Important Florida Supreme Court Ruling on Arbitration Agreements for Medical Malpractice

Many Florida health care providers ask patients to sign arbitration agreements before they are treated. These agreements keep medical malpractice cases from going before a jury.

A medical malpractice cause of action in Florida is controlled by Chapter 766 of the Florida Statutes, the Medical Malpractice Act (MMA). The MMA specifically states that after the pre-suit and investigation requirements are fulfilled, either party may ask the others to submit to voluntary binding arbitration.

Assuming the claimant offers and the defendant agrees, the statute caps damages that may be awarded at arbitration to $250,000 for non-economic damages, calculated in terms of percentage of ability to enjoy life. (Non-economic damages include pain and suffering, but do not include actual medical expenses). The defendant is required to concede liability in this scenario.

However, if a defendant does not agree to voluntary binding arbitration in a case where the claimant has died, the cap on non-economic damages is $1 million at trial. And if a claimant does not agree to voluntary binding arbitration requested by the defendant and elects to go to trial, non-economic damages are capped at $350,000.

Recently, an important Florida Supreme Court case interpreted the law in a way that should help many medical malpractice plaintiffs. The case arose when a 67-year-old man suffered a hematoma during hernia surgery when one of his veins was lacerated and later died. His wife filed an action against the surgeon and the surgical group who operated on him, suing for medical malpractice leading to wrongful death.

The surgeon and his group made a motion to compel arbitration in accord with an agreement signed by the deceased before his surgery. This agreement not only bound him and his estate to arbitration, but it also capped his non-economic damages in case of medical malpractice to $250,000 per incident. The agreement also stated that a patient who wished to complain had to follow the standard procedure of serving a pre-suit notice.

The trial court ordered arbitration. The decedent’s wife appealed, argued that the arbitration agreement violated public policy as articulated in the MMA. Nonetheless, the First District Court of Appeal affirmed the trial court’s decision. The decedent’s wife appealed to the Florida Supreme Court.

The Florida Supreme Court found that the agreement violated public policy. It explained that the arbitration provisions of the MMA were enacted to incentivize parties’ participation in binding arbitration, thereby reducing attorneys’ fees, costs, and delay in resolution. A defendant conceded liability by agreeing to arbitration and so the evidence standards were relaxed, but the non-economic damages were capped. Under the MMA, the plaintiff in this case would have been entitled to up to $1 million at trial if neither party sought arbitration or if the defendants declined to arbitrate.

While the arbitration agreement furthered the goal of getting parties to arbitrate, it removed the incentive that exists under the MMA for the defendants to act quickly to resolve the claim. It capped the damages at $250,000 without giving the plaintiff anything in return.

The Florida Supreme Court explained that by removing the incentives to the plaintiff to submit to arbitration, the arbitration agreement contravened the policy in the MMA. The limitation on damages could not be separated from the requirement to arbitrate in the agreement. Therefore, the entire agreement was void.

If you or a loved one has been hurt because of a health care provider’s negligence, call the experienced South Florida medical malpractice attorneys at Friedman, Rodman & Frank toll-free for a free consultation at (877) 448-8585.

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