No one can predict with certainty what a jury will do during a malpractice trial. To guard against a runaway verdict that could expose a physician and his or her insurer to a multimillion-dollar award, defense attorneys may seek a compromise called a high-low agreement.
For example, when a New York nursing home was sued for malpractice, the insurer and the plaintiff agreed to a high-low of $75,000/$750,000. That means, no matter what the jury awards, the plaintiff won’t get less than $75,000, but neither will he get more than $750,000.
The plaintiff's family was worried that they would get no award, and the nursing home was worried that they would be socked with a huge award. The agreement turned out to be a great deal for the nursing home, because the jury awarded over $18.5 million. The case settled for $750,000.
High-lows also protect plaintiffs. They provide some compensation and legal expenses even if the jury finds for the physician. These agreements have been around for decades but are relatively uncommon, occurring in perhaps as many as 10% of cases that go to trial, say malpractice attorneys.
The agreement allows the parties to hedge their bets. It is still a gamble, but one with a safety net for each side. If the jury verdict is between the two numbers, that is what the plaintiff would receive.
In one case in New Jersey, a business executive had severe neurologic impairment following cardiac surgery. "There were highly technical medical issues and the liability was closely debated by expert witnesses for each side. We didn't know what the jury would do," says Armand Leone, MD, a radiologist-attorney in Glen Rock, New Jersey, who represented the plaintiff.
"My client had a high-income job and could no longer work. So the potential damages could have exceeded $5 million if the jury found for us. The surgeon had a $2 million policy. We agreed to a high-low of $500,000/$2 million.
"The jury found for the doctor," Leone said. "The plaintiff received $500,000 but the insurer avoided the potential exposure. As a plaintiff's attorney, it is nice when you lose a case and still get $500,000 for your client." The opposite scenario protects health professionals against a runaway verdict.
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Cite this: Mark Crane. One Way to Avert a Sky-High Malpractice Award - Medscape - Oct 06, 2011.