Legal, practical, and ethical considerations of medical malpractice settlements.

• Author: Rubin, Robert I.
• Position: Florida

For a physician who has been named as a defendant in a medical malpractice lawsuit, the decision whether to settle has significant legal, practical, and ethical implications. The physician defendant typically has extremely strong feelings concerning such a decision. Emotions can range from relief and gratitude to extreme anger. Physicians sometimes oppose settlement because they believe that settling is tantamount to acknowledging that a claim has merit. This article will discuss the legal, practical, and ethical considerations of a medical malpractice settlement for the physician and the defense attorney. Hopefully, increased understanding of these important and often competing factors will lead to a more informed, and, therefore, better decision for the physician.

The Defense Team

Typically, in a medical malpractice case, the defense team consists of the physician defendant, the defense attorney, who generally is assigned by the insurance company, and the adjuster. There are, however, some variations on the theme. In some cases, the physician retains a personal attorney to provide advice and assist the defense attorney assigned to handle the case by the insurance company. Moreover, an increasing number of uninsured physicians practice in Florida. (1) Defending the uninsured physician will present different challenges.

The Insured Physician

Often the physician defendant is conflicted and/or confused concerning the consequences of a settlement. Just as a treating physician must obtain an informed consent from the patient, the defense lawyer is obligated to explain to a physician defendant the risks and benefits of settling the case. Pursuant to F.S. [section]627.4147, the doctor's wishes are not binding upon the insurance company. In the author's experience, however, most insurance companies, especially those with a large presence in Florida, give great weight to the physician's desires concerning settlement.

The defense lawyer who advises a physician defendant about settlement options must be sure to cover the following points.

1) The possibility of potential personal exposure in excess of the policy limit if the case is lost.

2) Whether the physician has effective asset protection.

3) The likely effect of a settlement, or an adverse verdict, on the future insurance premiums or insurability of the physician.

4) If the defense team puts on a summary jury trial, (2) the result?

5) The fact that a settlement does not count as a "strike"; (3) where, in contrast, an adverse jury verdict upheld by the Board of Medicine does count as a strike.

6) The fact that F.S. [section]456.041(4) provides that settlements (or verdicts) over $100,000 are reported to the Department of Health and posted on its Web site.

Scenario One: Both Doctor and Insurance Company Do Not Want to Settle

By far, the most common scenario is when the physician and the insurance company believe the plaintiff's case lacks merit and should be vigorously defended, including through trial, if necessary. Most Florida carriers are very aggressive about defending cases. Only 37 percent of cases closed in 2007 result in a settlement or judgment. (4) Trial results were almost identical, with defense verdicts occurring approximately 65 percent of the time. (5) This "no settlement" scenario obviously presents no conflict of interest for defense counsel, since both the physician and the insurance company desire the same outcome--a dismissal, or a trial, if dismissal is not possible.

Scenario Two: Both Doctor and Insurance Company Desire Settlement

Sometimes, there is consensus by the defense team that a case is indefensible and should be settled for a reasonable amount. Here as well, defense counsel has no conflict of interest. The attorney's job is to try to achieve the smallest settlement possible.

It will not surprise anyone involved in litigation that, on occasion, the plaintiff 's demand will not be perceived as reasonable, and the case has to be tried, despite the defense team's unified desire to settle. Also, with the prevalence of low $250,000 medical malpractice policy limits, the plaintiff's attorney may insist that the doctor or his or her professional association contribute personally toward the...