June 18, 2021
BY: Lesnevich, Marzano-Lesnevich, O'Cathain & O'Cathain
Wrongful Death Lawyers
Given the way that the media works, we frequently hear about lawsuits that result in huge verdicts or massive settlements in personal injury and wrongful lawsuits. These reports are news precisely because they are rare events. Unfortunately, they seem to represent the majority of cases because the public is not informed about how the majority of cases are resolved. Most cases result in reasonable settlements and reasonable verdicts. In addition, many cases result in a low settlement amount, for a number of reasons discussed below.
During the 2008 presidential campaign, verdict amounts became a political football. One candidate decided that by drumming up concerns about runaway verdicts and settlements, he could generate campaign contributions from big business, doctors and insurance companies. The candidate argued that reform measures were required to prevent doctors, insurance companies and hospitals from going broke. But what really caught the public’s ire was the argument that runaway verdicts were unnecessarily driving up the public’s health care costs and potentially driving doctors out of business.
As a result of this political grandstanding, most states enacted so-called tort reform that placed significant damages caps on all personal injury and wrongful death lawsuits, including medical malpractice cases. Now the opposite problem exists: patients who are injured by medical malpractice cannot get full and fair compensation due to unnecessary damage caps. There continue to be reports of large verdicts, but what is not reported is that the trial court is required to reduce the verdict amount as a result of tort reform laws. Even before tort reform, judges were empowered to reduce excessive jury awards. In this sense, the concern about runaway verdicts was always pure fantasy.
In light of damage caps, insurance companies are well-positioned to have the upper hand in settlement negotiations for catastrophic injury cases. Specifically, when there are damage caps, the insurance company knows that in most cases they will never have to pay the maximum amount on any given case. Instead, the maximum amount becomes the starting point for settlement negotiations. The settlement amount is always less than the maximum amount.
In many cases, liability is in dispute. If the defense wins on liability, the plaintiff recovers no money. This is of concern in every medical malpractice case where liability is always aggressively defended and jurors often are incapable of finding in favor of an aggrieved plaintiff. In our state, for example, hospitals and doctors win at trial about 80% of the time. With a 20% chance of winning at trial, the patient often has to compromise significantly in order to receive any compensation through settlement. In this way, the deck has been stacked against injured patients so that they are economically manipulated into agreeing to a low settlement.