ARE WE AFRAID TO TAKE CASES TO TRIAL?
John E. Hall, Jr.
5 Common Myths of Medical Malpractice Trials and Why More Cases Should Be Tried
Lauren V. Spears
Hall Booth Smith, P.C.
Few things strike more fear into medical liability insurers than the prospect of taking a malpractice claim to trial. After all, it seems that a day rarely goes by without media coverage of another multi-million dollar jury award to a plaintiff patient. But perception is not all that it seems. In fact, according to the PIAA, insurers prevail in 91% of the medical negligence claims that received a verdict between 2003 and 2012. Yet, still, only 8% of claims make it to the verdict stage of trial.
Why? Because almost all cases that are not dropped, withdrawn, or dismissed end in a plaintiff settlement. While there are certainly cases where settlement is a good deal for defendants - those cases where liability is indisputable - there also are cases where liability is more uncertain and settlement is sought nonetheless, which brings us back to fear.
The fear of trial stems from fear of uncertainty. Uncertainty lies with concerns regarding jurors and experts, awards and costs, which creates voids that are filled with perceptions of worst-case scenarios. Most common is the perception that jurors are sympathetic to plaintiffs to the detriment of insurers, that they do not understand the science, and that they are downright unpredictable. There is also the perception that it costs too much to try a case and the result, if for the plaintiff, will likely be an astronomical award. But these perceptions are built upon myths that can be dispelled by data, and we argue that once they are put to bed, insurers can take advantage of the 91% success rate of trials to bring more cases before juries and reduce overall indemnity at the same time.
Myth #1: Juries are sympathetic to plaintiffs to the detriment of defendants.
Insurers and defendant physicians may be hesitant to take a medical malpractice case to trial because of the fear that jurors will be swayed by a sympathetic, injured plaintiff and perceive the defendant physician or hospital as an evildoer with deep pockets. However, empirical research data contradicts this idea.
One study by the U.S. Bureau of Justice Statistics estimated that, in 2001, there were over 1100 medical malpractice cases tried before juries in the 75 largest counties in the United States.1 Of these jury trials, plaintiffs won only 27% of cases.2 Research also suggests that physicians win 80%-90% of jury trials with weak evidence of negligence, about 70% of cases with no strong evidence of negligence nor strong evidence of non-negligence, and 50% of cases where there is strong evidence of medical negligence.3 So, even when it is fairly evident that the defendant physician was negligent in some way, juries still side with defendants half of the time.
These figures show that juries do not make their decisions based solely on their emotional attachment to an injured plaintiff. In fact, a series of interviews with jurors from North Carolina revealed that jurors "describe their attitudes along two main themes: too many people want to get something for nothing; and most doctors try to help people and should not be blamed for simple human misjudgment or a momentary lapse of concentration."4 Furthermore, other interviews of jurors conducted by Hans and Lofquist revealed that "jurors often penalize plaintiffs who [do] not meet high standards of credibility and behavior, including those who [do] not appear as injured as they claimed, those with preexisting medical conditions, and those who [do] not do enough to help themselves recover from their injuries."5
Furthermore, evidence does not support the idea that jurors render verdicts for plaintiffs and against doctors or hospitals simply because they perceive the doctor or hospital as having the "deep pockets" to pay awards. In a study conducted by Vidmar, 147 people called for jury duty were asked to award damages for pain and suffering in a case where the plaintiff suffered a broken leg as a result of complications.6 For one set of jurors the cause was described as medical negligence, but for the other jurors the cause was described as a car accident.7 When comparing the awards from each set of jurors, there was no statistically significant difference.8
Based on the foregoing research, it is clear that jurors are fairly skeptical of personal injury claims in general, and are not likely to be influenced simply because a plaintiff appears sympathetic. Furthermore, juries are not likely to grant a plaintiff a large award simply because they believe that the hospital or doctor can afford to pay the damages.
Myth #2: Juries do not understand the science, so they side with plaintiffs and the guidance of their likeable experts.
One common criticism of juries is that, because they are made up of laymen, the members are not always sophisticated enough to understand the science presented by medical experts in medical malpractice cases. Supposedly, this leads jurors to simply side with the party with the most likeable expert, rather than scrutinizing and analyzing the information presented to them. This in turn leads to fear of taking a case to trial, particularly cases involving very complex medicine. However, multiple studies have revealed data that contradict this view.
One study by Taragin et al. used data from closed claim files of a medical liability insurer.9 Medical doctors examined these files and developed opinions on whether or not negligence had occurred. These opinions were then compared to jury verdicts when the case went to trial. In these cases, jury verdicts were very consistent with medical judgments and were not related to the severity of the injury suffered by the plaintiff.10 This suggests that, even if a medical malpractice case involves complex medical terminology or concepts, juries can comprehend the issues, and even draw the same conclusions medical doctors would make on liability.
Further, research suggests that juries do not simply listen to expert witnesses and blindly follow their guidance. A study by the Arizona Jury Study Project involved the study of 50 civil juries in Arizona, including examination of questions jurors asked of experts and videotapes of jury room deliberations.11 Results of this study revealed that, when given the opportunity, jurors ask incredibly thoughtful and intelligent questions of expert witnesses and are vigorous in their deliberations. Overall, "juries are anything but passive participants who simply defer to experts or just superficially gloss over the standard of care."12 Another study by Schuman et al. required interviews of jurors following expert testimony in medical malpractice trials. These researchers concluded that there was no "white coat syndrome" in which "jurors mechanistically deferred to certain experts because of their field of expertise. Instead, [they] found jurors far more skeptical and demanding in their assessments."13
These studies tend to disprove the myth that jurors will blindly follow whatever an expert witness says at trial, or that jurors are incapable of understanding complex and technical information presented during the course of medical malpractice trials.
Myth #3: Jury awards are unpredictable.
Another reason insurers and defendant doctors may choose to settle a case, rather than take it to a trial, is because juries are perceived as unpredictable. When entering into a settlement, defendants likely take comfort in the fact that they know exactly how much they will have to pay, rather than rolling the dice and possibly having to pay out much more as a result of a jury trial. However, research suggests that jury awards are actually quite predictable, and that defense attorneys are the best at predicting what those awards will be.
Just like jury verdicts tend to be consistent with medical judgment, jury verdicts are also very consistent with the opinion of judges. Certain studies have asked judges to make independent decisions on liability prior to finding out how the jury decided.14 The findings from these studies revealed that there is a high degree of agreement between judges and juries on liability and, even when the judge disagreed with the jury decision, the judge usually noted that there was evidence such that a reasonable jury could decide for the other party.15
Furthermore, damages awards tend to correlate with severity of the injury. A study by Bovbjert et al. found that the magnitude of jury awards in medical malpractice cases positively correspond to severity of plaintiff's injuries, with the exception that injuries resulting in death were usually lower than awards for plaintiffs with severe and permanent injuries.16 Several other studies have found similar results, and there is no evidence that these jury verdicts were the result of anything other than the evidence presented at trial, such as jury sympathy.17
Research also suggests that defense counsel are able to predict whether any payment will be paid to the plaintiff by a physician, whether through settlement or as a result of a jury trial, better than plaintiff counsel or medical experts.
As this research shows, jury awards are not as unpredictable as many believe, and when ascertaining the potential range for the verdict, defense attorneys tend to be the most capable at making these predictions.
Myth #4: Taking a claim to trial costs more than settling.
The myths of medical malpractice trials are not just limited to issues with juries, though. When it comes down to the dollars and cents of taking a claim to trial versus settling with a plaintiff, a common perception is that it will always cost more to take a 50-50 claim to trial than to settle on the front end. This, too, is a myth.
Looking back to the data from PIAA's DSP of claims closed between 2008 and 2012, it is true that the average allocated loss adjustment expense (ALAE) was higher for claims that went to a verdict instead of settling.19 Insurers on average paid $67,242 to settle a claim and $136,396 when a claim resulted in a defense verdict.20 But while these raw ALAE figures seem to suggest it costs twice as much to close a claim through trial than through settlement, that conclusion is half-baked; it fails to take into account the indemnity that is paid in a settlement but not in a defense verdict. Average indemnity for the same period, according to DSP data, was $321,101, a figure that did not include the associated ALAE.21 Adding in average ALAE for settlement brings the average total cost of settling a claim to $786,056. The cost of achieving a defense verdict is far less than the average settlement cost.22 Combine this with the fact, as discussed before, that the defense wins 70% of 50-50 cases that go to a verdict,23 and the significant cost-savings remain even if the plaintiff wins 30% of verdicts and the insurer pays indemnity and higher ALAE in those cases.
Figure XX: Analysis of Cost to Close Claims, Settlement vs. Verdict24
Myth #5: Plaintiffs' verdicts result in bigger awards than settlements.
Of course, the primary attack on the reasoning above, that going to trial is cheaper even with 30% plaintiffs' verdicts, is that the argument is turned on its head by jury awards that far exceed settlement value. And while large jury awards make for splashy headlines, when actual settlements and verdicts are examined in the aggregate, the idea that jury awards are bigger on average turns out to be a myth, as well.
While the data is somewhat segmented, at least two studies suggest that plaintiffs' verdicts produce awards that are on par with settlement value and rarely the blockbuster amounts that attract popular attention. In one study, researchers examined 465 claims from a single hospital, 242 of which resulted in lawsuits.25 In assessing the claims, they coded incidents based on characteristics, like severity of injury and quality of care, and cataloged final dispositions, including settlement or verdict awards.26 Although the sample produced only a few plaintiffs' verdicts, the awards in those cases were generally comparable to the settlements in other cases with similar characteristics.27
Not only does data suggest that the settlement and verdict value has little variance, but other data suggest that big awards often attributed (incorrectly) to jury verdicts are more a product of settlement. In a study of all Florida closed medical malpractice claims between 1990 and 2004, researchers found that the vast majority of payments over $1 million were the product of settlement, not jury verdict.28 Of 801 cases with payments over $1 million, 747 cases were resolved before jury verdict.29 Even more notable, of the 801 cases over $1 million, only 34 involved "mega-awards" exceeding $5 million.30 And of those 34 cases, only two were decided by a jury.31 Although large payments are often thought of as a unique product of jury verdict, the Florida data indicate otherwise. Large payments come from high-value claims, and such payments are not the result a risk exclusively inherent to trials.
Even when verdicts lead to large judgments for plaintiffs, evidence suggests that the judgments rarely stick in the long run, either succumbing to post-verdict review or settlement.32 Faced with the potential that an award will be overturned by increasingly-active appellate courts or inability to collect all the award immediately, even winning plaintiffs often settle for less.33 Studies show that some large cases eventually settle for between 5% and 10% of the jury award, and generally, the higher the jury award, the greater the reduction in post-trial proceedings and settlement.34 So, even if a jury returns an outlier award, there is reason to believe that the award will ultimately be mitigated after the gavel falls.
Of course, there are some caveats to the suggestion that these myths should be dispelled and more medical malpractice cases should be taken to trial. First among these is the fact that it takes longer to resolve a claim when it is taken to trial. While the average resolution time for all claims between 2002 and 2005 was 19 months, the time required to resolve a claim through trial ranged between 39 and 43.5 months.35 Time is money, and the monetary (and intangible) costs of resolution certainly grow when the resolution time of a claim is almost doubled by taking it to trial. However, it would seem that the monetary cost is already taken into account in the foregoing analysis, which recognizes significant increases in ALAE for claims resolved at trial. Still, there are certainly intangible and business costs associated with maintaining ongoing litigation without certainty of exposure for the insurer.
Worth more attention, however, is the premise that the percentage of success in these cases will remain the same when more cases are taken to trial. This proposition is shaky, particularly since the additional claims that would be taken to trial are likely less favorable cases for the insurer with higher likelihoods of an adverse verdict. But even if this is the case, it is unlikely that a change in the rate of success in jury trials will be significant enough to change the overall conclusion.
The empirical data exists, and it shows that the fear of taking a case to trial based on common myths is not supported by the results of the data. It is impossible to know how many defense verdicts could have been achieved had these matters not been settled based on fears and myths. What we do knows is that these fears are myths, and trial should not be avoided simply because of a fear created out of myth.
1 Neil Vidmar, Juries and Medical Malpractice Claims: Empirical Facts versus Myth, 467 Clin. Orthop. Relat. Res. 367-375 (2009).
2 Id. at 368.
3 Philip G. Peters, Jr., Twenty Years of Evidence on the Outcomes of Malpractice Claims, 467 Clin. Ortho. Relat. Res. 352-357 (2009).
4 Juries and Medical Malpractice Claims at 369.
6 Id. at 371.
10 Neil Vidmar, Are Juries Competent to Decide Liability in Tort Cases Involving Scientific/Medical Issues? Some Data from Medical Malpractice, 43 Emory L. J. 885, 904 (1994).
11 Juries and Medical Malpractice Claims at 370.
13 Id. at 371.
14 Id. at 369.
16 Id. at 371.
18 Ralph Peeples, Catherine Harris & Thomas Metzloff, Settlement has many Faces: Physicians, Attorneys and Medical Malpractice, 41 J. Health & Soc. Behavior 333-346 (2000).
19 Aaron E. Carroll, Parul Divya Parikh, & Jennifer L. Buddenbaum, The Impact of Defense Expenses in Medical Malpractice Claims, 40 J. of Law, Med., & Ethics 135, 138 (2012).
21 Id. at 137.
22 While the average indemnity figure from the DSP is likely skewed upward slightly by outlier plaintiff verdicts (and, thus, inflating the average settlement cost used here), it is not likely that the bias is large enough to dissolve, or even seriously decrease, the cost advantage of achieving a defense verdict.
23 Philip G. Peters, Jr., Twenty Years of Evidence on the Outcomes of Malpractice Claims, 352 (2008)
24 Data: Id., Carroll supra note XX, at 137-38.
25 Henry S. Farber & Michelle J. White, A Comparison of Formal and Informal Dispute Resolution in Medical Malpractice, 23 J. of Legal Studies 777, 786 (1994).
26 Id. at 787.
27 Id. at 802-03.
28 Neil Vidmar, Juries and Medical Malpractice Claims, 368 (2009).
32 Id. at 373.
35 Anupam B. Jena, Amitabh Chandra, Darius Lakdawalla & Seth Seabury, Outcomes of Medical Malpractice Litigation Against US Physicians, 172 Arch Internal Med. 892, 892-93 (2012).