What a malpractice lawsuit actually costs you, financially and otherwise

(Note: This is an excerpt from “Money Matters” with Steven Podnos, M.D., CFP. The transcript has been edited for brevity and clarity.)

I was unfortunate enough to be involved in a six-year medical malpractice lawsuit early in my medical career, so I’ll try to give you some personal insights.

Many of these cases take three to seven years to be resolved. During that time, you are going to be subject to many sleepless nights, much aggravation, a fear of losing some of your savings and more.

There are firms that specialize in medical malpractice, and they are pretty good at sorting out which cases are worth pursuing. They will make a request for medical records and decide whether there is a case to be made.

They may then file a formal claim and send you what’s called a set of interrogatories. These include many questions. Your response, even to receiving a request for information, should be to notify your malpractice carrier. It should help you with the answers. A period of discovery follows. The process involves a review of records: What did you write? When did you write it? The discovery process also involves expert witnesses on both sides, and you will be subject to questioning by both sides.

Part of a deposition is the plaintiff’s bar looking at you to see what type of witness you are and how they think you would present yourself in a jury trial. The better you present yourself with confidence and knowledge, the worse for them.

Let’s talk about finances. Some physicians are fortunate to be indemnified against financial damages. This is fairly common for state government-employed physicians, but it also exists in nongovernmental groups. If you are lucky enough to have indemnification, you still have to go through the process, but you don’t have financial loss as part of a bad outcome. Most physicians must rely on their malpractice insurance coverage.

After the discovery process, there is often a mediation. Each side makes its case, as if in a courtroom. The mediator then goes back and forth between the parties to try to reach a settlement. If this doesn’t happen, a potential trial date is sent. This can be months or even a year or two later, and during that time, both sides may continue negotiations to reach a settlement amount. Most cases are settled, which means that your insurance company or whoever is indemnifying you will make an offer that is accepted by the plaintiff’s attorney. You usually have no control over this. They have all the power to decide whether to settle and for how much. For this reason, I encourage the physician families I work with to seek private defense counsel and instruct their insurance company to settle up to their policy limits.

Steven Podnos, M.D., CFP is a fiduciary fee-only planner with HB Wealth. He can be reached at Steve.Podnos@hbwealth.com, or visit HBWealth.com, or call Steve at 321-543-1099.