by Holly Hayes An article in the November 18, 2010 issue of the New England Journal of Medicine (NEJM) explores “Medical Malpractice Liability in the Age of Electronic Health Records.” The Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009 authorized an estimated $14 billion to $27 billion to promote “meaningful use” of electronic health records (EHRs) by clinical providers. The authors of the article believe, “In the excitement over health information technology, some of the potential risks associated with it have received less attention, such as the possible effects of this technology on medical malpractice liability.” The article states: The liability implications of EHRs are likely to vary over the life cycle of the adoption of these systems. We begin by examining the period of initial transition to EHRs, during which predictable implementation snags may heighten providers’ liability risk. After this initial period, EHRs have the potential to reduce injuries and malpractice claims but will also create opportunities for error and will alter the context for proving and defending malpractice claims with the use of electronic information. Finally, the long-term effects of widespread adoption of EHRs include potential shifts in the legal standard of care that may not favor providers. The authors of the NEJM article advise health care providers to actively manage EHR-associated risks through the following steps: First, they can decline to sign contractual provisions that immunize the system developer. Second, they can select systems that are designed to minimize the risk of user error or misuse and maximize the ease of record retrieval. Third, organizations that adopt EHRs can ensure that clinicians receive thorough training, including education about organizational expectations regarding the use of the system. Hospitals can monitor the use of the system after implementation for obvious problems. Physicians, for their part, must be willing to climb the learning curve. Understanding how using EHRs may help protect them from liability, and how misuse or nonuse may increase liability risk, should motivate them to do so. Fourth, organizations can ensure that practice conditions are such that the use of the new technology can be maximized. Identification of appropriate practice conditions will require organizations to work closely with their care teams to identify existing barriers to the optimal use of EHRs, whether these involve the length of office visits, the placement of computer terminals, problems accessing external records, or other factors. Fifth, managing patients’ expectations about secure messaging and accessing of EHRs is pivotal. Finally, when physicians serve as experts in malpractice litigation, they can educate liability insurers and courts about the limitations of clinical-decision support systems and the appropriateness of departures from them in certain situations. Early in November, Disputing posted a beginner’s guide to negotiating an Electronic Health Record (EHR) software license agreement. We welcome your comments on medical malpractice as it relates to the implementation of EHRs. Holly Hayes is a mediator at Karl Bayer, Dispute Resolution Expert where she focuses on mediation of health care disputes. Holly holds a B.A. from Southern Methodist University and a Masters in Health Administration from Duke University. She can be reached at holly@karlbayer.com. Technorati Tags: Mediation

On November 26th, the Chartered Institute of Arbitrators (CIArb) launched a major survey into the costs of international arbitration. According to the CIArb News: The ‘Costs of Arbitration’ survey will gather data to inform parties, legal representatives and arbitrators about the overall costs of international commercial arbitration and how these are incurred at each stage. The results will be analysed and presented at an international conference organised by CIArb and sponsored by Alvarez & Marsal on 27 – 28 September 2011 in London, aimed at uncovering ways in which costs might be reduced and the process streamlined to become more cost-effective and efficient. International arbitration has a justifiable reputation as the preferred method of dispute resolution for international commercial disputes. The worldwide economic downturn has accelerated a rising trend in favour of the use of international arbitration, where the enforceability of awards under the New York Convention gives it a major advantage over litigation in national courts. Globally, governments have invested in bringing their arbitration laws up-to-date and building modern arbitration centres to capitalise on this growing market. However, as the size and complexity of disputes referred to international arbitration has increased, so too have concerns about the growing complexity, cost and time involved in the process, diminishing some of the very factors that make it preferable to the courts for commercial dispute resolution. CIArb’s Costs of Arbitration survey will play a key role in understanding the present position and, together with the international conference on the Costs of International Arbitration, finding ways of tackling the problem and reducing the costs of arbitration. Party representatives or arbitral tribunal members may complete the survey here. More information about the conference at which survey results will be presented is available here. The full article may be read here. Technorati Tags: law, ADR, arbitration

After 34 years, the United Nations Commission on International Trade Law (UNCITRAL) has revised its International Arbitration Rules. The revised Rules seek to expedite the arbitration process and account for changes in technology since the Rules were originally adopted in 1976. According to Ben Allen and Adam Hunter of Norton Rose LLP’s Sydney Office, the following changes apply to international arbitration agreements that took effect after August 15, 2010: Parties no longer have to agree in writing that the UNCITRAL rules will apply to the arbitration. Any record that displays an agreement to be bound by the Rules is sufficient (Article 1). The Notice of Arbitration may now be transmitted electronically; arguments that address sufficiency of notice will no longer hinder the constitution of the tribunal (Articles 2 & 3). Parties waive the right to bring any claim against the arbitrators and the appointing authority based on any act or omission in connection with the arbitration (other than intentional wrongdoing) (Article 16). Third parties may now be joined to the proceedings and claims made against them in response to the Notice of Arbitration (Article 17). New interim measures outline the Tribunal’s power to require the applicant to provide security, to alter or terminate the interim measure imposed and use costs and damages awards to prevent or compensate for abuse of the procedure (Article 26). The revised Rules introduce the right to external review and correction of arbitrators’ fees (Article 41). The revised Rules do not govern confidentiality. You may read more about the revisions here and here. Disputing previously discussed the new Rules here. Technorati Tags: law, ADR, arbitration

The Supreme Court of Texas has held that the Federal Arbitration Act (FAA) preempted the Texas General Arbitration Act (TAA) in three related general arbitration clauses, but that a similar, more specific clause was unenforceable under the TAA. In In re Olshan Foundation Repair Company, LLC, Nos. 09-0432, 09-0433, 09-0474, 09-0703, (Tex. December 3, 2010), Olshan was sued by four different customers (Waggoner, Kilpatrick, Tisdale and Tingdale) who alleged the company performed faulty foundation repair work on their respective homes. Each repair contract was in writing and contained an arbitration clause. None of the agreements were signed by the parties’ attorneys or exceeded $50,000 in consideration. Olshan filed a plea of abatement in each of the four cases and sought to compel the disputes to arbitration under the FAA. A trial court denied Olshan’s plea in Waggoner by stating the TAA applied to the dispute and held that the arbitration clause was unenforceable pursuant to Chapter 171 of the Texas Civil Practice and Remedies Code. The trial court also held the arbitration agreement was unconscionable due to the costs which would be associated with an arbitral proceeding. In the remaining three cases, trial courts also denied Olshan’s pleas of abatement. Olshan next filed four writs of mandamus at the appellate level. After an appellate court consolidated two of the cases, all four writs were denied. In response, Olshan filed writs of mandamus to the Supreme Court of Texas, who consolidated all of the cases for argument. The arbitration clauses in Kilpatrick, Tisdale and Tingdale provided: Notwithstanding, any provision in this agreement to the contrary, any dispute, controversy, or lawsuit between any of the parties to this agreement about any matter arising out of this agreement, shall be resolved by mandatory and binding arbitration administered by the American Arbitration Association (“AAA”) pursuant to the arbitration laws in your state and in accordance with this arbitration agreement and the commercial arbitration rules of the AAA . . . . (emphasis added). According to the Court, The arbitration clause in the Waggoner (No. 09-0474) agreement is identical except for the language in bold, which states “pursuant to the Texas General Arbitration Act.” (emphasis added). After the Court examined FAA preemption and choice of law jurisprudence, the Texas Supreme Court discussed the Kilpatrick, Tisdale and Tingdale cases: Courts rarely read such general choice-of-law provisions to choose state law to the exclusion of federal law. See Mastrobuono, 514 U.S. at 59; L & L Kempwood, 9 S.W.3d at 127 n.16. Further, just as the FAA is part of the substantive law of Texas, the FAA would be part of the arbitration laws in Texas. See L & L Kempwood, 9 S.W.3d at 127 n.15 (quoting Capital Income Props., 843 S.W.2d at 23). The language of the arbitration clause designating arbitration pursuant to “the arbitrations laws in your state” includes the FAA. See id. at 127–28. Thus, the FAA applies to the three agreements that include the “arbitration laws in your state” language, and the FAA preempts the provisions of section 171.002(a)(2) of the TAA that would otherwise render the agreements unenforceable. The trial courts abused their discretion in denying Olshan’s requests to compel arbitration based on the unenforceability of the arbitration under section 171.002(a)(2) in the Kilpatrick, Tisdale and Tingdale cases. In contrast, the Court denied Olshan’s writ of mandamus in the Waggoner case: This is not the same general choice-of-law provision. This provision chooses a state’s substantive law, specifically the TAA, to govern disputes under the agreement. A valid choice-of-law provision makes a conflicts-of-law analysis unnecessary; this provision expresses a preference between federal and state law. [L & L Kempwood at 127–28] The FAA is part of the arbitration laws of Texas and can be applied to arbitration administered pursuant to the laws of Texas. However, the FAA is not part of the TAA, at least to the extent the two are inconsistent. According to the Court, the plain language of the Waggoner agreement indicated the parties’ intent that the TAA govern the scope of the arbitration agreement. The court also held that Section 171.002(a)(2) of the TAA “would render the Waggoners’ arbitration agreement unenforceable.” The TAA renders arbitration agreements unenforceable if the agreements containing the arbitration clauses are agreements for services “in which the total consideration to be furnished by the individual is not more than $50,000” and the agreements are not in writing, signed by each party, and each party’s attorney. TEX. CIV. PRAC. & REM. CODE § 171.002(a)(2). The Texas Supreme Court next addressed Kilpatrick, Tisdale and Tingdale’s contention that arbitration in accordance with the agreements would be cost prohibitive, which rendered the arbitration provisions unconscionable and thus unenforceable: The homeowners bear the burden to show the likelihood of incurring excessive costs, yet no homeowners provided any concrete idea of the amount of their claims. It is impossible to know how much they will be charged under the AAA rules, even if the fees charged by AAA were excessive. In refusing to hold the arbitration agreements unenforceable, the Court stated: The record contains no specific evidence that the homeowners will actually be charged excessive arbitration fees, and thus there is no legally sufficient evidence that such fees prevent the homeowners from effectively pursuing their claim in the arbitral forum. Finally, the Supreme Court addressed Kilpatrick, Tisdale and Tingdale’s contention that their contracts with Olshan violated the Texas Home Solicitation Act (THSA) because Olshan failed “to include in the agreements certain language regarding cancellation in at least 10-point boldfaced type, where the transactions occurred by personal solicitation outside Olshan’s place of business. TEX. BUS. & COM. CODE §§ 601.002(a), .052, .053, .201.” The Court refused to allow a trial court to determine whether the contract was valid and held the issue was for an arbitrator to decide: As the U.S. Supreme Court stated in Prima Paint Corp. v. Flood & Conklin Manufacturing Co., when the parties have contracted for arbitration of their disputes, a trial court “may consider only issues relating to […]