In Franks, etc. v. Bowers, et al. (SC11-1258), the Florida Supreme Court found that an agreement for the arbitration of medical malpractice claims that does not contain the statutory reciprocal incentives for arbitration provided in certain provisions in the Medical Malpractice Act (ss.766.201-212, F.S.) is void as against public policy, and is therefore unenforceable.

Joseph Banks sought medical treatment from the defendants. Following surgery, he suffered a hematoma and died. His wife filed suit against the defendants for wrongful death caused by medical malpractice. Pursuant to a financial agreement executed by the deceased and the defendants prior to the surgery, which provided that any dispute resulting from treatment be resolved in lieu of any trial pursuant to the Florida Arbitration Code, and which limited non-economic damages to a total of $250,000 for any event, the defendants moved the trial court for an order compelling arbitration. The trial court granted the order, which was affirmed by the 1st District Court of Appeal. Franks v. Bowers, 62 So.3d 16 (Fla. 1st DCA 2011).

The Supreme Court quashed the decision below, and concluded that the arbitration agreement violated the public policy behind the arbitration provisions of the Medical Malpractice Act. The Court pointed out that the Act provides specific incentives to both claimants and defendants to resolve disputes through arbitration. For example, a claimant who agrees to arbitrate a malpractice claim is assured that the question of liability, or responsibility for injuries, will not be disputed. Only the amount of damages would be subject to arbitration, and the claimant is assured of prompt payment of any award. A defendant in malpractice arbitration, on the other hand, receives the protection of a statutory cap on noneconomic damages that is lower than what might be available if the claim proceeded through trial in court. The Court held that these reciprocal incentives provided to both parties under the Medical Malpractice Act were necessary aspects of the malpractice arbitration scheme, and that the statute could only serve its intended purpose of addressing what the Legislature had found to be a crisis in medical malpractice with the balance of incentives for both claimants and defendants contained in the act. An agreement that that upsets this balancing of interests may be invalid. In other words, “[b]ecause the Legislature explicitly found that the MMA (Medical Malpractice Act) was necessary to lower the costs of medical care in this State, […] any contract that seeks to enjoy the benefits of the arbitration provisions under the statutory scheme must necessarily adopt all of its provisions.” (Op. at 14). As the agreement at issue attempted to provide a cap on noneconomic damages to benefit the defendants but did not contain the incentives for claimants provided for in the Act, the arbitration provision was against public policy.

The Court additionally found that the arbitration provision of the agreement was not severable from the rest of the agreement, and that the medical malpractice arbitration statutes were not preempted by federal law. It therefore quashed the decision of the First District, and the case has been remanded.

When Medical Malpractice Arbitration Agreements May Violate Public Policy

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