1. Lost in Litigation: The Surprising Frequency, Causes and Potential Cures for Dropped Medical Malpractice Claims By: Professor Dwight Golann Suffolk University Law School Copyright 2009 Dwight Golann

2. Most medical malpractice claims filed in Northeastern states are not paid Copyright 2009 Dwight Golann

3. National experience is similar Copyright 2009 Dwight Golann

4. Outcomes of Defendant Claims Closed in Mass. 2004 – 2008 Copyright 2009 Dwight Golann

5. What happened to claims not adjudicated or settled? Copyright 2009 Dwight Golann

6. What happens to unpaid claims? Abandoned (11%) : Plaintiff presents claim to an insurer, but later drops it without filing suit Dismissed (35%): Lawsuit is filed but claim is later dismissed, either by the plaintiff or by a court Allocated (12%): Plaintiff settles case against multiple defendants. Adjuster allocates settlement payment to one defendant and not another Adjudicated (14%): Plaintiff loses the claim at trial, arb, S.J. Abandoned or dismissed claims (45%) will be referred to as “dropped” claims Copyright 2009 Dwight Golann

7. Reasons claims closed without payment Copyright 2009 Dwight Golann

8. Thesis: Malpractice reform proposals focus on reducing payments for successful claims Half of all claims filed against medical defendants go nowhere, providing no advantage to either side More productive to focus on reducing dropped claims than penalizing valid ones Reducing wins v. losses to 1:1 would eliminate nearly half of all lawsuits filed against doctors in America, without affecting compensation to plaintiffs or their counsel Copyright 2009 Dwight Golann

9. Dropped claims are expensive Out-of-pocket costs linked to a specific claim (lawyer’s fees, expert fees, transcripts) are high – Defense costs in 2008 averaged more than $23,000 per dropped claim – Plaintiff lawyers do not track their costs Distraction and distress for patients and doctors Defensive medicine Copyright 2009 Dwight Golann

10. How serious is defensive medicine? No reliable data on how much unnecessary treatment is due to defensive medicine vs. monetary incentives, etc. Large money recoveries, though uncommon, also stimulate extra treatment And if a defendant pays on a claim, we probably want him to change his methods But if a doctor is sued and the claim dropped she is likely to think: “Good practice alone is not enough to protect me from junk claims; I need to paper the file.” Copyright 2009 Dwight Golann

11. Benefits to filing claims that are later dropped are hard to find Patients do not receive money or satisfaction Doctors do not get vindication Possible tactical benefits for plaintiff lawyers: – Induce finger-pointing among defendants – Get better discovery – Combine policies and increase insurer’s exposure – But lawyers say tactics are not a major cause of dropped claims Copyright 2009 Dwight Golann

12. Why do plaintiff lawyers bring dropped claims? One of several doctors erred, but it’s not clear which Unforeseen developments: – Misdiagnosed cancer patient recovers – Plaintiff makes a decision to move on with life – Patient worsens for reasons other than malpractice – Doctor explains gap in medical record Firms name defendants and let litigation sort them out Lawyers focus on damages and ignore causation Copyright 2009 Dwight Golann

13. Some lawyers drop fewer claims than others Specialist Firm Plaintiff Cases Defendant Cases A2 of 16 13 % 7 of 37 19% B5/25 20 12/57 21 C14/54 26 23/90 25 E 101/306 33 161/513 31 J22/42 52 31/67 46 ------------------------------------------------------------------------------ Law Offices of 50/92 54 73/144 51 ------------------------------------------------------------------------------- Pro Se plaintiffs156/205 76188/204 92

14. Why do some lawyers drop fewer claims? Better case selection – Better-known trainers get better horses – Higher-value cases support better preparation Incentives to avoid dropped claims are weak – Out-of-pocket cost to add extra defendant is low – Courts do not penalize dropped claims Referral sources value recoveries, not drop rates Attorneys underestimate their own frequency of dropped claims Copyright 2009 Dwight Golann

15. Which failed claims should we focus on? Pre-suit drops (11%) are inexpensive to defend ($820 apiece) and relatively short in duration (13 mos) Adjudicated losses (14%) are difficult to avoid because plaintiff lawyers see trials as important Allocated dismissals (12%) are discounted by plaintiff lawyers, but might be encouraged to happen sooner Dismissals during litigation (35%) are the clearest target – They cost roughly $25,000 apiece to defend and remain open for nearly 3 years – Plaintiff lawyers see little advantage in bringing them Copyright 2009 Dwight Golann

16. How to reduce dropped claims? Carrots: Insurers could – Assent to adding defendants later if needed – Provide quicker discovery – Implement aggressive settlement programs – Reward “good” firms by waiving formalities, etc. Sticks: – Publish comparative drop rates for specialist firms – Publicize doctors who certify dropped claims – Transfer some of the cost of dropped claims, e.g. defense expert fees, to the lawyers who file them Copyright 2009 Dwight Golann

17. Conclusions Malpractice “reform” proposals focus on reducing recoveries and fees for bringing valid claims But half of all claims filed against medical providers go nowhere, providing no advantage to either side More productive to focus on reducing failed claims than discouraging valid ones This would seriously reduce claims without impairing patient or attorney compensation And it is possible to do so Copyright 2009 Dwight Golann

20. “Defendant Claims” vs.“Patient Cases” Necessary to distinguish a “patient case” from a “defendant claim” – Patient case: A claim or suit by a plaintiff – Defendant claim: A claim/suit against an individual defendant In the average med mal case, the plaintiff sues two or more doctors, creating 1 “patient case” but 2+ “defendant claims” Example: The plaintiff sues two defendants and later dismisses one defendant and recovers money from the other – From a “patient case” viewpoint this is a 100% win – From a “defendant claim” viewpoint, only a 50% win Both are correct, but the resulting percentages are different Copyright 2009 Dwight Golann

21. Outcomes of 500 Patient Cases Closed in Mass. in 2008 Copyright 2009 Dwight Golann

22. “Claims, Errors, and Compensation Payments in Medical Malpractice Litigation” N.E. Journal of Medicine (2006) “The profile of non-error claims we observed does not square with the notion of opportunistic trial lawyers pursuing questionable lawsuits in circumstances in which their chances of winning are reasonable and prospective returns in the event of a win are high. Rather, our findings underscore how difficult it may be for plaintiffs and their attorneys to discern what has happened before the initiation of a claim and the acquisition of knowledge that comes from the investigations, consultation with experts, and sharing of information that litigation triggers. Previous research has described tort litigation as a process in which information is cumulatively acquired.” Copyright 2009 Dwight Golann

23. Claims that lack evidence of error are not uncommon, but most are denied compensation. The vast majority of expenditures go toward litigation over errors and payment of them. The overhead costs of malpractice litigation are exorbitant. Copyright 2009 Dwight Golann