Settling Malpractice Cases
Gita Pensa and Anand Swaminathan
- After a case is filed, there are three things that can occur:
- The defendant or the case can be dropped.
- The case can go to trial.
- The case is settled outside of trial.
- Cases are often settled even when there is no wrongdoing or malpractice on the part of the physician. This is known as the decision of economics.
- Benefits of settling the case:
- Speed
- Trials can last for many years.
- Settlement can resolve this much faster.
- Certainty
- Juries are unpredictable.
- Settlement removes guesswork or chance from the equation.
- Downsides of settlement:
- Plaintiff
- Loses the opportunity for a large windfall at the conclusion of the case.
- Insurer
- Success in trial can mean a lower payment than the settlement or even no payment.
- Settling cases may signal to attorneys that the insurer is an “easy mark” for frivolous lawsuits.
- Clinician
- Settlement results in reporting to the national practitioner database.
- Can take an emotional toll.
- The decision to settle depends on the malpractice policy.
- In many policies the insurer makes the decision.
- It is important to know how your policy works.
- Consent-to-settleclause
- The insurer needs the physician’s permission to settle.
- Hammer clause:
- May be present if there’s a consent-to-settle clause.
- If a physician says “no” to a settlement and there’s a judgement at trial against the physician, the physician is responsible to pay any amount over the proposed settlement.
- Factors considered:
- Physicians
- Consider reputation, justice, time, stress on self and family.
- Insurers
- Consider this as a business decision and will also be taking into account other cases.
- Will take into account the physician’s wishes, but will not always act on them.
- Strongly consider the optics of the case and how a jury will perceive the case and the physician.
- Physician deposition will often be taken into account (physician comfort, demeanor, etc).
Robert M. - December 13, 2021 3:48 PM
So, while I considered this segment informative. I feel like there should be a "Part 2." I can't speak to Dr. Pensa's work environment, but I do not agree with the implication that a report to the national reporting database is a benign event. In fact, you will spend the rest of your professional career explaining the event every time you credential. Moreover, I have seen advertisements for jobs but only if you have "a clean record." I'd like to think that we all agree that a settled lawsuit isn't an admission that you did something wrong. However, I'm not sure it is true. Perhaps, a discussion of what happens after the case settles -- with a focus on the unintended consequences of a suit or settlement (or even a loss)?
Gita P. - December 13, 2021 5:18 PM
Thanks for your comment, Robert. I agree that being reported to the NPDB is not a benign event. Nothing about litigation is benign, frankly. A settlement is something that will have to be explained and rehashed with every job application or application for privileges. Any ongoing lawsuits will also have to be reported and explained in applications (they will ask about any suits within the past several years, usually.) In the grand scheme of things, however, most *reasonable* employers understand that litigation is exceedingly common, and settlement is often not in the control of the physician. By the age of 55 almost 75% of emergency physicians will have been sued, and a large percentage of those suits will end in settlement. Although multiple lawsuits/settlements is a red flag to employers, a single settlement is usually not a deal breaker -- and typically applicants are also able to explain what happened in the suit during the application process, which often can reassure a potential employer. So -- benign event, no -- but neither is it a career ender for a physician who otherwise has a strong application.
Litigation is full of lousy choices for the doctor. Trial has its own pain, and its own risk. It probably looks better to have settled a case than to have lost at trial with an outsized award to the plaintiff.
Gita P. - December 14, 2021 5:25 AM
And Part 2 sounds like a great idea!
tom f. - December 17, 2021 2:10 AM
Gita
this was extraordinary.
I shall start to follow your blog.
I, as I suppose many, have my own personal horror stories regarding litigation, "wrongful" suits, and more. I see that you have quoted Dr. Greg Henry on one (or more) of your blogs. He is one of my all-time heroes. and friend (google: Tucker/ Greg Henry/ epmonthly).
yes, I think there are no real "winners" in litigation. there can be "collateral damage", years of stress, strain, injury to relationships, marriage, more.
thank you Gita and Swami for this pod
tom fiero, merced, ca.
and look me up in the NPDB.
tom
Gita P. - December 21, 2021 4:59 PM
Thank you Tom! Greg Henry is a hero of mine as well. You are so right about the 'collateral damage' -- thank you for your comments.