Prognosis grim in litigation crisis, judge says

KOLOA, Hawaii — The current crisis in malpractice litigation will probably get worse before it gets better, according to a federal judge speaking here.

Efforts at reform at the federal and state levels are encouraging, but case law shows a continued trend for damage awards to increase rather than decrease, said the Hon. Bruce M. Selya, of the First U.S. Circuit Court in Boston. Mr. Selya spoke here at Hawaii 2004: the Royal Hawaiian Eye Meeting, being held on Kauai.

Mr. Selya said the one word that describes the current state of the liability crisis is “up.” The incidence of litigation is up. The percentage of ophthalmology cases that make up the total of medical malpractice cases is up slightly to 4%. The number of states considered to be in a true crisis situation is up to 12. Insurance premiums are up 12% to 14% in the past 18 months, and in some areas up by as much as 200%. And finally, the size of jury awards is up.

None of this is good for ophthalmology, Mr. Selya noted. “What I have to say to you today is for the most part not humorous nor encouraging,” he said.

There are good signs in some areas, however. On the federal level, the Bush administration will continue to push Congress to pass the Help Efficient, Accessible, Low-Cost, Timely Healthcare (HEALTH) Act, Mr. Selya said. That bill would cap punitive damages and reign in the extensions to the statute of limitations that have allowed suits to be brought many years after the fact. It would also supersede any state laws in areas where the states are more permissive.

The bill was passed by the House last year but has stalled in the Senate, where opponents have threatened a filibuster. President Bush has made the act a priority, and it will be an issue in the upcoming election, Mr. Selya said.

The situation at the state level varies around the country, but 16 states have now passed some type of liability litigation reform, the judge said. Some states, such as Nevada, have required judges to undergo special training before they can preside over malpractice cases. Two states have prohibited “venue shopping,” the practice of filing suit in jurisdictions where jury awards tend to be high. Others have elevated the burden of proof needed.

But on the other hand, the judge said, some jurisdictions, such as Florida and Massachusetts, have resisted every effort to introduce any type of liability litigation reform.

It is on the judicial front that Mr. Selya said the outlook for reform is least promising. He said there are a few indications that on the national level the judiciary is taking a more conservative view and recognizing the runaway growth of jury awards. But in most case law, plaintiffs’ lawyers are still finding ways to increase, rather than decrease, the amount of malpractice awards, he said.

Three areas in particular are worrisome, Mr. Selya said. First, while legislators are looking for ways to tighten the statute of limitations, some courts, such as the New Jersey Supreme Court, have expanded it. Second, there has been an increase in suits seeking damages for the “loss of chance,” rather than for actual damages. Third, plaintiff’s lawyers are increasingly using medical practices’ own marketing materials to, in effect, transform malpractice cases into breach-of-contract cases. Using this strategy, plaintiffs argue that the promises made or implied in marketing materials override the informed consent process.

This last item most directly affects ophthalmology, the judge said, especially in LASIK cases. He advised all practitioners to have their marketing materials reviewed by a lawyer to guard against this type of suit.