(Please note: the names and locations of all parties have been changed to protect the confidentiality of the participants in this medical malpractice/personal injury case and its proceedings.)
Allocation of Arbitration Fees
Article 3 of the Defendant Black’s Physician-Patient Arbitration Agreement requires that each party pay for the cost of arbitration and the pro rata share of the arbitrator’s fees. For more information you are welcome to contact Sacramento personal injury lawyer, Moseley Collins.
In Armendariz the employees were required to pay their pro-rata share of the expenses and fees of the arbitrator and to pay for all other expenses incurred. The Court in Armendariz states that … it would undermine Congress’s intent to prevent employees who are seeking to vindicate statutory rights from gaining access to a judicial forum and then require them to pay for the services of an arbitrator when they would never be required to pay for a judge in Court. Armendariz, supra, 24 Cal. 4th 108. The Supreme Court stated that arbitration is imposed by the employer and occurs at the employer’s option. Therefore arbitration fees should be borne solely by the employer. Armendariz, supra, 24 Cal. 4th 108, citing Cole v. Burns Intern. Security Services (D.C. Cir. 1997) 105 F. 3d 1484-1485.
Arbitration fees can be upwards to $8,000.00 per day or greater. (The daily fee for many retired judges, for instance, providing services for JAMS.) If Ms. Hall, who is a mother and homemaker, and Mr. Hall, who is a construction worker, both in a similar economic position as the employees in Armendariz, must pay the prohibitive cost of arbitration, they would be substantially deterred from bringing a claim for medical negligence.
Defendant Black would not be deterred from defending the claim through arbitration because his economic status is substantially different than Ms. Hall. Therefore, the provision with regards to fees is substantively unconscionable as it places an unfair economic burden on the Plaintiffs which may ultimately deter them from pursuing their claim.
Severability
The final issue here is whether the unconscionable provisions warrant the entire arbitration agreement to be voided or if the offending provisions can be severed to avoid an illegal result. Martinez v. Master Protection Corporation (2004), 118 Cal. App. 4th 119, citing (Civil Code Section 1670.5(a)); Armendariz, supra, 24 Cal. 4th 121-124. The Court in Armendariz stated that Courts are to look to the various purposes of the contract. If the central purpose of the contract is tainted with illegality, then the contract as a whole cannot be enforced. If the illegality is collateral to the main purpose of the contract, and the illegal provision can be extirpated from the contract by means of severance or restriction, then such severance and restriction are appropriate. Armendariz, supra, 24 Cal. 4th 124. (See Part 9 of 10.)
For more information you are welcome to contact Sacramento personal injury lawyer, Moseley Collins.