On January 8, 2019, Justice Brett Kavanaugh authored his first opinion as the newest member of the Supreme Court of the United States (“SCOTUS”). An opinion that matters to everyone in this country and one that will have an enormous impact on our consumer culture moving forward. Last year we watched Kavanaugh’s nomination process unfold. At times it was hard to watch. We listened to the arguments and promises that were made to all of us in this country. And since Kavanaugh’s confirmation and swearing in, we’ve sat back waiting and asking ourselves “what will be next?”  

Arbitration Clauses . . . They Aren’t Just Limited to Your Credit Card Contracts
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Mark Twain once uttered this simple phrase: “actions speak louder than words, but not nearly as often.” Sadly, based off the explosive text of this recent decision, it could be a sign of bad things to come.

We often see arbitration clauses contained within transactional contracts like credit card agreements or certain loans. For example, when you need a line of credit to pay your bills and you’re in the process of reviewing a credit card agreement, there isn’t much room for negotiation. We all sign the dotted line because we need that money to pay our bills and we don’t have other options.  

But what happens when these same arbitration clauses and provisions start seeping over into all other areas of our lives?  Including the potential to create a healthcare system where a majority, if not all, of your medical treatment and procedures are bound by mandatory arbitration – even any and all personal injuries that may arise from hospital or physician malpractice.

If you were in the middle of a healthcare crisis or if you or a loved one were in need of emergency medical treatment, do you want to be faced with that same position you’re in with your credit card company when it comes to signing off on medical treatment and care? This may sound like an extreme comparison, but given the recent decision from SCOTUS, what’s to stop specialists and private medicine from making themselves only accessible to those who agree to never sue them in a court of law for any malpractice they may commit?  

The case is Henry Schein v. Archer & White (“Schein”), and the SCOTUS greenhorn authoring the opinion, held that when two parties enter into a contract that delegates the questions of what can and should be arbitrated to an arbitrator: a court may not override the contract, even if the court thinks that the arbitrability claim is wholly groundless.” SCOTUS went on to clarify in its opinion that there is no “wholly groundless” exception to the Federal Arbitration Act’s enforcement of delegation clauses.

So what exactly are “delegation clauses” within an arbitration agreement? And why is the ruling from SCOTUS relevant to something like . . . my healthcare treatment and healthcare providers?

Let’s say you are looking at a contract and there is an arbitration provision or clause contained within stating “any and all disputes arising from this contract” will be go before an arbitrator and not before a judge and jury in a traditional court of law. What exactly does that mean? Better yet, where do you draw the line or determine what types of claims you could file a lawsuit on in a traditional court of law and what types of claims would you be forced to take before an arbitrator?

For example, you purchase a new home improvement product and part of the transaction requires you to sign a contract discussing the return policies and warranties on the product that also contains an arbitration provision with that “any and all” broad language. At the time you sign the contract, you are only thinking about the warranties included with the product and the possibility of having to return or exchange it with the seller if it fails to work as intended. Worst case scenario, you may find yourself in front of an arbitrator if your purchase is a dud and the seller won’t make you whole again, right?

But what if a personal injury arises and you or a loved one are injured somehow while using the product exactly as intended? You may not have been considering any personal injury claims when you entered the contract to purchase that item, but does that personal injury claim also fall under that broad language in the arbitration provision stating: “any and all disputes arising from this contract”?

Prior to Schein, courts had a mixed view on how to handle situations such as those discussed above. Folks would get injured and file personal injury claims in court arguing that those were not supposed to be included under the arbitration provisions in their contract. Many courts in this country would take that opportunity to review the original contract and arbitration provisions, and from there, a judge would decide which claims would be forced into arbitration and which claims could stay before he or she in a traditional court of law. For years, these courts and judges have taken on a gatekeeper role of deciding what claims the parties intended to arbitrate and which claims were not intended to go before an arbitrator. Those claims the judge felt did not fall under the arbitration agreement were “wholly groundless” and could continue to proceed before a judge in a traditional court of law.

With the decision in Schein, SCOTUS makes it clear that moving forward these decisions fall within the hands of an arbitrator and not those of a judge sitting in a traditional court of law. From there, the arbitrator can determine what remains in arbitration and what may or may not move forward separately in a traditional court of law.

Generally, in emergency situations, you cannot be refused medical care by declining to sign off on an arbitration agreement. But you should never hesitate to ask about the paperwork you are signing at your doctor’s office or even when you’re meeting with a lawyer. Although this proves more difficult when dealing with big banks or large financial institutions, you can always ask your local doctor or lawyer if you have to agree to arbitration prior to soliciting their services. You may be surprised to find out that, when simply asked, some will remove the provision altogether and move forward without it. Protect yourself and your future because you never know what could happen or what options you’ll need at your disposal before just signing them all away.

For more information on the legal background discussed in this article, please see the following link: https://www.periscopegroup.com/legal/medical-arbitration-clause-legal

Image Source: The Nation