Arbitration Beats Litigation

By Johnson, Lee J. | Medical Economics, May 22, 2009 | Go to article overview

Arbitration Beats Litigation


Johnson, Lee J., Medical Economics


A malpractice lawsuit can take many years to come to fruition-and many hours of you sitting in a deposition or courtroom, not to mention hours of preparation. And when the judgment comes, it can be astronomical.

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.

An arbitration agreement signed before the patient seeks or starts treatment is more likely to be upheld than one signed just before treatment. It can be presented as a condition of treatment- meaning that you do not have to agree to treat the patient without one- and it is perfectly legal for a practice to tell patients that service can be rendered only if they agree to take any complaints to an arbitration panel rather than the court system.

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. …

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