Malpractice Consult

By Lee J. Johnson, JD

Don't try to "settle" a case yourself

•  Failure to notify your insurer of an incident could jeopardize your coverage.

• Your insurer can help secure clinical records so they won't be tampered with.

• When liability is clear, insurers often attempt quick settlements.

Q:My partner diagnosed bronchiolitis in a 2-year-old and prescribed a bronchodilator and other symptomatic medication. The patient still complained of coughing and congestion during several visits over the next two months. His mother took him to another clinic, where an X-ray revealed that a coin in the child's trachea was the cause of his recurrent wheezing. The child was hospitalized and the coin was removed. Now, the mother has asked my partner to contribute money for the expenses of the hospital stay and other associated costs. She hasn't given any dollar figure, and hasn't yet threatened to sue. Paying some of the expenses seems like an easy way out of a potentially difficult situation. Your thoughts?

A: Your solution isn't as easy as you might think. In fact, it could cause serious problems down the road.

You and your partner need to report the incident immediately to your malpractice insurance carrier and ask for a speedy evaluation. Every insurance policy states that you must notify the carrier in a timely manner about any incidents that could potentially result in a lawsuit. A patient's guardian asking you for money certainly qualifies. If you don't notify the carrier, it could deny coverage entirely if you're sued later on.

Reporting to the carrier helps in many ways. The insurer can help you secure the clinical record so it can't be tampered with or lost. The carrier can also take statements from witnesses while facts are still fresh in their minds.

The carrier has the experience and resources to evaluate whether there is any potential malpractice in the case. Since you're in a partnership, you may have legal exposure for the acts of your colleague under the legal principle of joint and several liability. The carrier will also assign an attorney to help advise you.

Once you report the incident, the insurer will conduct an in-house review to evaluate whether the failure to diagnose was a departure from the standard of care. If so, the carrier may attempt to settle the case with the patient quickly since the damages seem relatively small. If the damages were more significant, a quick settlement would be harder to achieve.

The patient's guardian will likely be asked to sign a release stating that by accepting the settlement, she gives up the right to file a lawsuit. Without such a release, the plaintiff can still find an attorney and file a lawsuit even after you've given her money. The insurer has lots more experience than you do in negotiating settlements and releases.

If you attempted to settle the case on your own and get the patient's family to sign a release, an attorney might later argue that you used your position of power and education to take advantage of a naive patient. If the case ever went to court, you could expect a question from the plaintiff's attorney along the lines of, "Doctor, doesn't the fact that you offered money to my client indicate that you admitted some wrongdoing in the matter?"

The question of whether to settle any case should be a business judgment. You have to weigh the costs of the settlement against the potential costs of litigation in terms of time, damage to reputation, and the potential of increased future premiums. Seeking the advice of your carrier is the best move in this situation.

 

Lee Johnson. Malpractice Consult: Don't try to "settle" a case yourself. Medical Economics Aug. 8, 2003;80:88.