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Courts debate damage caps and their collateral effects
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Legislative caps on monetary damages in medical malpractice lawsuits have been instituted by a number of states. Proponents of such caps argue that such controls are essential to retaining medical professionals, and giving them the space necessary to practice their craft. Damage caps may serve to check impassioned jury verdicts that have little connection to economic realities. In fact, damage caps are so worthwhile that proponents have argued for a federal rule whereby all damages in medical malpractice lawsuits would have monetary limits.
Opponents of such caps argue that they violate the constitutional rights of injured parties, unfairly interfere in the judicial process and discourage meritorious lawsuits from being filed. In the most egregious cases, opponents argue that patients with truly serious injuries are denied sufficient compensation because of artificial caps on damages. In this Orthopedic Medical Legal Advisor column, we examine this important issue, introducing what we hope are competing perspectives from both sides of this debate.
Impact of legal rules
The criminal justice system, with its complex rules concerning plea bargaining, sentencing and related issues is a good place to examine the complexity and secondary effects of creating rules that drive judicial matters. American society has long debated the appropriateness of capital punishment, for example, focusing on issues such as whether a crime is so heinous that death is warranted or whether society becomes more brutal when the state takes a life, even under the pretext of punishment. We are a handful of societies, for example, that continue to favor and prescribe the death penalty for certain crimes.
Other societies take an entirely different approach. Anders Behring Breivik, who massacred 77 people in Norway last summer, recently received a life sentence of 21 years with at least the possibility of release after that time. His time in a Norwegian prison will be spent in relative luxury, compared to the living conditions in U.S. prisons designed to house murderers.
B. Sonny Bal
Lawrence H. Brenner
While such debates are important for our society, criminal offenders and their attorneys have a far more concrete concern about this heated issue. In a capital murder case, a criminal defendant has little choice but to enter a plea to either first-degree murder with life imprisonment or second-degree murder because if a plea is not entered and the jury returns a guilty verdict, then death is the consequence. That is simply how the rules require it. Accordingly, faced with this potential outcome, those who are innocent or even those who are guilty of lesser offenses, such as manslaughter, are unlikely to take the risk of going to trial. This is simply a practical consequence of our legal system and the rules we have constructed for it.
Collateral effects
How does this discussion of capital punishment bear any relationship to medical malpractice claims? The answer lies in understanding the indirect impact of legislative changes that limit non-economic recovery. This is an issue that is seldom, if ever, explored in the debate concerning legislatively proscribed limits on medical malpractice claims. Most physicians will readily agree that such limits are a good thing, in terms of improving access to care, facilitating the practice of medicine in an environment without fear and controlling the wasteful practice of defensive medicine, where tests are ordered only to protect the physician against medical malpractice damages. But there is another, less considered side to limits on non-economic recovery in medical malpractice lawsuits.
If there is no limit on non-economic recovery, then a malpractice carrier will have far more incentive to settle rather than risk a jury’s ability to award unlimited damages. The reasons are obvious, as economic agencies, malpractice carriers assign an economic value to the lawsuit, making the best estimate possible of the underlying risk, and financial exposure involved.
When a malpractice carrier has a well-defined limit on its exposure, it is much less willing to negotiate a settlement, or if it does negotiate, the amount of settlement is substantially suppressed by the plaintiff’s limitations on recovery. This, in turn, has the impact of reducing the number of claims and lawsuits that are filed. In other words, with financial caps on malpractice damages recovery, fewer lawsuits are likely to be filed, and there is less incentive to settle the lawsuit, once filed.
Data from the legal profession attest to these observations. A recent report in North Carolina Lawyers Weekly, for example, discussed the decline in medical malpractice lawsuits, which is undoubtedly due in part to legislative changes, often referred to as “malpractice reform.” A 2011 report by the National Center for State Courts demonstrated that in eight sample states less than 2% of all incoming civil cases were malpractice lawsuits. Although this must certainly be encouraging to those who advocate a reduction in the frequency and severity of malpractice claims, this trend may merely be a short-term consequence of recent legislative changes. Malpractice is extremely ideological and American politics is quite dynamic. As a result, there undoubtedly will be both legislative and judicial efforts by those who oppose caps awarded in malpractice claims to reverse the trend reflected in the North Carolina Lawyers Weekly article.
Florida response
Florida voters approved a constitutional amendment that automatically revokes the medical licenses of any physicians who have had judgments entered against them in three cases. The Associated Press commented that “the three strikes law is just one salvo in a fierce battle between doctors and trial lawyers that is playing out across the country and in Congress. While several states have taken steps to limit malpractice awards, the fight is especially intense in Florida.” While there have been obstacles to the implementation of this constitutional amendment, it is likely that the future will see other proposed legislative changes from the plaintiff’s bar to offset the impact of the imposition of non-monetary caps. Since one person’s “malpractice reform” is another person’s “attack on victim’s rights,” such legislative changes are likely to occur as the political ideology of the country shifts over time.
Missouri removes caps
The judiciary also plays an important role in the impact that “malpractice reform” will potentially have since it can decide whether the “reform” is constitutional. Earlier this month, the Missouri Supreme Court struck down the $350,000 limit on jury awards for “pain and suffering” in medical malpractice cases. The court held in a 4-to-3 decision that the cap “infringes on the jury’s constitutionally protected purpose of determining the amount of damages sustained by an injured party.” The case arose out of a malpractice claim alleging a delay in the performance of an emergency C-section that resulted in an award of nearly $5 million, which was reduced under the 2005 Missouri law. The 4-to-3 decision was split along party lines. The four justices that found the law unconstitutional were Democrats and the three judges that dissented were Republicans.
There were strongly expressed competing opinions about the appropriateness of the Missouri Supreme Court decision. From the physician community, there were attacks on the court with the claim that Missouri would not be able to keep specialists, such as obstetricians and neurosurgeons, without such caps. As one physician stated, “it’s just outrageous, the Supreme Court’s decision is ultimately going to translate into endangering the lives of Missourians and their health.” The Missouri law had reduced the number of malpractice lawsuits filed from a yearly average of 847 to an average of 643 according to the Missouri Foundation for Health.
There were, of course, equally powerful responses from those who supported the Missouri Supreme Court decision. A patient advocate stated that “…medical errors would decrease because if doctors are held to compensate patients for the full amount of injuries, they would be more likely to act cautiously.” One woman who testified against the 2005 law had seen her son have severe brain damage from a medical error during surgery that left him totally and completely incapacitated. The Associated Press quoted her as stating, “What a victory for victims. We’re not talking about frivolous lawsuits here; we are talking about serious medical malpractice injuries that will affect my son for the rest of his life. He will never be able to live on his own, he will never be able to work, and he requires 24-hour constant care. If this was your son, how much is too much?"
Medical malpractice is a distressing problem for physicians, surgeons and society. As long as medical malpractice is argued within the confines of ideology and politics, there will always be shifts in power between organized medicine and trial attorneys. If we are to experience an enduring solution to the problem of malpractice lawsuits, we need to establish a coalition where physicians, surgeons and patients are not seen as adversaries in a political battle to assert their highly subjective view of their litigation rights, but as allies working together to solve the complex issue of malpractice claims and lawsuits.
What do you think?
Does a system of caps on medical malpractice lawsuits put seriously injured patients at risk of unfairly low compensation? If caps are a good thing, how can society identify those patients who are legitimately injured and compensate them appropriately, i.e., beyond the bounds of rigid caps on damages?
A system in which no caps restrain medical malpractice lawsuits results in more such lawsuits, as the data show, and more inclination to enter settlement discussions, rather than proceed to trial. Is this not the goal of our civil justice system, i.e., to promote discussion among disputants, such that parties can arrive at monetary settlement without resorting to court trials? If so, don’t damage caps unduly interfere with our judicial system that is designed to put disputants in the position of independently driving negotiations, rather than relying on jurors, judges and magistrates?
What would be the ideal compromise that fairly compensates injured patients, excludes frivolous claims and allows peace of mind necessary for the effective practice of medicine? Discuss with your colleagues at www.Ortho
Mind.com.
For more information:
- B. Sonny Bal, MD, JD, MBA, is an associate professor of hip and knee replacement in the department of orthopedic surgery, University of Missouri School of Medicine.
- Lawrence H. Brenner, JD, is on the faculties of orthopedics at Yale University and the University of Southern California, and practices in Chapel Hill, N.C. Address all correspondence to Brenner at lb@lawrencebrennerlaw.com.