Nursing homes and arbitration clauses

Many businesses in New Mexico use arbitration agreements as part of their contracts. These agreements make people use binding arbitration to resolve any disagreements, instead of going to court. In binding arbitration, a third party comes up with a solution for the two parties. This is different from mediation, where the parties resolve the issue themselves. It’s also distinct from a trial, where a jury makes a decision about how the issue should be resolved.

What is wrongful death?
New Mexico’s law code makes it possible for representatives of a deceased person to seek damages after a wrongful death. These kinds of legal actions are brought in civil court. They are often used when someone has contributed to or caused another person’s death, but criminal proceedings have not been successful. They can be used successfully in cases of nursing home abuse.

In New Mexico, damages from wrongful death lawsuits can be distributed to the spouses and children of the decedent. These damages can’t bring a loved one back, but they can do things like replace lost wages, help defray funeral expenses, and in some cases provide for loss of consortium. Many nursing homes in New Mexico wanted people to sign away their right to this kind of proceeding in favor of binding arbitration.

The Supreme Court makes a ruling
In 2020, the New Mexico Supreme Court unanimously decided that nursing homes cannot require people to sign binding arbitration clauses. In the decision, the court pointed out that the contracts are too one-sided. In order to be valid, a contract must show consideration for both parties. Nursing home residents and their families get nothing from a binding arbitration clause.

It’s important for residents of New Mexico to know that they can push back against this kind of unfair contract. It’s clear why nursing homes would like to do this. But it doesn’t make sense to the public at large. Anyone who encounters these kinds of unjust agreements is right to consider challenging them.