Arbitration

In the world of commercial business, arbitration is a frequently used procedure for the settlement of disputes. The parties submit to one or more persons selected either by themselves, by a neutral body, or by statute, and the arbitrators investigate the issues in order to make a final and binding decision. Arbitration is used in place of legal proceedings, and it can be a less expensive and more efficient way to solve legal disagreements.

Arbitration is now being used to settle medical malpractice disputes, and some states have enacted laws specifically governing medical malpractice arbitration agreements. Some statutes even provide procedures to ensure that the arbitrators selected are free of bias. In general, agreements that follow and incorporate statutory requirements are given the presumption of validity when challenged.

However, the use of arbitration in medical malpractice disputes is not quite as simple as it is in commercial disagreements. The legal relationship between a health care provider and a patient is a more complicated combination of contract law and public tort law, which is created by the standards of care desired by society. Two basic issues arise in arbitration agreements signed by patients. The first is the patient's understanding of the agreement. Frequently, patients are not familiar with arbitration, unlike participants in a commercial transaction. The second issue is the potentially coercive circumstance under which the patient is signing the agreement, particularly if it is part of an admission form signed at the time of treatment. The patient may see the medical care provider as an authority figure and may not feel that the arbitration clause is subject to negotiation. Despite these issues, courts tend to find agreements that follow a state's medical malpractice arbitration statute enforceable in light of the legislative goal of encouraging arbitration rather than the judicial settlement of medical disagreements.

When a state has no statute governing medical malpractice arbitration agreements, courts look carefully at the terms of the agreement and the circumstances under which it was signed to determine its enforceability. A court will not enforce a contract of adhesion, which is offered as part of a required form on a take-it-or-leave-it basis with no real opportunity to bargain. With no statutory guidance, the courts also look for genuine consent of a patient to arbitrate by investigating whether the patient knowingly and voluntarily gave up his right to trial.

Arbitration provisions in admission forms attacked as contracts of adhesion have been found to be enforceable in states with medical malpractice arbitration legislation when the agreements followed the statutory requirements even though patients could not negotiate the terms of the agreements. Arbitration agreements in compliance with a state's statute have been enforced despite patients' claims that they hadn't read or understood the terms of the agreement. However, even when an arbitration agreement follows statutory requirements, many courts narrowly define the scope of the agreement against the party seeking arbitration.