Posted by Bill Sandweg on 22 January 2014.
I received a recent comment from a reader who asked why, if the lawyers weren’t greedy, no one would take his six figure medical malpractice case. The lawyers whom he consulted apparently told him that his case wasn’t big enough. I wrote him back about the economics involved in these cases and it occurred to me that this might be a good time to write about these factors in our blog.
The deck has been stacked against patients who are injured by medical negligence. The doctors, hospitals, and insurance companies have convinced the public that doctors are being driven out of business by frivolous malpractice suits and that medical bills are being pushed up by the cost of frivolous malpractice suits. Neither of these things is true. Every study ever done has consistently shown that the cost of malpractice suits is no more than 1/2 of 1% of the annual medical spending in this country. Furthermore, for the reasons I will discuss below, no lawyer can afford to bring a suit which is frivolous without running the risk of unsustainable financial losses. The suits that are brought are almost all meritorious. Even the prestigious New England Journal of Medicine has done a study which reached that conclusion. Despite the fact that these things are not true, the public, from which juries are drawn, believes them to be true and jurors are therefore very reluctant to find against health care providers at trial.
Not only has the jury pool been persuaded that medical malpractice cases are almost all frivolous, the Arizona Legislature has enacted many laws which it freely admits are intended to make it harder for injured patients to successfully recover against their health care providers. Many special rules apply only to medical malpractice cases. Of course, the legislators defend this on the grounds that these limitations are necessary to curb frivolous suits. As a result, lawyers who know what they are doing in medical malpractice cases are taking and filing fewer cases.
So why do I say these suits are not frivolous? Why won’t lawyers take smaller cases in which the patient was clearly injured by the negligence of a health care provider? Here are the reasons:
1) Because of current juror attitudes, it is very difficult to get a favorable verdict unless the injury is a bad one and the jury believes the patient will need their help going forward with his or her life.
2) Health care providers and their insurers fight these cases tooth and nail. This means many depositions will be taken. There will be substantial travel expenses to go to the cities where the expert witnesses reside.
3) The cases require numerous expert witnesses on both sides, who usually charge in excess of $500 per hour to consult with the attorneys and to testify at deposition and at trial.
4) It is almost impossible to get an Arizona doctor to testify that another Arizona doctor committed medical malpractice. Attorneys representing patients must therefore go out of state to find witnesses willing to testify. This increases cost of consulting with an expert and also increases the cost of bringing the expert to court to testify in the event the case proceeds to trial.
5) Almost all doctor insurance policies give the doctor the right to veto settlement of the case by the insurance company. Because settlements result in reports to the Arizona Medical Board and to the National Practitioners’ Data Bank, and because juries treat doctors quite favorably at trial, doctors are very reluctant to approve an out-of-court settlement. Without doctor consent to settlement, the case is forced to trial.
6) Lawyers representing patients must pay experts to consult with them about whether there was negligence and, if negligence was found, they must usually consult with additional experts about whether the negligence caused the injury. They often also need experts to testify about the cost of future care and experts to testify about the effect of the injury on the patient’s ability to earn income in the future. Depending on the number of defendants in a case and whether the case goes to trial or not, these out-of-pocket payments by the lawyer may run from $50,000.00 to well over $100,000.00. I know one lawyer who incurred over $1,000,000.00 in costs on a single case. Most lawyers will not ask the client to repay them in the event the suit is not successful. If the suit is successful, the client must repay the attorney for these costs. The reimbursement for the costs the lawyer has paid is in addition to the attorney’s fee for the lawyer’s time spent on the case.
7) Medical malpractice cases are time consuming. Lawyers will usually spend a minimum of $100,000 in legal time to investigate, prosecute and try a medical malpractice case. Sometimes it is many times that amount. The lawyer is typically paid for his or her time out of any recovery made for the client. The usual fee is 40% of any recovery made.
8) In the event the case proceeds to trial and the patient loses, the court will enter a judgment against the patient for the “taxable costs” of the defendants. These “cost judgments” will usually be around $15,000.00 to $20,000.00 for each defendant. Clearly, there is a substantial financial risk to the client if a case goes to trial.
From all of the foregoing, I hope it is clear that these cases are complex, time-consuming, and hard to win. Every time a lawyer takes a case, he or she is committing to invest many hundreds of thousands of dollars in actual money spent and time spent on the case. It is important for both the lawyer and the client that the lawyer be able to evaluate the merits of a possible case and decide whether it makes economic sense to go forward. The client will not be happy, and understandably so, if the lawyer takes a case which, even if successful, results in a recovery in which the lawyer gets paid but the client gets very little after the attorney’s fees and costs are deducted. I am not doing my clients any service if I take a case which is not likely to be won at trial or one which, if successful, will pay me but not the client.
It is unfortunate that the deck is stacked against patients. Patients who are injured by medical negligence should be fairly compensated for their injuries without having to jump through a hundred hoops and wait two or three years to make a recovery. It is up to you whether you let this state of affairs continue or whether you do something about it. If you wait until you or a family member are injured, it will be too late to change the system. In any event, don’t blame the attorneys who are forced to work in the system for not being able to take cases which are not economically viable.
