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Selected Recent Developments in the Enforceabilty of Arbitration Clauses in the Healthcare Context
02/13/2007
Mike Warnecke
Stephen D. Brody

INTRODUCTION

Recent judicial decisions have upheld challenges to the enforceability of arbitration provisions in contracts with healthcare providers. While some courts have enforced the parties’ agreement to arbitrate, other courts have found arbitration provisions to be inapplicable, unenforceable, or subject to limitations. The results are far from uniform and create uncertainty as to the enforceability of arbitration clauses in the healthcare context.

This outline presents a selected sample of recent cases evaluating the enforceability of arbitration clauses in contracts with healthcare providers. This outline is not intended to be an exhaustive list across all jurisdictions. Generally, it does not include cases from outside the healthcare context which could also indicate how courts would treat healthcare arbitration clauses.

This outline presents cases organized into five categories: (I) Antitrust and Other Statutory Claims; (II) Common Law Claims; (III) Class Actions and Consolidated Arbitration; (IV) Contract Formation Issues; and (V) Judicial Review Issues.

The purpose of this outline is to demonstrate the variety of arbitration enforcement issues that arise in the healthcare context. As such it may serve as a starting point to identify and then to minimize the risks inherent in drafting arbitration clauses for healthcare providers. Given the variations between federal law and a particular state’s law and the variations in law from state to state, there is probably no perfect arbitration clause that would work in all circumstances in all jurisdictions. Practitioners and clients should appreciate that, often, arbitration clauses invite legal disputes through the courts, rather than prevent them. For that reason, such clauses should not be included in contracts automatically but rather only after specific consideration of the risks and rewards of arbitration as compared to the techniques to control traditional litigation, such as forum selection clauses, choice of law clauses, and jury-waiver clauses.

Presented through a Practicing Law Institute teleconference on February 13, 2007. To read the complete article, click on the PDF below.