In its decision filed on December 22, 2016, the Supreme Court of Florida (“Florida Supreme Court”) held that a medical malpractice arbitration agreement between a patient and her health care provider was void as against public policy because it excludes required provisions of the Medical Malpractice Act (“MMA”).
The Florida Supreme Court held that the medical malpractice arbitration agreement violates public policy because it includes statutory terms only favorable to the defendant health care providers, thereby contravening legislative intent in a way that is clearly injurious to the public good.
The Underlying Facts
On August 17, 2011, the plaintiff was 39 weeks pregnant and having contractions when she was turned away from her doctor’s appointment because she was a few minutes late; her appointment was rescheduled for August 21. On August 20, 2011, the plaintiff delivered her stillborn son.
On December 19, 2012, the plaintiff and her husband (also a plaintiff) provided the defendants with notice to initiate litigation regarding the treatment which caused their son’s stillbirth. On March 11, 2013, the defendants denied the plaintiffs’ claim, and on May 23, 2013, the plaintiffs filed their complaint against the defendants.
On May 31, 2013, the defendants filed a motion to stay proceedings and compel binding arbitration pursuant to the medical malpractice arbitration agreement between the plaintiffs and the defendants. On August 29, 2013, the plaintiffs requested binding arbitration pursuant to section 766.207, Florida Statutes, which the defendants rejected, arguing that they were enforcing the signed medical malpractice arbitration agreement that the parties had entered into (the wife had signed the agreement but the husband had not).
The Florida Supreme Court Decision
The Florida Supreme Court stated that parties may contract freely around a statute, but a contractual provision that contravenes legislative intent in a way that is clearly injurious to the public good violates public policy and is thus unenforceable. In order to determine whether the parties’ medical malpractice arbitration agreement violates public policy, the Florida Supreme Court stated that it must first determine the intent of the Legislature in passing the MMA.
The MMA statutory scheme includes, among others, the following provisions: the defendant’s concession of liability; neutral arbitrators including an administrative law judge; the defendant’s assumption of arbitration costs and attorney’s fees; the defendant’s responsibility for payment of interest on damages; joint and several liability of defendants; and, the right to appeal.
The Florida Supreme Court held that medical malpractice arbitration agreements which purport to incorporate the statutory scheme but have terms clearly favorable to one party, like the agreement between the plaintiffs and the defendants in this case, contravene the substantial incentives for both claimants and defendants to submit their cases to binding arbitration which the arbitration provisions were enacted to provide.
The medical malpractice arbitration agreement between the parties was defective because: it provides for patients to give up the right to a jury trial but severely limits the benefits provided in exchange for giving up that right; it provides a method through which the defendants can avoid arbitration under the statutory provisions altogether; it requires that the parties appoint arbitrators of their choosing within twenty days of a demand for arbitration, which favors the defendants more than the balanced MMA statutory provision calling for independent arbitrators (if the plaintiffs had demanded arbitration under Florida Statutes, the defendants could have withheld consent for twenty days after the plaintiffs’ demand and selected arbitrators who could render a decision the plaintiffs could not appeal under the terms of the agreement); it does not concede the defendants’ liability; it does not guarantee independent arbitrators or that one arbitrator be an administrative law judge as required by statute; it shares costs equally between the parties rather than having the defendants assume most of the costs of arbitration as in the statutory scheme; it does not provide for the defendants’ payment of interest on damages; it does not require joint and several liability of defendants as the MMA does; and, it dispenses with the right to appeal provided by the statute.
The Florida Supreme Court held: “We find that arbitration agreements which change the cost, award, and fairness incentives of the MMA statutory provisions contravene the Legislature’s intent and are therefore void as against public policy. If the Legislature had intended for parties to pick and choose which of the MMA’s provisions to include in their arbitration agreements, the MMA statutory scheme would be meaningless.”
Source Hernandez v. Crespo, No. SC15-67.
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