives are available to individual. This is a flexible standard, applicable in different ways given the particular relationship. A nursing home, for example, is well-advised to provide a list of alternate facilities located within the general geographic area.
- Agreements that call for the arbitration hearing to take place in an inconvenient location, with little relationship to the matter at hand, are looked upon with disfavor as deprivation of a legal right.
- Likewise, agreements that require the arbitrators to be selected from a small pool of arbitrators may not survive scrutiny. Arbitration has become a serious money making proposition for arbitrators, leading some to continually rule in favor of business with the expectation of receiving repeat assignments.
- Agreements that set different proof standards and limit remedies that are available under traditional civil law, skate on thin ice. Courts are more accepting of modifying the procedure for presenting claims, than they are of changing substantive proof and damages standards. The latter involve constitutionally protected due process issues.
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Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.