Some Large Verdicts in Medical Malpractice Lawsuits Significantly Reduced Through Settlements
While "headline-grabbing," multimillion-dollar medical malpractice verdicts "have become an important rallying cry" for tort reform advocates, such awards often are reduced through settlements, the Wall Street Journal reports. According to the Journal, "[m]any plaintiffs settle for less than a jury's verdict to eliminate delays and the uncertainty of appeal" by making such deals as "high low" agreements, under which attorneys agree upon a range for a payout before a jury reaches a decision.
According to a study of malpractice awards in the nation's 75 largest counties in 2001 by the Department of Justice, plaintiffs in malpractice cases won only about 27% of the time. In addition, a Duke University study of 105 New York City area malpractice cases from 1985 to 1997 found that large malpractice awards typically are reduced to between 5% and 10% of the jury award. The Duke study also found that a total of 44% of jury awards were reduced after the verdict to, on average, 62% of the original amount.
Neil Vidmar, a Duke law professor who led the study, said the estimates on reductions are "very conservative" because the time period examined in the study is relatively short. "The whopping big ones really get knocked down, and they get knocked down incredibly," Vidmar said.
Insurers, medical providers and other tort reform advocates say that even if big jury awards are never paid out, they create benchmarks that raise the costs of future settlements, according to the Journal.
In October, the Coalition for Affordable and Reliable Health Care, which is an advocate of tort reform, cited in a news release a $269 million malpractice verdict in Texas. The award ultimately was reduced to $3 million as a result of a pre-verdict settlement, but CARH Executive Director Jan May said the new settlement figure had "absolutely" no effect on her organization's views. May noted that the 2000 case prompted local hospitals to set aside larger litigation reserves, as well as spurred the formation of her group.
Lawrence Smarr, president of the Physician Insurers Association of America, said, "The verdict amount for a given case sets the bar for the value of that type of case during future settlement negotiations on similar cases."
President Bush also often cites what he has called "startling" malpractice awards in his speeches supporting tort reform, the Journal reports. White House spokesperson Trent Duffy said, "There are instances across the country ... where the insurance premiums are really driving caregivers out of business and out of states," adding, "And that's why the president feels it's very critical for the improvement of our health care system and our economy that we address medical liability reform" (Hallinan, Wall Street Journal, 11/30).