• Florida Supreme Court Voids Physician-Patient Pre-Treatment Arbitration Agreement
  • July 8, 2013 | Author: I. Paul Mandelkern
  • Law Firm: Lowndes, Drosdick, Doster, Kantor & Reed Professional Association - Orlando Office
  • Last month the Florida Supreme Court ruled in Franks v. Bowers, a 5-2 decision, that a pre-treatment arbitration agreement between a patient and a surgical medical group was void because it was against Florida public policy.  In that case, a majority of the Supreme Court reversed the lower courts and sided with Mrs. Franks whose husband died of complications a few days after Dr. Bowers performed a surgical procedure on him.  Prior to his first visit with Dr. Bowers, Mr. Franks signed a financial agreement with Dr. Bowers’ group practice which contained two relevant provisions.  First, the agreement provided that in the event of any dispute between Mr. Franks and any physician employed by the group, for any reason whatsoever, including medical malpractice, the parties would resolve the dispute by arbitration in lieu of any trial by a judge or a jury.  Second, the parties agreed that in the event of any such controversy or dispute, Mr. Franks’ non-economic damages, such as damages for pain and suffering, would be limited to a maximum of $250,000.

    The starting point for the majority’s opinion in Franks v. Bowers was to compare the financial agreement that Mr. Franks signed with the relevant requirements of the Medical Malpractice Act (MMA) enacted by the Florida Legislature in 1988.  The MMA provides for voluntary and court ordered arbitration of medical malpractice claims but not mandatory arbitration.  If the parties agree to voluntary arbitration, there is a limit of $250,000 for non-economic damages, but the defendant is not allowed to contest its liability.  Further, the MMA permits the plaintiff to recover a maximum of $1 million in non-economic damages if the case proceeds without either party seeking arbitration or if the plaintiff requests arbitration and the defendant refuses.  In contrast, the agreement that Mr. Franks signed required arbitration to resolve any dispute, did not prohibit the defendant from contesting its liability, and capped the plaintiff’s recovery of non-economic damages at $250,000.

    The dichotomy between the provisions of the MMA and Mr. Frank’s pre-treatment financial agreement regarding mandatory arbitration and a cap on non-economic damages was the basis for the majority’s finding that the financial agreement forced the patient to forego his or her right to pursue a claim in court and limited the amount of recoverable damages without requiring the defendant to forego contesting its liability or give up any other rights in return.  Based on this finding, the Supreme Court majority ruled that the financial agreement is in contravention of the public policy pronounced by the Legislature when it passed the MMA and therefore is void.

    However, the Florida Supreme Court’s opinion did not determine whether a patient-physician pre-treatment arbitration agreement that requires arbitration but does not limit the recovery of non-economic damages to an amount less than that provided by the MMA will also be void as against the public policy of Florida.

    As a result of Franks v. Bowers, Florida physicians who require pre-treatment arbitration agreements with their patients, or wish to do so in the future, need to make sure that the agreement complies with the ruling in that case.  Also, patients should not agree to pre-treatment arbitration agreements that have a cap on non-economic damages unless the agreement precludes the physician from contesting liability.