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A "business judgment" rule for medical malpractice?



In yesterday's post, I hinted at as-yet unfinished work I'm doing questioning the very premises of medical malpractice liability when I asked why courts don't abstain from questioning medical judgment the same way they question business judgment or legal judgment. Peter Nordberg wasted no time in composing a long, thoughtful post on the potential problems from such a rule, though he graciously acknowledges that my post was "meant to spark thought, not to provide a finished solution." (A commenter is considerably less polite.) So let's discuss further, if not completely. We'll start with an aspect of my post that Nordberg did not respond to: the difference between legal malpractice and medical malpractice.

In a medical malpractice case, a patient suffers an adverse result; investigation finds evidence, in hindsight, of an alleged medical error but for which results would be dramatically different; experts testify whether the treatment provided adhered to a standard of care and whether the failure to provide that treatment caused injury; a lay jury evaluates that testimony and decides whether there is compensation.

The fascinating thing is that lawyers are never subject to that level of second-guessing. In any given litigation, one or both sides to the dispute ends up with less than an optimal result. In any given litigation, both sides' litigation decisions can be second-guessed. Yet, even with hundreds of millions of dollars at stake, one almost never sees legal malpractice claims in a lost or settled case: no client protests that a deponent could have been prepared better; that a cross-examination should have been more (or less) aggressive; that the attorney's brief-writing failed to present arguments as clearly as it could have; that an opening or closing argument was too dry for the jury; that a settlement failed to extract the maximum possible value; that the law firm's failure to have a client's discovery ready when it filed a suit in a rocket docket alienated a judge that then made adverse rulings. And, unlike a complex surgery, there's a court record of just about all of these things to precisely focus such second-guessing.

Yet just about the only time there is second guessing is when an insurance company refuses to settle for the policy limits, and is sued for "bad faith" if the resulting verdict is above those limits—a fact that plaintiffs regularly exploit. But even that second-guessing is more about risk aversion than about failure to achieve optimal results, and it's aimed at insurers, rather than insurance lawyers. Countless commentators criticized the losing attorneys on both sides for supposed tactical misjudgments and performance failures in the first two Vioxx trials, but I saw no coverage of anyone suggesting the losing party had a malpractice claim. Indeed, when Morgan Stanley claimed that it would sue its lawyers over a discovery snafu, it made national news and prompted a lengthy American Lawyer story, though no malpractice litigation has actually been filed. (Irrelevant disclosure: I worked for Donald Kempf on a number of cases when I was at Kirkland & Ellis.)

Why is this? A cynic might suggest that clients never learn that they're a victim of legal malpractice, but there's nothing stopping entrepreneurial attorneys from advertising "Did you lose a lawsuit?" just as they advertise for auto accident victims. Simply put, the standard of care for legal professionals has been designed to give those professionals a great deal of discretion in how they try cases, and that adverse results don't necessarily mean that there has been a breach of duty. And even for the cases involving litigation, courts require be a litigation within the litigation showing that the malpractice plaintiff had a winnable case (and putting the attorney in the awkward position of having to argue against the very matters he or she argued for in the contested trial).

Compare the New Jersey jury instructions for legal malpractice ("If, in fact, in the exercise of his/her judgment, an attorney selects one of two or more courses of action, each of which in the circumstances has substantial support as proper practice by the legal profession, he/she cannot be found guilty of malpractice if the course chosen produces a poor result.") with those for the exercise of judgment in medical malpractice cases, and, importantly, the notes that explore the ease with which the instruction is cabined (or barred) in medical malpractice cases compared to the breadth of what is considered "judgment" in a legal malpractice case. Lawyers usually get a benefit of the doubt that doctors do not, which keeps legal malpractice cases from getting to the jury, when medical malpractice cases would go forward. (Kentucky may seem to be an exception, but close reading of Equitania Ins. Co. v. Slone & Garrett, P.S.C. shows otherwise.) In the words of the California Supreme Court, an attorney is "confronted with legitimate but competing considerations, and we have recently recognized a latitude granted the attorney engaged in litigation in choosing between alternative tactical strategies." Kirsch v. Duryea 578 P.2d 935 (Cal. 1978).

Lawyers sometimes get an even larger benefit of the doubt when sponge-left-in-the-patient caliber mistakes are made, such as the case of Lucas v. Hamm, 364 P.2d 685 (Cal. 1961), where the failure of a will-drafting attorney to navigate the Rule Against Perpetuities was outside the scope of the duty of care as a matter of law. California legal malpractice claims take many issues outside the province of the jury hearing a battle of the experts without anyone suggesting Seventh Amendment problems. Most legal malpractice cases involve fairly blatant ethical violations or the failure to file paperwork in a timely fashion, rather than the sort of kibitzing we see in ob-gyn cerebral palsy cases.

What justification for the difference? It's heartening to see lawyers who otherwise support expansion of the tort system acknowledge the disincentives potentially created by fear of liability or the problems of lay jurors exploring arcane topics guided only by a cacophony of experts-for-hire. It's entertaining to see a court rediscover and strictly enforce the concept of proximate cause in a legal malpractice case. If only these factors were more recognized in other matters of liability.

Perhaps the answer is that we have too narrow a view of what constitutes legal malpractice, and that every private litigation should give rise to one or more putative claims of legal malpractice. But it's hard to imagine lawyers willingly exposing themselves to the same sorts of litigation risks that doctors face. At which point the question becomes why the protections lawyers merit shouldn't be equally applicable to doctors. Amputating the wrong leg? Malpractice. Failing to follow standard anesthesiology guidelines? Malpractice. Disagreement between experts over whether it's appropriate to prescribe tissue plasminogen activator for a pediatric blood clot? Sounds like a good place for courts to butt out.

 

 


Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.