If an insurer insists on settling
Most insurers can't settle a case without your consent.
Be honest with yourself in evaluating the care you rendered.
Have your own attorney review the case, and the insurer's recommendations.
Q: My malpractice insurer wants my permission to settle a suit filed against me a few years ago. I don't think I did anything wrong. Must I settle? What options do I have?
A: Whether you have to settle depends on the terms of your policy. Most specifically require the defendant's consent before an insurer can settle a case. Others contain a "no consent" clause that gives the insurer the right to make any settlement it deems expedient, as long as the amount doesn't exceed the policy limits. Insurers frequently offer these "no consent" policies at a slight reduction in premium. Courts usually reject a doctor's attempt to block settlement if he has that clause in his policy.
Before deciding whether to settle, try to assess the lawsuit's merits objectively. Will your clinical decisions and actions seem defensible to a jury looking at the facts in retrospect, with a plaintiff's attorney and expert witnesses pointing out every possible flaw in the most glaring terms? Are there any grounds for the allegation that you departed from the standard of care?
Once a complaint is filed, an insurer typically will seek an impartial evaluation of the case from an in-house physician. It might then commission an outside review as well, from an expert in your specialty. Since your insurer is recommending settlement, it may mean these reviews weren't favorable to you.
Ask for copies of the expert reviews. If the insurer hasn't had one done, demand one. It would be rare for an insurer to settle a case without an expert giving an opinion about what a reasonable physician in your specialty would have done in similar circumstances.
Can you rely on the insurer's recommendations? For the most part, Yes. You and your insurer share the same general interest. The insurer doesn't want to knuckle under to frivolous allegations. It wants to resolve the case as expeditiously and as inexpensively as possible.
Still, your interests and the insurer's may diverge if the potential award could exceed your policy's limits. Or the carrier may want to settle the case for "nuisance value," a nominal amount such as $10,000. That would be far less than what it would cost to defend the case in court.
It doesn't matter to them that even a nominal settlement must be reported to the National Practitioner Data Bank. But that report can have serious ramifications for you. Hospitals and managed care plans query the databank about credentialing, and states ask about licensure applications. A blot on your record could mean you don't get hospital privileges or membership on managed care panels.
After evaluating the medical facts as honestly as you can, consult with your insurer and the attorney assigned to you. They can advise you about the many external factors in litigation, including the judge, jury pool, and media climate in your locale.
You should also consider hiring your own attorney to review the case with the insurer. If he fears a runaway jury, you might want to insist that the carrier settle the case within your policy limits. Alternatively, if he believes the case against you is weak, he can demand that the insurer defend you vigorously rather than settle out of convenience.
If you insist on your day in court, make sure the insurer and attorney adequately prepare you to answer the questions the plaintiff's attorney is likely to raise.
Lee Johnson. Malpractice Consult: If an insurer insists on settling. Medical Economics Jul. 11, 2003;80:96.