By:  Madeleine Weldon-Linne

Fewer than 5% of medical malpractice lawsuits go to trial. Some are dismissed for a variety of reasons without any remuneration to the patient. In reality, most medical malpractice lawsuits are settled out of court, with payment made to the patient. The physician-defendant needs to confront settlement issues and understand the settlement process to make a careful decision.

This article's purpose is not to encourage physicians to settle malpractice claims. Its purpose is to explain the process of settlement and the factors affecting the decision to settle. That way, when the issue is raised during a lawsuit, the physician can make an informed decision.

The decision to settle

First, determine whether your medical malpractice liability insurance policy gives you the right to consent or refuse to settle a malpractice lawsuit. If you retain the right to make that decision, consider it carefully. You may be asked to decide early in the case. If you refuse to settle initially, you may be asked to reconsider your decision later in the discovery phase and again at the time of trial. Each time, the relevant facts should be reviewed with your attorney because they may have changed.

If you decide to settle, the settlement amount, if below your policy limit, is usually not within your right to dictate. Logically, if you agree to settle, you should be prepared to settle between $1 and your policy limit. Do not hedge your decision by placing an arbitrary ceiling on the settlement amount. This limit will hinder decision making.

Logically consider all relevant facts and discuss each fact with your attorney. The eight points listed are not exhaustive but may serve as general parameters when making your decision.

1. The facts of your treatment.  The documentation of your treatment and the necessary evidence to support your actions will be presented to the jury in your defense. Can your appropriate treatment be proven with admissible evidence? Whether you acted within the required standard of care is an issue that you and your attorney will assess, evaluate, and reevaluate throughout the discovery phase of the trial.

2.   Your role relative to other defendants. If other physicians, health professionals, or health-care institutions are named as codefendants, carefully consider relative roles as defendants. Are your defenses compatible? Do the defendants present a united front? Conversely, will the other defendants point to your treatment of the patient as beneath the standard of care? Or, in the course of your defense, will you focus on other physicians or institutions as the cause of the plaintiff's condition? To be the only defendant remaining on trial when all other codefendants have settled will put you in an unpredictable and explosive position. Remember, the other treating physicians will probably be called to testify at trial and the jury will wonder why you are a lone defendant.

3.   Your ability as a witness. Honest assessment of your own image is difficult. Be candid with your attorney and ask whether you appear arrogant, defensive, or misinformed at your deposition. Was your testimony confused or disorganized? Ask your attorney to evaluate whether you appeared logical, compassionate, and willing to listen. Will the jury respect and believe you at trial?

4.  The expert testimony. My experience at trial has been that the jury realizes both sides hire experts. The jury understands this and is hardly affected. Instead, the jury pays attention to an expert's demeanor and ability to convey what happened and to explain the physician's treatment. You're crucial in helping evaluate the credentials of the plaintiff's expert and the criticism against you. Evaluate the plaintiff's expert with your attorney. On the other hand, be detached and evaluate your own expert's testimony. Is it consistent with your testimony? Will the jury believe the plaintiff's expert or your expert?

5. Sympathy for the plaintiff.  Compassion separates humans from the beast. The jury will feel compassion and sympathy for the child who will never talk, walk, or have an intellectual experience. The jury will feel sympathy for the young quadriplegic or the person who suffers chronic pain. This sympathy arises irrespective of the physician's involvement. The jury will be instructed by the judge to disregard sympathy and award damages based on the law of negligence. In some cases it may be impossible to expect a jury to turn away a patient who invokes sympathy, without any compensation, regardless of the strength of the defense.

6. Consequences of the trial.  You must carefully consider the cost of the trial in terms of the time away from your practice. A trial may take weeks or months.  Can you afford to be away from your practice for an extended period of time?  Your presence is required for many days, if not every day of the trial. Further, an explanation will need to be proffered to your patients.  This can be awkward. 

There will be emotional costs as well. A confrontation takes place daily in the courtroom.  Formerly your patient, the plaintiff, is now your adversary.  The jury evaluates you and your abilities as a physician. 

There may be some publicity with regard to the trial.  Consider carefully these hidden costs of the defense.

7.  Excess verdict possibility.  In some serious cases, the verdicts awarded by juries have been higher than the limits of the professional liability policy.  Your attorney will be able to access if your case has an excess verdict possibility. for example, if the jury awards a verdict of $3 million and your policy limit is $1 million, your personal assets and future earnings may be at risk. 

You need to consider this possibility.  You should evaluate whether you want to risk the possibility of a verdict in excess of your policy.  If the plaintiff's attorney is willing to settle the case within your policy limit, you need to evaluate whether you should consent to settle.

The law in this area relating to "bad faith" is complicated.  Simply stated, it allows a remedy to the insured who consented to settle within the policy limits, but for whom the insured did not provide the funds to execute the settlement.  If you do not consent to settle, the bad-faith remedy is not available to you should a verdict in excess of your policy limits be reached.  Discuss this in detail with your attorney.

Finally, if an excess judgment is entered against you, legal procedures exist to clear that judgment. These procedures could take years.  An outstanding judgment will have serious implications to your personal financial status. 

8.  Reporting requirements.  Reporting requirements and potential disciplinary effects of settlement exist in Illinois.  The Medical Practice Act of l987 requires the professional liability insurance carrier, and others who indemnify physicians for professional liability, to report to the Illinois Department of Regulation any final judgment or settlement of negligence claim favoring the claimant. 

The act also provides that disciplinary sanctions can be imposed against a physician by the Department of Professional Regulation in the case of gross negligence, incompetence, or abandonment.  This information is confidential and is used by the department to open investigations of physicians in certain cases. 

After settlement, you will receive a form from the board or your insurer regarding the cause of action with instructions regarding reporting requirements.

The settlement of a malpractice action is not a surrender by the physician.  It is a compromise.  Not every physician-defendant  can justify, articulate,  and substantiate with admissible evidence all aspects of patient care.  If the defendant-physician is able to present convincing evidence through testimony and clear medical records, a trial should be the vehicle of defense.

Communication with your attorney is the key in making an informed choice with regard to settlement.  Evaluating the factors is a joint process.  Once all the factors have been evaluated, an informed decision can be made as to whether you should consider settlement of the lawsuit.

Copyright l991, Chicago Medicine,  Reprinted with Permission.