Statutory Provisions Specifically Relating To Medical Care Weigh Into The Result

     Statutory provisions are the key to the next decision, Raynond v. Kram, Case No. B236552 (2nd Dist. Div. 3 Dec. 7, 2012) (Kitching, J.) (unpublished).  The case involved a malpractice lawsuit brought by the patient, Raymond, against his treating physician, Kram.  Dr. Kram appealed an order denying the his motion to compel arbitration.  The Court of Appeal held that “the arbitration agreement was not substantively unconscionable because of its provision requiring Raymond to pay the fees of his arbitrator and half the fees of the neutral arbitrator. The lack of substantive unconscionability requires reversal of the order denying defendant’s petition to compel arbitration.”

     Why didn’t the arbitration provision requiring the patient to pay the fees of the arbitrator and half the fees of the neutral arbitrator result in substantive unconscionability?  Essentially, we can identify four reasons.  First, the arbitration provisions complied with the notice language required by Cal. Code of Civ. Proc. section 1295, pertaining to any contract for medical services which contains a provision for arbitration of any dispute as to professional negligence.  This notice language explains the consequences of arbitration, includes certain capitalized words, and provides the patient with 30 days to rescind the agreement to arbitrate.  Second, Dr. Kram did something tactically smart, and not required by statute – he offered to advance certain of the costs.  Third, the Court of Appeal pointed out that Cal. Code of Civ. Proc. section 1284.2 requires each party to the arbitration to pay his pro rata share of the expenses and fees of the neutral arbitrator, unless there is a different agreement.  Fourth, the Court of Appeal pointed out that this case, unlike consumer cases that have weighed in against requiring the plaintiff to pay costs, did not involve unwaivable consumer rights.

     Additionally, the plaintiff argued that arbitration could lead to inconsistent results with a lawsuit involving a third party, a reason for which a court may decide to deny a request to arbitrate.  Here, however, Cal. Code of Civ. Proc. section 1281.2, the provision allowing a court to deny arbitration to as to avoid inconsistent results, contains an exception that applies to an agreement to arbitrate disputes as to the professional negligence of a health care provider.

     Evidently, the fact that the patient earned $24.72/per hour did not factor into the unconscionability analysis of fee shifting.  As Anatole France acidly put it, “The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.”