Overturning the veto of Democratic Governor John Lynch, the New Hampshire legislature has enacted a significant reform of medical malpractice, one that can serve as a model for other states.
You can find the details at the Cato @ Liberty website of the Cato Institute, by my friend Walter Olson. Briefly, it gives plaintiffs in medical malpractice claims incentives to solicit an early offer of settlement on economic losses from the defendant. If the plaintiff accepts the offer, pain and suffering compensation would also be paid by the defendant, according to a scheduled assessment as well as “reasonable attorney’s fees.” If the plaintiff turns down the offer, however, and fails to get at least 125 percent of the original offer from a jury award, then he would have to pay the defendant’s reasonable legal fees and expenses.
Under this new procedure, the plaintiff gets his case settled, and his compensation, quickly. He is made whole and gets on with his life. The defendant also has an incentive to settle quickly to avoid huge attorney’s fees of his own and the threat of an off-the-wall jury award.
The losers here are the tort lawyers. Tort lawyers, needless to say, opposed this reform tooth and nail because it seriously threatens to cut them out of the action. They much prefer pain and suffering awards to be settled by juries, which can be swayed by their histrionic talents as much as by the facts. They don’t want reasonable attorney’s fees, they want huge jury awards they get a hefty chunk of by means of a contingency fee arrangement. But tort lawyers are economic parasites, creating no wealth whatsoever, just transferring it from one party to another and taking a big cut of it (often a third, sometimes more) in the process. They deserve no consideration here. Besides, the plaintiff is free to stick to the old system, take his chances with a jury, and wait years for a final resolution.
If the new reform works as intended, the price of malpractice insurance in the state will go down, reducing upward pressure on medical costs and thus the cost of medical insurance for the average person. And, because good ideas always spread, it will make its way to other states.
The perversion of tort law for the benefit of tort lawyers in the last half century has been a disgrace to the country, and a very expensive one, too. This looks like a big step in the right direction.
"If the plaintiff turns down the offer, however, and fails to get at least 125 percent of the original offer from a jury award, then he would have to pay the defendant’s reasonable legal fees and expenses…The defendant also has an incentive to settle quickly to avoid huge attorney’s fees of his own and the threat of an off-the-wall jury award." Yeah, the usual ignorant drivel.
Defendants rarely come out of pocket to pay their own costs or med mal awards, it is the insurance companies who pay the defense costs and any awards; the plaintiffs have no such deep pockets funding them, so it is up to them and their attorneys, if they can find ones willing to take the all-or-none risk of going to trial, who bear all of their sides costs, which can be very substantial. And insurance companies regularly use their superior economic position to discourage would be plaintiffs from pursuing smaller claims no matter their merit and to grind them down if they do go forward. The notion of doctors bedeviled by a great many "frivolous" lawsuits is nonesense, because a plaintiff's attorney who isn't judicious in the cases he takes will not be in business for very long. This purportedly "fair" NH scheme is nothing of the sort, advantaging defendants by coercing plaintiffs to accept less than their cases are worth because they must fear being made to pay the defense's legal bills, while the defendants don't have to fear paying the plaintiffs legal bills, even if the plaintiff goes on to win more than the defendant ever offer in settlement.
What's wrong about this legislation is that a plaintiff can win a case and still be forced to pay the losing party's legal fees. That's crazy!
The incentive on the part of the defendant is to offer the plaintiff what his case is really worth as well as that can be ascertained. If the defendant tries to drive the settlement down too much he increases the chances of a jury court case AND a result that would exceed his settlement offer by 125% or more, something he surely wants to avoid. n n(I am addressing my remarks not to ambulance chasers but to the general public, which I trust wants and needs some means to contain the abuses that trial lawyers have been inflicting upon our justice system and the medical profession, which have thus skewed medical practice to be expensive and ridiculously defensive.) n nThis sounds like an excellent approach to the pernicious problem of “jack pot justice.” As J S Gordon suggests other states ought to use this as a template to be adjusted and fine-tuned, perhaps working with the arbitrary number of 125% for starters. I think that it should be further stipulated that, if a case goes to court, the jury must not be given any hint as to what the private settlement offer is. n
A lesson for all States. How to lower medical costs for all
John Steele Gordon does not have a clue as to how difficult it is to convince twelve jurors in the United States that a doctor negligently injured a patient. As dcdoc1 correctly noted in his comment, a lawyer would be crazy to file a case without substantial merit, since the odds of winning a medical negligence case are about one in ten, even with seemingly strong cases. Mr. Gordon's statement that trial lawyers want impressionable juries to decide the cases is also wrong. I am a lawyer and represent people injured by medical negligence. I have not requested a jury trial in at least ten years, because juries favor doctors over patients. In every case of mine, the doctors' insurance companies demand a jury trial because the defense lawyers know how difficult it is for an injured patient's lawyer to convince a jury that his or her client was injured by medical negligence.
This is a continuation of the two comments I just submitted. nI went to the web site of the National Practitioner Data Bank to see how injured patients have fared in New Hampshire. In 2011, there were only 41 people in New Hampshire who recovered compensation for injuries or death caused by doctor errors. In 2010, there were 40 people who recovered compensation. New Hampshire has a population of more than 1.3 million people, which means there was only one payment for every 32,109 people in the state. There are 3,954 doctors in New Hampshire. Thus, there are only 9.6 payments made for every 1,000 doctors practicing in the state. How in the world can you think the present system favors the injured people? n
This is my final comment. nThe authors of an article published in Health Affairs in April 2011, "The $17.1 Billion Problem: The Annual Cost of Measurable Medical Errors", found that 1,503,323 people are killed or injured each year by medical errors. Multiplying that number by New Hampshire's 0.43 percent of the U.S. population, there were 6,464 people who died or were injured last year because of malpractice. Compare that number to the 41 people who actually recovered compensation, and you realize that patients do not need any further hurdles put in their way to recovering fair compensation. For many injured people, the amounts of compensation allowed by the new law will not fairly compensate them for their injuries. The law provides a maximum payment for noneconomic damages of $140,000 for a permanent injury involving grave harm or death. If you think a payment of $140,000 to a 20-year-old brain-injured quadriplegic with no bowel or bladder function is "reform", you have a peculiar notion of justice.