Both federal and state legislatures have expressed a preference for binding arbitration where the parties so agree. In the absence of fraud, duress or unconscionability, the courts routinely enforce those private agreeements and compel arbitration. There is little judicial hesitation to enforce arbitration agreements when agreed between two sophisticated commercial parties. They are common requirements in any brokerage or employment agreement.
Can a physician compel her patient to arbitrate any disputes over the quality of care provided the patient? Is such a requirement unenforceable per se as a violation of public policy and unconscionable?
The New Jersey Appellate Division recently held that an agreement to arbitrate medical disputes is not per se unenforeable. Given the legislature’s approval of arbitration as codified in the state’s Arbitration Act, there appears to be few limits to an agreed upon written agreement to arbitrate as long as the language and execution process seem fair. In Moore v. Woman to Woman Obstetrics, the court rejected an absolute ban on arbitration agreements between a doctor and patient but reversed the grant of summary judgment to the defendant based on the factual record before the court.
Arbitration is here to stay. A carefully and equitably drafted arbitration agreement is crucial to its enforcement. But defendants must be careful not to overreach and ensure that the execution process is fair if they hope to have the agreement enforced by the courts.
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