Screening Plaintiffs and Selecting Defendants in Medical Malpractice Litigation: Evidence from Illinois and Indiana

• Author: David A. Hyman,Mohammad Rahmati,Bernard Black,Charles Silver,Jing Liu
• DOI: http://doi.org/10.1111/jels.12173
• Published date: 01 March 2018
• Date: 01 March 2018

Screening Plaintiffs and Selecting

Defendants in Medical Malpractice

Litigation: Evidence from Illinois

and Indiana

Mohammad Rahmati, David A. Hyman, Bernard Black, Jing Liu, and

Charles Silver*

Many physicians and tort reform advocates believe that most medical malpractice (med

mal) claims are “frivolous.” As evidence, they often rely on reports that only about 20

percent of claims result in a payout. Many physicians and reform advocates also believe that

plaintiffs lawyers often sue every health provider with even a remote a connection to the

patient. Plaintiffs’ lawyers, however, insist that they screen med mal cases carefully, and

when they bring a claim, are selective in whom they sue. Can these perspectives be

harmonized? We study this question using databases of every insured med mal claim closed

in Illinois during 2000--2010 and in Indiana during 1980--2015, and with semi-structured

interviews with six plaintiffs’ lawyers. We innovate by using defense costs to assess whether

plaintiffs’ lawyers take a case seriously. We treat cases with under $5k in defense spending

as “nonserious” unless they have a payout over $25k. We find evidence that many “cases” are

nonserious---suggesting that screening is an ongoing process that does not end when a case

is accepted. Observed success rates are sensitive to whether one counts “claims” (each

defendant is a separate claim) or “cases” (one plaintiff vs. one or more defendants),

includes pro se and/or only represented cases, and includes all versus only serious cases. If

we analyze cases instead of claims and limit to serious, represented cases, we find much

higher success rates (43 percent in Illinois; 44 percent in Indiana). Success rates are higher

still in cases brought solely against institutional defendants (58 percent in Illinois; 68

percent in Indiana). Plaintiffs’ lawyers are also selective in the number of defendants they

sue. In med mal cases involving only physicians and/or institutions, the mean number of

defendants is 1.5 in Illinois and 1.8 in Indiana.

*Address correspondence to David A. Hyman, Georgetown University Law Center, 600 New Jersey Ave., NW,

Washington DC 20001; email: dah137@georgetown.edu. Rahmati is Assistant Professor of Economics at Sharif

University of Technology, Tehran; Hyman is Professor of Law, Georgetown University Law Center; Black is

Nicholas J. Chabraja Professor at Northwestern University, Pritzker School of Law, Institute for Policy Research,

and Kellogg School of Management; Liu is Graduate Research Assistant at the University of Illinois College of

Law; Silver is Roy W. and Eugenia C. McDonald Endowed Chair in Civil Procedure, University of Texas School of

Law.

We thank William Sage and participants in workshops at University of Illinois, Northwestern Law School, and

the Midwest Law & Economics Association Annual Meeting for comments, and Anupam Jena for providing the

data for specialty-specific success rates from Jena et al. (2011).

41

Journal of Empirical Legal Studies

Volume 15, Issue 1, 41–79, March 2018

I. Introduction

When it comes to medical malpractice litigation (med mal), physicians and plaintiffs’

lawyers seemingly occupy mirror-image parallel universes. According to physicians of

our acquaintance, plaintiffs’ lawyers commonly bring weak, often “frivolous” cases. They

also often sue everyone in sight—even those with only a remote connection to the plain-

tiff. Conversely, plaintiffs’ lawyers insist that they screen med mal cases very carefully,

and are selective in whom they sue.

Both sides point to evidence supporting their respective positions. Physicians

point to data showing that around 80 percent of med mal “claims” close without pay-

ment, and to the high percentage of physicians who are sued for malpractice over the

course of their careers. Plaintiffs’ lawyers point to studies indicating that they reject

most claimants and to evidence that some physicians—the proverbial “bad docs”—are

much more likely than others to face multiple claims. They also emphasize that the con-

tingency fee system provides strong incentives for them to pursue only meritorious

cases.

Can these competing perspectives be harmonized? Which seems a better match

for the data? We analyze comprehensive datasets from Illinois and Indiana, covering

every insured med mal claim closed in Illinois during 2000–2010 and in Indiana during

1980–2015. We also conducted semi-structured interviews with six med mal plaintiffs’

lawyers—five who practice in Illinois and one who practices in the mid-Atlantic region.

We find evidence that case screening is an ongoing process, rather than a binary deci-

sion. Consistent with prior research, plaintiffs’ lawyers report turning away many of

those seeking representation after a short initial meeting or phone call. Our data also

suggest, and our interviews confirm, that plaintiffs’ lawyers also drop a significant num-

ber of cases that pass their initial review, when further information makes it clear the

case is not worth pursuing—because damages are insufficient or uncollectable; liability

is too difficult to establish; or the costs of pursuing the lawsuit exceed its expected

value. Plaintiffs’ lawyers also told us that they will also drop some defendants from a

case if investigation indicates that these defendants did nothing wrong or at least that

the marginal expected recovery from including them is outweighed by the incremental

cost of doing so.

Defendant-physicians still perceive (and experience) these dropped or abandoned

cases as personal attacks on them as physicians, and often view them as frivolous claims

that should never have been brought. Why and how does that happen? When plaintiffs’

lawyers request copies of medical records, physicians in Illinois often communicate that

inquiry to their med mal insurer, who opens a claim file. If a lawsuit is never filed or

does not name that physician, the insurer will close the claim file with zero or nominal

legal fees and no payout. However, the physician will still perceive that a claim has been

made—and view closure without payment as evidence that the claim should never have

been brought in the first place. The difference in perceptions is compounded by a fur-

ther misunderstanding over whether the physician faced a genuine risk of liability when

a claim file is opened but no lawsuit was ever filed. Plaintiffs’ lawyers do not believe that

42 Rahmati et al.

there is any liability risk unless and until a lawsuit is actually filed. But, based on our

conversations with physicians, they do not sharply differentiate between an inquiry that

triggers opening a claim file and an actual filed lawsuit. In combination, these factors

help explain why physicians are so indignant when many med mal claims close without

payment, even though that is the “right” outcome, obtained with minimal or no

defense-side legal fees.

Our data suggest, and our interviews confirm, that screening does not stop when

a suit is filed. In some instances, postfiling investigation reveals the case is not worth

pursuing, and the plaintiffs’ lawyer will drop the case. Defendant physicians will once

again view abandonment without payment as evidence that the case should never have

been brought. Sometimes, plaintiffs’ lawyers will pursue a case, but only against some

defendants, dropping others. The dropped defendants will likely feel that they should

never have been named.

A similar “through-the looking glass” dynamic applies to how the two sides assess

success rates. Defendant-physicians understandably focus on whether they were individu-

ally found liable. Plaintiffs’ lawyers are more likely to embrace a case-based perspective,

where a payout by any defendant counts as a win. Plaintiffs’ lawyers will also likely mea-

sure success rates for the cases they seriously pursue, and exclude cases that they drop

early on, while defendants will count the latter as no-recovery claims.

A hypothetical illustrates the impact of these differing perspectives. Imagine that

insurers open 10 “claim” files, of which two are paid. Now imagine that the 10 claims

represent five “cases” with two defendants each, that the plaintiffs’ lawyers drop two of

these cases early on, and earn a recovery in two of the remaining three cases, against

one defendant in each. Plaintiffs’ counsel will compute a 67 percent “case-level” success

rate; defendant physicians will perceive a claim-level success rate of 20 percent. As this

example shows, the choice of case-level or claim-level analysis, and whether one includes

dropped claims and cases in the denominator, can produce very different answers to

the question, “What is plaintiffs’ success rate?”

To provide a sense of magnitude, our Illinois dataset includes 26,361 “claims”

involving discrete defendants, but once we combine claims into “cases” brought by dis-

crete plaintiffs against one or more defendants, there are only 18,400 cases, of which

3,108 are pro se. If we focus on the 15,292 cases in which plaintiffs are represented by

counsel, and eliminate cases that are abandoned early on, or were not filed cases at all,

there are only 10,834 “serious” cases.

1

We estimate plaintiffs’ per-case success rates in

serious cases at 43 percent—more than double the “raw” 21 percent per-claim success

rate obtained by studying all claims.

Our Indiana dataset includes 59,836 “claims” involving discrete defendants, but only

22,304 cases, of which 19,434 involve plaintiffs who are represented by counsel. Of these,

13,959 are “serious” cases. We estimate plaintiffs’ per-case success rates in serious cases in

Indiana at 44 percent—three times the “raw” 14.4 percent per-claim success rate.

1

We define “serious” cases below, and discuss why most of the 4,458 nonserious Illinois cases we identify were

likely either abandoned or were never filed cases to begin with.

43Screening Plaintiffs and Selecting Defendants in Med Mal Litigation