A medical liability litigation industrial complex manipulates medical liability litigation with three talking points. As a result, 85,000 lawsuits are filed per year. Of these, 56,000 are summarily dropped; 28,000 are settled; 300 are plaintiff verdicts, and 700 are defense verdicts. The cost of health care is $60 billion per year, and the medical liability litigation industrial complex takes a chunk of the action. There is considerable uncertainty. Facilities close because of it. Medical care is denied or curtailed.
Uncertainty results because only 28,300, or one-third of all filed lawsuits—specifically plaintiff verdicts and settlements—are meritorious, while two-thirds, or 56,600, are frivolous. There are twice the number of frivolous lawsuits as meritorious ones. This is upside down. Lawsuits are not supposed to be frivolous. This presupposes that when evidence is systematically examined in the context of “preponderance of evidence,” which uses a level of confidence of 51 percent, it can justify a departure from standards of care and proximate cause in only one-third of cases filed. Because a level of confidence of 51 percent is a low bar, there may be 56,600 people whose claims may, in fact, be meritorious. There may be a built-in miscarriage of justice.
To make matters worse, there may be more cases, a total of 3.15 million. For every 37 cases crossing a lawyer’s desk, 36 are summarily rejected. This is 3.15 million cases, of which only 85,000 are represented. As many as 3.07 million cases never see the light of day for reasons known only by the attorney. This begs the question: what is going on here? Talking points are the answer.
One is “complications.” Not every complication is medical malpractice. Medical errors are. Errors of nature are not. Complications are inevitable, and so are the lawsuits they precipitate when patients suspect medical negligence. If a patient elects to proceed with an error of nature, the lawsuit has no merit; it is frivolous.
“Preponderance of evidence” is another. It is a legal standard. However, “the scientific method” is a medical standard, which has a level of confidence of 95 percent. This raises the bar. Because this is medical malpractice, using the scientific method is a more appropriate way to validate merit. This is how physicians measure clinical results almost every day.
Another is “free consultation.” We all see commercials for personal injury attorneys advertising free consultations: “If we don’t win, you don’t pay.” This seduces a suspicious party who does not know the difference between a medical error and an error of nature.
Lawyers have every right to offer a contingency fee. However, contingency fees apply to a verdict or a settlement at the end. A consultation applies to the merits of a case from the beginning. The “American Rule” establishes that every party to a lawsuit pays their own legal expenses. Rather than a free consultation, payment of legal costs for an initial consultation seems more appropriate.
There are legal expenses that go uncompensated and are regarded as a “value-added cost.” Although plaintiff attorneys claim they never represent frivolous lawsuits, they would not know merit if it bit them. They need subject-matter experts with expertise in medicine, such as nurses or physician assistants, who screen the cases to represent. However, when two-thirds of 85,000 represented cases are without merit, this is hardly success. “Free consultation” may have value for the plaintiff attorney, but there is no value added for the client.
Once selected for representation, the plaintiff attorney files the complaint in court. To certify the lawsuit, a qualified medical expert, who is a physician—usually in the same specialty as the defendant—is necessary to prepare a certificate of merit to justify merit. The attorney can file the lawsuit even before submitting the certificate of merit when granted a 30- to 60-day extension.
So much for the plaintiff attorney’s claim of never representing a frivolous lawsuit. They do so all the time. Actions speak louder than words.
The last talking point is “the goose that lays the golden egg.” For the plaintiff attorney, the doctor is the “goose that lays the golden egg.” Plaintiff attorneys profit. Every settlement has a 40 percent contingency fee. The average settlement is $300,000. The average verdict is $1 million, and the contingency fee is 30 percent.
However, the doctor is not the goose that lays the golden egg only for plaintiff attorneys. This applies to the entire medical liability litigation industrial complex. For every doctor, clients profit from settlements and judgments; malpractice carriers from premiums; defense attorneys from billable hours; and medical experts from representation. There are others.
Of these three talking points, “free consultation” is the most influential. Its purpose is to establish that the doctor is the goose that lays the golden egg for the client as well. Otherwise, a client will have second thoughts about the medical error/error-of-nature interaction. Clients should be responsible for payment. Payments are disincentives for frivolous lawsuits. This is the purpose of the American Rule.
If the American Rule supplants free consultations, there is better case selection. Many claimants will be disincentivized, and the number of cases achieves equilibrium. Even if there are 3.15 million cases, 1.05 million—33 percent, all meritorious—are represented. Correspondingly, 2.05 million—66.6 percent, all frivolous—are not.
Although the frequency of lawsuits increases by 130 percent, the cost of health care increases by only 30 percent, to $78 billion. However, there is greater certainty. Medical services remain available. Meritorious lawsuits are expediently settled and fairly adjudicated. Non-meritorious ones are either not represented or dismissed with prejudice. Legal transaction costs proportionately decrease. Malpractice attorneys are more productive. Malpractice premiums decrease or remain the same. Carriers are more profitable. Doctors are sued more often, but they are no longer “the goose that lays the golden egg.” The medical liability litigation industrial complex is dismantled.
Likewise, if the scientific method supplants preponderance of evidence, things improve correspondingly.
Howard Smith is an obstetrics-gynecology physician.
