Compulsory Arbitration - A New Twist on a Bad Idea

Today the Salt Lake Tribune reported that State Rep. Stephen Urquhart (R. St. George) will be presenting a new proposal that would attempt to close the doors of the courts to victims of medical malpractice.

Mandatory medical arbitration involves taking a patient's claims out of the courthouse, where a neutral judge and jury adjudicate the merits of the case, and places the issues before paid arbitrators, whose decision is binding. Under Rep. Urquhart's proposal, parties could appeal an arbitrator's decision, but would be forced to pay the opposing parties' costs and fees if unsuccessful.

When mutually agreed to by both parties to a dispute, arbitration can be a valuable form of alternative dispute resolution. Compulsory arbitration, however, forces patients to waive numerous constitutional rights, such as the right to a jury. Additionally, the practice forces patients--many of whom are already struggling under the wight of lost income, disability, and unpaid medical bills--to pay the costs of the private arbitrators out of their own pockets. While this isn't a problem for huge health care companies, this additional cost can be financially devastating to someone struggling to make ends meet.

Rep. Urquhart is an insurance defense lawyer with Snow Christensen & Martineau, a law firm that defends negligent hospitals and doctors. He knows that big businesses, including the health care industry and its insurance companies, favor arbitration as a remedy for "frivolous" lawsuits and the health care "crisis." The truth, however, is that corporations and insurance companies favor arbitration for one simple reason: it gives them an advantage.

As Harvard Law Professor Elizabeth Warren recently remarked, "Arbitration may seem like the Andy of Mayberry form of dispute resolution--folksy, cheap, and fair. The data suggest, however, that it is Darth Vader's Death Star--the Empire always wins."

Health care corporations can easily outspend injured victims in an arbitration setting. Additionally, health care arbitrators know that if they rule against the health care companies, they will be "blacklisted" from ever arbitrating another case. This gives them an incentive to rule in the companies' favor, something known as the "repeat player bias."

This new legislation is just the latest in a series of attempts by the insurance and health care industries to make it more difficult for people to recover for their injuries. Thankfully, Utah's constitutional framers deemed it appropriate to protect citizens' access to judicial relief. Article I, Section 11 declares:

All courts shall be open, and every person, for an injury done to him in his person, property or reputation, shall have remedy by due course of law, which shall be administered without denial or unnecessary delay; and no person shall be barred from prosecuting or defending before any tribunal in this State, by himself or counsel, any civil cause to which he is a party.

Thankfully, this provision should protect Utah's citizens from compulsory arbitration of their medical negligence claims.

And hopefully, Utah's legislators will not try to push through a law that violates the state's guiding charter.