Malpractice: When to Settle a Suit and When to Fight

Neil Chesanow


September 25, 2013

In This Article

When Settling Makes Sense

Over 90% of medical malpractice cases are settled out of court.[3] It's easy to understand why: money. The average court settlement is about $425,000; the average jury award tops $1 million.[3] Most of the time, it's a lot cheaper to settle.

A common misconception is that settling a case before trial means forking over a ton of cash. In fact, settling may not cost you a dime, and it commonly doesn't.

"When people say 'settle out of court,' there's a notion that they paid something prior to trial," Anderson says. On the contrary, he says. "In our experience, while 90% of malpractice cases close without a trial, 90% of the 90% -- or 82% of all claims -- close with no payment whatsoever. That $425,000 figure applies only to the 18% of cases that go to trial. It ignores the 82% of cases that don't go to trial, where the indemnity is zero."

Of course, if you actually did mess up, the settlement will involve money.

"If there's a case in which there's liability, it's to everyone's advantage to pay the liability quickly and move on," Anderson says.

But money may not be the only, or even the main, reason to settle. If your expert witness doesn't come off well during depositions, it could undermine your case. If you aren't able to project a sympathetic image to the jury, the same is true.

"An exceptionally sympathetic plaintiff, even though the facts don't favor him or her, might jeopardize an otherwise winnable case," Anderson concedes.

"We only make nuisance settlements if a doctor doesn't want to go to court," Anderson says. "A doctor might not want to do it for a case that we feel is winnable for lots of reasons. It could be intercurrent illness. It could be the disruption and distress of a trial to a doctor's practice and family life."

Indeed, earlier this year, the journal Health Affairs published a study of data from nearly 41,000 doctors insured for malpractice by The Doctors Company.[4] Assuming that the typical physician career would span 40 years, the investigators found that the average doctor spends 50.7 months -- or almost 11% -- of his or her career with an unresolved, open malpractice claim.

That psychic burden takes its toll. Even more than potential monetary damages, time spent worrying about and adjudicating a liability claim shapes "how doctors perceive medical malpractice," the researchers concluded.

Not every doctor, innocent or not, is cut out for the long-term stress that a malpractice trial involves when a reasonable settlement option is on the table.

"There's very little vindication in victory," Anderson concedes. "The average claim that goes to trial is a 3- to 5-year process. Emotionally it's consuming. The allegations made are intensely personal. In high-dollar cases, some of that is played out in the press. Winning is better than losing, but it can be a Pyrrhic victory."


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