Florida Supreme Court Voids Medical Malpractice Arbitration Agreement

The Supreme Court in Florida recently settled a division among the District Courts of Appeal on whether or not a medical malpractice arbitration agreement was void when it included terms only favorable to the hospital. In Hernandez v. Crespo (No. SC15-67), the Supreme Court determined that any arbitration agreement that left out required provisions of the Medical Malpractice Act and was only favorable to medical providers was void as against public policy. The Fifth District had previously held that the agreement was void, but the Second District had held that an arbitration agreement in Santiago v. Baker, 135 So. 3d 569 (Fla. 2d DCA 2014), was not void as against public policy because the parties did not invoke the statutory arbitration scheme.

This appeal stemmed from the injury suffered by a 39-weeks pregnant woman who was turned away from her doctor’s appointment because she was a few minutes late. The appointment was re-scheduled four days later. On the day before the rescheduled appointment, the patient delivered her stillborn son. A little over a year later, the patient provided notice to the hospital and the treating physician that she was initiating litigation. Over the next five months, the hospital and doctor denied the claim and moved to compel arbitration, pursuant to the agreement between the patient and the medical center. The agreement was signed by the patient and the Chief Medical Officer on behalf of the medical center, but not by anyone else. Two months later, the patient and her husband requested binding arbitration under section 766.207, Florida Statutes, which was declined by the hospital and physician.

In its analysis, the Supreme Court first looked at the intent of the Medical Malpractice Act (MMA). The Preamble to the Act acknowledges the growing crisis of medical personnel and entities that are unable to afford liability insurance. The legislature acknowledged there needed to be a way for them to procure liability insurance so that injured patients, families, and estates could recover damages for economic and non-economic losses. The Court distinguished this ruling from its holding regarding caps on damages in medical malpractice cases. The Court pointed out that this was not a question of whether the arbitration agreement was unconstitutional, but instead whether the unilateral alteration of an arbitration provision goes against the public policy in the MMA. In prior cases, the Court has held that contractual provisions that injure the public good and violate public policy are unenforceable. The Court also noted that parties are welcome to contract around state law, as long as it isn’t void as against public policy.

The arbitration agreement in this case allowed patients to give up the right to a jury trial but limited the benefits provided in exchange for those rights. The agreement allowed the parties to pick arbitrators but limited the window to do so to 20 days within a demand for arbitration, which favored the defendants. The MMA calls for independent arbitrators.

This agreement in this case and the one from the 2nd District required both parties to share costs equally. The Supreme Court found that while this provision did not specifically go against the language of the MMA, this requirement could lessen the incentives for parties to arbitrate. The Court ruled that parties cannot pick and choose which parts of the MMA to use, since the entire Act was designed to encourage arbitration. The Court upheld the 5th District’s ruling that the agreement was void as against public policy and disapproved of the 2nd District’s ruling in Santiago.

This lawsuit shows that hospitals and physicians will use anything available to limit liability and damages. The Florida personal injury attorneys at Donaldson and Weston have the experience you need to litigate your case and will aggressively push back against defendants to help you recover and maximize your damages. Call today at 772-266-5555 or 561-299-3999 for a free, confidential consultation.

More Blog Posts:

Florida District Appellate Court Reviews Future Medical Expenses in Multi-Car Accident Case, Florida Injury Lawyer Blog, November 28, 2016

Federal Circuit Court of Appeal Declines to Find Equitable Tolling in Slip and Fall Case, Florida Injury Lawyer Blog, October 21, 2016