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September 24, 2004

Reducing Frivolous Suits

By Ron Chusid

Reducing the risk of a physician facing a frivolous suit is a major advantage which Kerry's malpractice proposal has over George Bush's. I understand that Ted has some objections to the use of this word, but we have become bogged down in minutiae since my post of two days ago, and, being the end of the week, I think we need to stick with the main issues. I'm sure readers are more interested in determining which candidate's proposals will do the most to resolve the malpractice situation as opposed to seeing a debate over definitions. As both sides use this term and claim to desire to reduce frivolous suits, I think use of the word remains fair. Doctors don't care whether an unfair suit against them is technically frivolous. We are more concerned with reducing the risks of such suits.

A major difference between Kerry's plan and Bush's plan is that John Kerry's plan directly addresses the problem of frivolous suits in more than one way, while Bush's plan hopes to reduce frivolous suits indirectly and even backwards. Rather than dealing directly with frivolous suits (where generally there is not a victory for the plaintiff), caps affect suits where the plaintiff has won, which are less likely to be frivolous. Under George Bush's plan, we must hope that the prospect of collecting the attorney's share of economic damages plus a potential $250,000 would be insufficient for attorneys to take malpractice cases. This is quite a lot to hope for. Even if less potential return is enough to prevent some lawyers from taking a case, there will most likely be others who are interested. Many take suits where the award is well under this amount. Considering that less than two percent of suits wind up in an award to the plaintiff, such economic factors do not appear likely to keep attorneys from accepting cases where there is a cap on non-economic damages.

For many professions, going to court is an every day aspect of doing business. The medical profession does not see it this way. The doctors in the 98% of cases who wind up victorious would still see having been sued as a problem, and would still hope for changes to avoid being sued at all. A doctor who is sued would certainly prefer to win, and if they were to lose would prefer a smaller award against them as opposed to a larger one, but the primary motivating factor for physicians is to avoid being sued, period.

Under John Kerry's plan, pre-trial review would be necessary to ensure that a suit is valid. This would be the first step in weeding out the frivolous cases. Many states have shown success in reducing suits using a variety of types of reviews. Ted brought up (in an article linked to his entry) a case where a physician was successfully sued despite following current standards of care. Review by medical experts might have thrown out such a suit before an attorney would have had the opportunity to persuade a jury on more emotional grounds. There is no reason to believe that George Bush's proposals would have prevented such a suit from being filed. (As a comment on this suit, it appears that the jury misunderstood the meaning of evidence based evidence, being led to believe it is a scheme to lower costs rather than to provide high quality care based upon the best medical information available. This was an isolated case which cannot be the basis for devising a solution to the malpractice problem).

Personally I saw that pre-trial review is successful when a patient once tried to file a suit against me. The patient was suing based upon problems which arose from chronic medical problems over a year after I last saw him, with no plausible connection between my care and the problems he faced. I received a notice of intent to sue but, due to lack of evidence of having a valid claim, the patient could not proceed to filing suit.

To an attorney it might seem to be a trivial difference between having a suit dropped in such pre-trial review and of having a suit dropped after filing suit. To a physician this is a big difference. As the patient could not file suit, the pre-trial phase took little of my time. I did not face the mental anguish or stigma which is faced by physicians who are actually sued. Nor do I have to write an explanation for why I was sued every time I apply for hospital or HMO privileges. This undoubtedly was also a lot less expensive for the insurance company than if they had to defend a formal suit. They did not have the costs of numerous depositions, expert witnesses, and of a trial.

As physicians have a strong aversion to being sued, the high prospect of winning a suit does not inhibit physicians from practicing defensive medicine. Similarly, the knowledge that there is a limit on loses for non-economic damages would not be enough to a physician to refrain from practicing defensive medicine. However, a physician might feel safer knowing that if someone attempted to sue, they first had to present evidence of the validity of their claim.

One common fear of physicians is of the type of attorney, which every town seems to have, who will file a suit at the drop of a hat. They likely advertise on television, and seek out numerous cases in the hopes that they will get lucky with some of the cases brought to them. Perhaps some will settle to avoid going to court and they will make a quick profit. Caps would have no influence in such situations, but having to prove the validity of a case in pre-trial review would offer real protection.

No system is perfect, and pre-trial review will not weed out all frivolous cases. Kerry and Edwards have made proposals to account for this eventuality. They would allow for sanctions against plaintiffs and attorneys who file frivolous suits, including a "three strikes and you're out" rule to prevent attorneys who have filed repeated frivolous suits from filing suits for ten years.

Pre-trial review and sanctions against those who file frivolous suits directly address the problem, while George Bush's proposals do not. Kerry and Edwards seek to resolve the malpractice problem with a variety of pragmatic measures which directly address specific problems, rather than hoping that indirect measures will result in the desired goal. I have already discussed the problem of hospital deaths and injuries due to systems problems in medical facilities. Systems errors can lead to suits against physicians for reasons beyond their control. Kerry and Edwards have recommended working to reduce these types of errors, which would also reduce the risk of suits.

In addition to these measures, Kerry would also eliminate most punitive awards. They would change laws which give the insurance industry exemptions from ant-trust laws which allow them to limit competition and to set artificially high rates. Perhaps this is why the insurance industry is so strongly supporting George Bush. John Kerry has already stated he is willing to offend trial lawyers if necessary for his plan to work, but George Bush shows no sign of standing up to the insurance companies.

John Kerry's goal is to pragmatically look at the situation and then fix the problems caused by malpractice. We don't have to hope that caps will indirectly result in the desired goal. John Kerry has indicated a desire to resolve the malpractice crisis, and is willing to take additional action if his solutions do not solve specific problems. I have already discussed a variety of proposals, including pre-trial review and sanctions against those who file frivolous claims. If there are problems which are not addressed by these proposals, the Democrats have expressed a willingness to consider other solutions, such as tax credits to compensate physicians who have excessive increases in malpractice premiums. This would both help the affected physician directly, and reduce the risk of physicians leaving a particular specialty or location due to the cost of malpractice insurance.

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Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.