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Mandatory Arbitration Clauses in Medical Negligence Cases

by Karen M. Rabenau


A. MUTUAL ASSENT

Mutual assent is the cornerstone of any valid contract. Mutual assent is a "meeting of the minds." The parties must enter into the same bargain at the same time. See, e.g., Goeckel v. Stokely, 236 N.C. 604, 607, 73 S.E.2d 618, 620 (1952) ("[T]o constitute a valid contract the parties must assent to the same thing in the same sense, and their minds must meet as to all terms"); Horton v. Humble Oil & Refining Co., 255 N.C. 675, 678, 122 S.E.2d 716, 719 (1961) (leasing contract invalid because parties did not achieve a meeting of the minds). The very basis of the alleged bargain in mandatory arbitration clauses is the relinquishment of the right to trial by jury. However, in order to bargain away such a fundamental constitutional right, there must be a knowing, voluntary and intelligent waiver. Johnson v. Zerbst, 304 U.S. 458, 464, 58 S.Ct. 1019, 1023, 82 L.Ed. 1461 (1938) ("A waiver is ordinarily an intentional relinquishment or abandonment of a known right or privilege"). See also, Ohio Bell Telephone Co. v. Public Utilities Comm. of Ohio, 301 U.S. 292, 307, 57 S.Ct. 724, 731, 81 L.Ed. 1093 (1937) ("We do not presume acquiescence in the loss of fundamental rights").

Several jurisdictions have also held alleged arbitration agreements invalid and unenforceable in medical malpractice cases due to lack of mutual consent. In Sanchez v. Simons, for example, the arbitration provision at issue stated:

9. I agree that any dispute or claim which I may have relating to the abortion or any related medical procedure or any consequences thereof shall be determined solely by arbitration under the auspices and pursuant to the rules and regulations of the American Arbitration Association.

Sanchez v. Simons, 121 Misc.2d 249, 251, 467 N.Y.S.2d 757, 759 (1983) (arbitration provision contained within consent to abortion invalid and unenforceable). Although the contract was specifically held not to be a contract of adhesion ("the petitioner, not confronted with a medical emergency, could have obtained an elective abortion elsewhere at countless other health facilities in the metropolitan area"), the above agreement lacked mutual consent "because it had not been demonstrated that the petitioner made an informed and knowledgeable waiver of her constitutional right to trial by jury." Sanchez, 121 Misc.2d at 252, 467 N.Y.S.2d at 759-760. The Sanchez Court took notice of legislation in other states requiring a conspicuous statement in the arbitration agreement in medical malpractice cases that the right to trial by jury is being relinquished. See, e.g. Cal. Code of Civ. Pro., § 1295(b) (1976) ("NOTICE: BY SIGNING THIS CONTRACT YOU ARE AGREEING TO HAVE ANY ISSUE OF MEDICAL MALPRACTICE DECIDED BY NEUTRAL ARBITRATION AND YOU ARE GIVING UP YOUR RIGHT TO A JURY OR COURT TRIAL."). The Sanchez Court also took into account the circumstances under which the purported agreement was signed, recognizing that patients' physical or mental distress when such agreements are signed may impede rational decision making:

It is only the unusual patient who faces surgery without fear and trepidation. The anxiety produced by thoughts of soon entering the operating room, an unfamiliar setting, and the ever present possibility of an untoward result, create an inappropriate atmosphere in which to thrust upon a patient for the first time the burden of analyzing documents containing an arbitration provision inconspicuously embodied therein.

Sanchez, 121 Misc.2d at 255, 467 N.Y.S.2d at 761.

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