Although lobbyists for the insurance companies and the AMA are winning the PR battle over the representation of medical malpractice litigation (as they are winning the battle over health care reform), the truth is that physicians and their insurers rarely are forced to settle outrageous medical malpractice claims for significant amounts of money. Instead, malpractice defense lawyers have a distinct power advantage, especially in the pre-trial negotiations stage, and they use that power to lever personal injury lawyers and their clients to accept relatively small settlements in lieu of a trial.
What are the sources of malpractice defense lawyers’ bargaining power? The actual circumstances are too complex to discuss in detail, but here’s a rough idea
- Uneven stakes lead to hard bargaining—While the monetary amount at stake in malpractice litigation is a zero-sum game, i.e. whatever the one loses, the other gains, there are uneven amounts at stake overall because doctors risk damage to their reputation and self-image, while the insurer risks losing other clients if it is perceived as unable to protect doctors. This leads them to fight and bargain these cases harder than clients and lawyers making all but the strongest lawsuits.
- Uneven risk tolerance—Risk tolerance is a measure of how likely a person is to take a certain amount of reward versus taking a risk for a larger award. Overall, physicians and insurance companies are much more risk tolerant than personal injury plaintiffs, because the plaintiffs have just this one case, this one time to get a settlement, while insurance companies, especially, don’t mind taking a risk because they know the odds are in their favor.
- Anticipated jury skepticism—Juries tend to be dubious about malpractice claims. When a patient sues a doctor, the jury defaults to trusting the doctor, increasing the patient’s burden of proof. Lawyers know this, know that in a close case, the verdict usually goes to the defendant. Because of this, plaintiffs and their lawyers are more likely to take a settlement than go to trial.
- Superior resources—Malpractice defendants have several resource-advantages they can bring to bear during trial that will encourage plaintiffs to settle out of court for discounted rates.
- Doctors tend to know more about the specific circumstances of a patient’s treatment than the patient does, and they use this information to their advantage.
- The doctor has friends and associates on which to call to testify as to the circumstances of the case and the treatment.
- Malpractice defense attorneys are specialists maintained at high premiums by insurance companies to deal with the very precise circumstances of malpractice cases, while plaintiffs’ attorneys are more often generalists, and more often less experienced.
- Physicians and insurers have superior financial resources to bring to bear in preparing their case.
For all these reasons, physicians and their insurers tend to force smaller settlements in malpractice cases they choose to settle. In order to ensure that you receive a reasonable settlement in your medical malpractice case, you need a lawyer with the case experience, the bargaining skill, and the determination to get you the money you need to make up for the unfortunate damage suffered as a result of a doctor’s negligence. If you or a loved one has been injured by a healthcare professional, contact the experienced medical malpractice lawyers at Pomerantz, Perlberger, & Lewis, LLP.
