The “A” Word

 

Beware the “A” word.

You see it in contracts and trusts everywhere. 

Arbitration.

Judges love arbitration, because it kicks the lawsuit out of their court.  Instead, the  parties are forced to pay for, and present, their case to a person who acts as an arbitrator.  There is no jury trial.  Most of the arbitrator’s decisions are not appealable.  The arbitration can last as long, and cost as much, as a lawsuit.

Big companies love arbitration because the case is tried behind closed doors, and because many small litigants cannot afford to go through a full arbitration.    

To be forced to arbitrate, you have to agree to it in a contract.  The Texas Supreme Court  extended that in a 2012 decision  to trusts – it held that a beneficiary of a trust who has accepted any distribution from the trust is held to the trust’s arbitration clause. 

An arbitration clause is usually found at the end of a contract in the boilerplate language.   Of concern in the Elder Law area, the arbitration clause may be in contracts for nursing homes, assisted living centers, home health, or trusts.    Consider carefully before you obligate yourself to arbitration.  You may not like the consequences.