Florida Supreme Court Declares Medical Malpractice Arbitration Agreement Void

Florida Supreme Court Declares Medical Malpractice Arbitration Agreement Void. The case is Hernandez v. Crespo, 41 Fla. L. Weekly S625 (Fla. 5th DCA December 22, 2016).

A woman was 39 weeks pregnant and started having contractions. She was turned away from her doctor’s appointment and not seen because she was several minutes late. Her appointment was then rescheduled for four days later.  The day before the rescheduled appointment, the woman went into labor, and delivered her son stillborn.

Before she started being seen by her doctor, the woman had signed an extensive arbitration agreement. Under this agreement, she waived her constitutional right to a trial by jury, and agreed to have any certain disputes decided by the process of arbitration. Arbitration can be described as an out of court process used to resolve disputes between two parties. The arbitrator, instead of a judge and jury, reviews the case and imposes a decision that often legally binding on both sides and that can be enforced by the courts.

It is important to note that her husband never signed the agreement to arbitrate.  Under the agreement, after a lawsuit was filed, the defendants filed a motion with the court to take the case out of court, and into an arbitration proceeding.

The Florida Supreme Court recently reviewed the case and reminded us that to achieve the explicit purpose of remedying the alleged medical malpractice insurance crisis, the Florida Legislature specifically created the medical malpractice arbitration statutory scheme. The Court reiterated that it questions whether we still are in a medical malpractice crisis still. The Court first questioned this in Estate of McCall.

The legal issue in this particular case was not whether the arbitration provision was unconstitutional. Instead, the Court focused on whether the unilateral changes of the provisions in the statute and memorialized in the agreement, were in violation of Florida public policy.

The Court noted that that the medical malpractice arbitration scheme includes several fairness safeguard including, among other things, the defendant’s admission of liability, neutral arbitrators (including an administrative law judge) the defendant’s agreement to pay the arbitration costs and fees, the defendant’s responsibility for payment of interest on damages, joint and several liability of defendants and the right to appeal. But in this case, the arbitration agreement incorporated the statutory scheme to some extent, but then it cherry picked provisions that were more favorable to the defendants. Not exactly what we would call “fair.”

Fortunately, the Florida Supreme Court ruled that arbitration agreements that change the costs, award, and fairness incentives of the Medical Malpractice Act’s statutory provisions are against the legislature’s intent, they are void against public policy, because if parties can avoid the statutory provisions which are less favorable to them, that disrupts the balance of incentives that the legislature carefully crafted to encourage arbitration. The Court struck down the agreement, and allowed the parties to make their case in court.