Don’t decide too soon over whether to settle or fight
Weigh effects carefully after gathering information
It’s the rare lawsuit in which you can be perfectly certain that you should either settle it or fight the allegations all the way through a trial. In far more cases, the ethics committees have to decide which course of action offers the best result. Unfortunately, many committees base their decisions on bad reasoning, say some experts.
In too many cases, the risk manager and ethics committee will make that pivotal decision before they have enough information in front of them and before they have considered the real effects of the decision, says Greig Coates, MD, JD, an attorney with Mithoff and Jacks law firm in Austin, TX. He previously practiced medicine and now is a malpractice attorney.
Don’t be hasty
The decision usually will be made jointly by legal counsel, insurers, and hospital representatives, but the ethics committee usually will be involved, sometimes with the responsibility of making the primary recommendation. Some committees are prone to making a hasty decision if the case seems at first glance to be heavily lopsided either for or against the hospital, he says. That early impression can be quite misleading, he says.
"I cannot emphasize enough that the real risks posed by a jury trial cannot be known until the last expert and the last fact witness have been deposed, both those the defendant intends to use and those the plaintiff intends to use," he says. "Hospitals often have these committees that make a decision what to settle and they will make those decisions long before the cards are on the table. That’s a big mistake that can take you to trial when you shouldn’t go anywhere near a courtroom, or it makes you pay out to a plaintiff who would lose at trial."
The early decision is particularly dangerous because it is hard to rescind, Coates says. Even if all the facts are gathered before the settlement is finalized or trial begins, most organizations will find it difficult to go back on that initial decision. Remember that it is much easier to delay the decision than to change a bad decision, he cautions.
Coates also urges ethics committees not to rely too much on whether their facility and staff actually did anything wrong. The insignificance of their actual guilt can be difficult to acknowledge, partly because the committee may have a personal stake in the facility’s quality and because it probably is in contact with the individuals alleged to have harmed the patient. But Coates says that when it comes to making a decision about how to resolve a case, the realities of the legal system make the truth a minor consideration. Not a meaningless consideration, but far less important than other factors, he says.
"At the end of the day, whether the ethics committee members think in their hearts that the hospital did something wrong should be taken out of the calculation," he says. "The truth may or may not be revealed at the time of the trial. The average person assumes that the trial is all about seeking truth, but the trial is about seeking justice, and that is done according to the rules of evidence. Ethics committees may know for a fact that the hospital acted properly and met all standards, but it can all go out the window if a nurse admits on the stand that she didn’t follow the rules precisely and could have done better."
The crucial point is that the jury’s reaction can be extremely subjective. It is a huge mistake to make your decision as if the facts were going to be presented to a jury of medical professionals, Coates says. A lay jury can be swayed by emotion or by the way the rules of evidence prohibit certain disclosures.
"The real jaw-dropping outcomes that just flabbergast the defendant come when the hospital is certain it didn’t do anything wrong, but you didn’t know the nurse was going to get on the stand and say something you didn’t expect," he says. "I just had a case where the doctor defendant was adamant that she did nothing wrong, would not settle, and she didn’t even call a single person to the stand to justify her actions. She had a judgment in excess of $2 million against her."
Look at economic settlement to cut losses
Though it may be irritating, there will inevitably be cases in which the ethics committee is certain that there was no wrongdoing but that a trial is too risky, says R. Stephen Trosty, JD, MA, director of risk management at Mutual Insurance Corp. of America in East Lansing, MI.
"If you decide there is no negligence of malpractice, that doesn’t mean you refuse to settle," he says. "There are some instances in which you might have what I call an economic settlement. You look at what it will cost to go to trial and what you think you can settle it for, and if you can settle for considerably less than taking it to trial, you can settle for economic reasons."
Another reason to consider an economic settlement is the potential for bad publicity at trial. The actual dollars paid out are not the only potential cost to the facility. If the allegations become public record, then the facility’s reputation can suffer in ways that might translate into dollar loss down the road. And again, the actual truth of the allegations may have little to do with that result.
"But there is a flip side to that argument. You don’t want to get a reputation as a soft touch or a pushover," Trosty says. "If a hospital or a physician gets a reputation as someone who is willing to settle fairly easily, you may encourage lawsuits that are not legitimate. So you need to be really careful when deciding to settle even though you think the charges are without merit."
Nurses an important asset if case goes to court
Coates and Trosty offer this further advice on what factors to consider when deciding to settle a case or take it to trial:
• Look at the allegations, not the facts.
It’s important to investigate the facts, of course, but the strategy for the lawsuit should be based on the charges brought by the plaintiff.
"That’s what the jury is going to hear. You may know what happened. The question is what will the jury know? Those are very often two different things," Coates says. "But remember not to react too quickly to those allegations because there will be a lot of twists and turns along the way. If you make your assessment of the exposure too early, you really can’t get rid of that bias as you go forward.
• Watch for the physician to settle out.
If the malpractice case is brought against both the hospital and a physician or physician group, the physician will settle out and leave the hospital to face the allegations alone. Except in unusual cases in which the liability is crystal clear, it is important to delay your decision until it seems the physician has decided to fight or pay. If you decide to fight the case and then the physician bails out, the odds against you may suddenly be much worse, Coates says.
"The plaintiff can easily and very effectively move their turrets to train them all on the hospital," he says. "By then, the hospital has made its determination of what their exposure is and may not realize what they’ve been left holding now that
the doctor is out."
• Don’t underestimate the value of nurse testimony.
The hospital may be threatened by the idea of injured plaintiffs or family members testifying to a jury, knowing that the hospital is unable to provide testimony with the same emotional punch. Likewise, the hospital will be seen as a deep-pocket corporation rather than a human being like the physician defendant. But Coates urges ethics committees to think in terms of numbers of nurses, matching the other parties’ emotions with a volume of opposing testimony.
"Hospitals can’t put doe-eyed spouses and children in court to humanize them like doctors can, but their ace in the hole is the fact that hospitals can put on people in numbers," he says. "Never underestimate the credibility of nurses or the value of those nurses marching up to the witness stand serially and saying they did not see condition XYZ. You may not be able to give the jury a warm fuzzy like the physician or the plaintiff, but juries like the idea of one hardworking nurse after another saying she didn’t see anything wrong."
• Know your community’s jury demographics.
Another unfair reality of the court system is that juries in one community may react very differently from juries in another. Local attorneys usually become familiar with the demographics of surrounding communities and know how that can affect the likely outcome of a case. Jurors in some communities are much more likely to find for a plaintiff or defendant, regardless of the facts, and some are much more or less likely to hand out large awards.
• Watch the trial carefully and be ready to change your decision.
When a case goes to trial, Trosty says the hospital should have someone in addition to legal counsel in the courtroom every day watching the proceedings. Committee members might be a good choice for that task, he says.
"Things can come out during the trial that will make you want to rethink the need to settle and what you’re willing to settle for," he says. "And you also want to watch the attorneys to see how well you’re being represented."
• Be wary of last-minute settlement decisions.
If the hospital’s attorneys suddenly decide on the eve of a trial that settling is a prudent move, look at that recommendation skeptically. Trosty cautions that such a last-minute decision can have more to do with the attorneys’ abilities than in the merits of the case.
"It could mean that the attorneys are not very experienced in trial work and were hoping all along to force a settlement. Now that the trial is upon them, they’re panicky and want you to just settle the case and be done with it," he says. "If they do that at the last minute, they’d better come up with some strong reasons, like information that wasn’t available until now."
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content