Law Concept May Provide Cure To Medicine's Malpractice Woes
March 6, 2002-- The
debate over whether patients should be allowed to sue health care
providers, including HMOs, once again has emerged as a hot political
topic, with strong views on both sides.
issue, however, often has been framed in all-or-nothing terms that
leave little room for meaningful dialogue or a politically feasible
compromise. One camp advocates the complete and nearly unrestricted
right of patients to sue, with little, if any, consideration for
the uncertainty, delay and high costs associated with a normal tort
claim. Others advance the position that patients should not be permitted
to sue their HMO, with not enough consideration given to the unfairness
of leaving patients with little, if any, legal recourse to hold
alleged wrongdoers accountable.
an innovative article, however, Professor Jeffrey O'Connell of the
University of Virginia School of Law, one of the nation's foremost
tort reformers and coauthor of the principal work that proposed
no-fault insurance, and Andrew S. Boutros, an attorney in private
practice, suggest a socially responsible and politically acceptable
alternative. In the current issue of the Notre Dame Law Review,
O'Connell and Boutros discuss their proposal in an article titled
"Treating Medical Malpractice Claims Under a Variant of the Business
Judgment Rule." Their proposal is called the "early offers" plan.
plan is based on the business judgment rule, one of the country's
most well-established corporate governance doctrines. It provides
that courts will not second guess the decisions of a corporation's
officers or directors if those decisions are within their authority,
have a rational basis, and are made in good faitheven if they
turn out to be mistakes in judgment.
O'Connell and Boutros explain, the "early offers" plan is essentially
an improved adaptation of the business judgment rule. It would allow
a health care provider, including an HMO, facing a patient lawsuit,
to offer the patient within a timeframe set by law (say 120 days
after a claim is filed), periodic payments of all net economic losses
not covered by other insurance, namely, lost wages, medical expenses,
rehabilitation costs and attorney fees. Importantly, nothing would
be paid for noneconomic damages such as pain and suffering. An early
offer accepted by a patient would end the dispute.
who rejects an early offer, however, would have to establish two
things: First, that the defendant acted with gross negligence,
and second, such gross negligence would have to be proved by clear
and convincing evidence or preferably beyond a reasonable doubt.
An early offer results in a much more difficult case for a plaintiff
to prove, the theory being that once an early offer has been made,
courts should not substitute their judgment for that of a defendant
unless there is bad faith in the decision-making process or in the
execution of the decision
an extensive discussion, O'Connell and Boutros show that the policies
and rationales behind the business judgment rule apply with equal
force in the area of medical malpractice claims. Moreover, they
write, the majority of claims against health care providers, including
HMOs, would lend themselves to resolution under the early offers
plan, which offers benefits to both sides of a lawsuit.
would welcome the opportunity to settle claims early in the adjudication
process, thereby avoiding the uncertainty of runaway verdicts and
expensive attorney and expert fees. Plaintiffs would benefit from
securing prompt payment of economic losses and attorney fees, while
also being spared the uncertainty, delay and huge legal fees (between
30 to 60 percent of their payment) of a tort suit. Significantly,
unlike the business judgment rule, the early offers plan does not
immunize a defendant from liability; instead, it takes the socially
responsible position that defendants must make patients economically
whole before any protection is given from full-blown tort liability.
article: Jeffrey O'Connell & Andrew S. Boutros, Treating
Medical Malpractice Claims Under a Variant of the Business Judgment
Rule, 77 Notre Dame L. Rev. 373 (2002).
Contacts: Andrew S. Boutros (202) 887-3727 or Jeffrey O'Connell
924-7809 (after March 17, 2002)