How to Fight Nursing Home Arbitration Clauses: Legal Strategies That Work in 2025

Going Into Court Despite an Arbitration Clause

Nursing home operators count on families to accept arbitration agreements as non-negotiable. The reality is different. Courts across the country regularly refuse to enforce nursing home arbitration clauses on procedural and substantive grounds, and the legal landscape continues to shift in favor of injured residents.

This article describes the most successful strategies attorneys use to get nursing home cases in front of a jury despite a signed arbitration agreement.

Strategy 1: Attack Capacity at Signing

The single most powerful challenge to nursing home arbitration agreements in dementia and cognitive decline cases is attacking the resident's legal capacity at the moment they signed.

To enter into a binding contract, an individual must understand the nature of the transaction, the parties involved, and the legal consequences of signing. A resident admitted in a confused state following a stroke, with a diagnosis of moderate-to-severe Alzheimer's, or under heavy sedation from a recent hospitalization likely lacked that capacity.

Evidence to gather:

• Admission assessments, including Mini-Mental State Examination (MMSE) or Montreal Cognitive Assessment (MoCA) scores from around the time of signing
• Hospital discharge records reflecting cognitive status
• Treating physician notes documenting confusion or altered mental status
• Testimony from family members present at admission about the resident's clarity

Courts have voided nursing home arbitration agreements on capacity grounds in numerous cases. Your attorney needs a geriatric psychiatrist or neurologist to provide expert testimony correlating the clinical record with incapacity at the time of signing.

Strategy 2: Challenge the Scope of the POA

If a family member signed the arbitration agreement using a power of attorney (POA), the scope of that document controls.

Many durable powers of attorney contain limitations on the agent's authority. Specifically, POA documents drafted by estate planning attorneys often include language that:

• Limits the agent's authority to healthcare decisions (a healthcare proxy may not have authority to sign financial or legal contracts)
• Requires the principal's incapacity before the agent's authority activates — and if the resident was actually competent at signing, the POA may not have been effective
• Expressly prohibits waiving the principal's right to jury trial

If the POA did not authorize the signing of a pre-dispute arbitration agreement — particularly one waiving constitutional rights — the agreement may be void as outside the scope of the agent's authority.

Strategy 3: Procedural Defects Under CMS Regulations

Under 42 C.F.R. § 483.70(n), nursing homes that accept Medicare or Medicaid funding must meet specific procedural requirements for arbitration agreements:

• The agreement must be explained clearly in the resident's language
• The resident must be told it is voluntary and not a condition of admission
• The right to rescind within 30 days must be disclosed
• The agreement must not be buried in admission paperwork without notice

When facility staff fail to follow these requirements — as frequently happens when admissions coordinators treat arbitration agreements as standard forms — the agreement is procedurally defective. Deposition of admissions staff about their practices, combined with testimony from family members about how the paperwork was presented, creates a strong foundation for invalidation.

Strategy 4: Unconscionability Doctrine

Courts will not enforce contracts that are unconscionable — those that are the product of grossly unequal bargaining power combined with one-sided terms.

Procedural unconscionability in nursing home cases flows from:

• The admission context: families are often in crisis, the resident may be in pain or just discharged from a hospital, and time pressure is intense
• The complexity of the document relative to the explanation provided
• The lack of any real opportunity to negotiate or walk away

Substantive unconscionability arises from terms that systematically favor the facility, including:

• Arbitrator selection rules that give the facility more control over the arbitrator pool
• Discovery limitations that favor defendants (who control the records)
• Fee-splitting arrangements that create financial burdens for claimants

In states with robust unconscionability doctrines — California, Kentucky, and West Virginia, among others — these arguments have successfully invalidated nursing home arbitration agreements at the trial and appellate court levels.

Strategy 5: Public Policy Arguments Under State Elder Abuse Statutes

Many states have enacted elder abuse statutes that provide enhanced remedies, including the right to a jury trial, intended to deter exploitation and abuse of vulnerable adults. When a pre-dispute arbitration agreement would frustrate the legislative purpose of those statutes — by routing cases to private arbitration where the enhanced remedies may not be available and proceedings are confidential — courts sometimes hold that enforcement violates public policy.

California courts have been most receptive to this argument, but it has traction in other states as well. Your attorney should research whether your state's elder abuse statute contains an anti-waiver provision or evidence of legislative intent that supports a public policy challenge.

What to Do If the Motion to Compel Arbitration Is Granted

If a court rules that the arbitration agreement is enforceable:

1. **Choose an experienced arbitrator.** If the agreement provides any choice in arbitrator selection, your attorney should select someone with a track record of neutrality in elder abuse cases.
2. **Use the arbitration discovery process aggressively.** Obtain all facility records, staffing logs, incident reports, inspection histories, and corporate documents.
3. **Pursue punitive damages.** Many arbitration agreements purport to limit damages, but some states prohibit waiving punitive damages in elder abuse cases by contract. Challenge those limitations.
4. **Preserve your appellate rights.** If the arbitration award is inadequate, limited grounds for court review remain — including fraud, arbitrator bias, and failure to follow the arbitration agreement itself.

Arbitration is not the end of the road, and the agreement itself may not be enforceable. Consult an elder abuse attorney before accepting that arbitration is your only option.