Having witnessed the effects of several “malpractice crises”, I am anxious to avoid another.
I have had the privilege of defending physicians and hospitals throughout the state for over 40 years. For many of those years, I’ve tried more medical malpractice cases than any other defense lawyer. In 1968, I founded the law firm of Post & Schell and by the time I was retired several decades later, my firm was the largest law firm in the state that was devoted almost exclusively to the defense of physicians and hospitals. The recommendations contained in this article arise not only from my experience as a defense lawyer, but also as the President of Professional Casualty Association, a malpractice insurance carrier insuring approximately 1900 Pennsylvania physicians.
In the early 70’s, we navigated through the tremendous increase in medical malpractice law suits. The trend continued and by the early 2000’s, we witnessed the exodus of countless talented physicians from our state. Outstanding physicians and new graduates were forced to leave Pennsylvania when their malpractice premiums were, in some instances, increased ten-fold. Along the way, several malpractice insurers left the state as well, or went out of business entirely, or canceled the policies of many of their policyholders.
Unfortunately, malpractice insurance carriers continue to make the same mistakes. They are focused on short term interests and short term gains. In the process their physician policyholders have not been their priority. I am concerned that we are witnessing yet the start of another crisis. Everything possible should be done to prevent history from being repeated and I suggest that the prevention of another crisis is within the control of physicians.
My proposal is simple. In short, I propose that physicians fight every malpractice claim, through trial and even appeal, unless the case is one of clear liability. Physicians can control their destiny. They can and should exercise their right to withhold their consent to settle, and they should indeed refuse to settle, unless they are faced with a clear case of malpractice.
To understand why I advocate such an aggressive approach, some understanding of the legal system is necessary. There are practical considerations that affect plaintiff and defense lawyers, the court system, and malpractice insurance carriers.
PLANTIFF LAWYERS: With very few exceptions, the typical plaintiffs’ law firm cannot afford to go to trial on more than a small percentage of its cases. The cost to try a malpractice case varies, but the cost can range from $20,000-$50,000. In major cases, the cost can be more. These figures include expert fees, court costs, deposition fees, the expenses of non-expert witnesses. In appeals, the cost can mount dramatically.
The above referenced costs are over and beyond the salaries of the lawyers and their legal staffs. On average, a malpractice trial will take a week or two of in trial court time. Far more time is expended in trial preparation, at an enormous cost to the typical law firm.
Conversely, with a strong and aggressive defense, 90% of malpractice trials can result in defense verdicts.
When these competing interests are fully appreciated, the results are obvious. If plaintiffs are forced to try most, if not all their cases, claims and lawsuits will not be brought except in those cases of clear liability, those cases which are few and far between. It is a fact of life that the great majority of plaintiffs’ law firms rely on their ability to compromise and settle questionable cases in order to exist.
DEFENSE LAWYERS: The defense lawyers are paid by the hour. The defense lawyer’s income is the same whether working in a courtroom, with the pressure and aggravation of trial, as when working in the comfort of his or her office.
Nevertheless, all lawyers have an obligation, both ethically and morally, to comply with the wishes of their clients. If the insurance carrier wants the case settled, because of the expense of trial, or if the physician wants the case settled because she or he does not want publicity, or does not want time away from the office, or is experiencing “stage fright”, there is little incentive for the defense attorney to do anything other than settle the case.
Such a settlement might make short term economic sense. However, it is a disaster to the long term interest of the medical community. These settlements are a financial incentive to the plaintiff attorneys to bring more claims, even those of the frivolous type.
TRIAL JUDGES: Most trial judges are responsible and dedicated to judicial justice, but consider their priorities. The judge’s first reaction is to see if a case can be settled. The second reaction, on occasion, is to try to pressure for settlement. The judge’s intentions may be completely honorable and indeed, may be trying to protect the physician. But the overall effect is to create yet another step in the path to compromise and settlement. Some aggressive judges may even insist that the physician come into chambers to enable more arm twisting for settlement.
THE MALPRACTICE INSURANCE CARRIER: The carrier can and does create the most pressure for settlement, again with emphasis on short term profit and possibly ignoring the long term disaster created for the physician community.
Picture an insurance underwriter who views a law suit as a series of potential costs: $30,000 in expert fees, $30,000 and more in legal fees, plus a myriad of other litigation expenses. If such a case can be settled for $75,000 that may make “economic sense”. Even if the chances of winning at trial are good, an economic settlement would be the best short term solution. With the latter approach, the danger, albeit remote, of a sizable plaintiff’s verdict is avoided.
Now picture an insurance adjustor who has the same cost concerns as indicated above, who also may have to worry about explaining to his or her superiors, a decision to defend a case. If the claims adjustor could have settled the case at a cost comparable to the expenses involved, in the event of a plaintiff’s verdict, that adjustor is subject to criticism. In the event of a plaintiff’s decision on more than one occasion, that adjustor’s job could be in question. Why would the adjustor take a chance of fighting the claim when the adjustor may be saving money in the short run and possibly his job as well? The fact that he may be causing more litigation in the long run is not of paramount importance in the short run.
If these comments about insurance carriers seem facetious, consider the results of their actions. Cases are settled that should not be compromised, plaintiff’s attorneys earn large fees and are encouraged to bring more claims with the expectation of settlements and profits, the insurance carrier has saved money in the short run but as the trend continues with the number of cases increasing, the seeds of a malpractice crisis are sowed. The carriers start canceling coverage for physicians, move most of its business out of Pennsylvania to a more profitable state in which to do business, starts increasing premiums, or possibly abandons the marketplace. The spiral, if it continues, provides the basis for a malpractice crisis. It is exactly this type of spiral that has occurred on several occasions over the last several decades. This scenario may be starting again.
THE PHYSICIAN: How does the physician stop this spiral? Start by refusing to authorize settlement, except in a clear case of malpractice. Do your best to find a dedicated, aggressive lawyer who is willing to fight for your defense, to make sure that the best experts are retained in your behalf, and that you and your witnesses are thoroughly prepared for testimony. Be willing to devote the time for adequate trial preparation and understand that a “case of nerves” is usually overcome once the trial begins. Believe it or not, most physicians feel gratified once their cases go to trial. The decision to standup for oneself is priceless.
If your carrier asks for authorization to settle, make sure you do not succumb to pressure. Explain that you have conformed to accepted standards and you are willing to go to trial to prove it. If your attorney applies pressure on you to settle, do your best to make sure the attorney knows your expectations; that is, you want your treatment vindicated. If your attorney continues to insist on settlement, consider the advisability of arranging for new counsel.
The right to refuse settlement is a powerful weapon for physicians in almost all insurance policies. If employed extensively by most physicians, there will be fewer economic settlements, fewer claims and lawsuits, premiums will decrease, and the chances of another malpractice crisis will be reduced.
This article originally appeared in our April 2011 issue. Barton L. Post was the founding Partner of Post & Schell, a leading medical malpractice defense law firm. He is founder and President of Professional Casualty Association, a Pennsylvania licensed and admitted physician insurer. For more information, contact 610.337.3374.
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