Arbitration Enforceability

A recent South Carolina Supreme Court decision has held that the South Carolina Adult Health Care Consent Act does not authorize a family member to consent to an arbitration agreement during the admission process to a health care facility. This greatly increases the difficulty in enforcing arbitration agreements in medical cases when the only signatory to the arbitration agreement is a health care surrogate lacking a Power of Attorney.

In Ann Coleman, individually, and as Personal Representative of the Estate of Mary Brinson v. Mariner Health Care, Inc., Slip Op. No. 27362 (March 12, 2014), the South Carolina Supreme Court held that an arbitration agreement, which was part of the process of admission to a nursing home, and signed by the sister of a patient, who was unable to consent on her own behalf, was not enforceable under the Adult Health Care Consent Act, S.C. Code Ann. § 44-66-10 (the "Act"). The Supreme Court further held that the doctrine of estoppel did not apply to allow the enforcement of the arbitration agreement.

The nursing home argued that the Act, which permitted the sister to make health care decisions, also allowed the sister to enter into the binding arbitration agreement. The Supreme Court held that the scope of the Act extended only to the nursing home admissions agreement which dealt with the provision of health care services and payment therefor. However, the Court held that the scope of the Act did not extend to the separate, voluntary arbitration agreement dealing with an optional method of dispute resolution.

The Supreme Court also rejected the nursing home's argument that the admission and arbitration agreements were merged and that the doctrine of estoppel allowed the enforcement of the arbitration agreement. The Court held that there was no merger because the two documents were separate.

As a result of the Supreme Court's decision, it will be difficult to enforce an arbitration agreement when a patient is incapable of consenting and the signatory to the agreement does not have the patient's Power of Attorney.

To discuss any questions you may have about arbitration provisions in contracts or admission agreements or the arbitrability of disputes, please contact any member of the healthcare group.