A Malpractice-insurance Crisis

A major point has been overlooked regarding the medical malpractice insurance crisis. Current law gives the medical industry a $250,000 cap on intangible damages (for example, if someone must live the rest of her life paralyzed) when an offer to arbitrate damages is made. If the offer is rejected, the jury’s power to return a verdict is limited to $350,000.

At the time the current cap was enacted, lobbyists argued the cap would stabilize insurance rates. The fact that malpractice insurance crisis is more intense than ever validates the Sentinel’s several editorials that caps are unlikely to reduce rates.

The difference between the existing cap and the proposed legislation is that, under the proposed legislation, the medical industry is not required to offer arbitration to enjoy the cap. Some hospitals have availed themselves of the current cap, but the majority of medical providers prefer to risk even meritorious claims before a jury in hopes of paying nothing rather than offer to arbitrate, which implies payment of some compensation not to exceed $250,000 for pain and suffering.

In theory, the medical industry has the unilateral power to restrict all medical-malpractice claims to a few hundred thousand dollars for pain and suffering and never suffer multimillion dollar verdicts by simply offering to arbitrate. Based on Florida law, the patient is required to present testimony of malpractice from a disinterested medical expert before a claim letter can be written to the negligent provider.

This means that most if not all medical-malpractice claims are at least debatable. Offering to arbitrate is not an admission of liability, and if arbitration is rejected, the medical industry may still fight liability tooth and tong when it goes before the jury.

We are not in a medical-malpractice crisis, but rather we are in a malpractice-insurance crisis. We do not have a judicial system out of control, and claims are not running doctors out of the state. It is insurance rates running doctors out of state.

It is surprising to me that loud rhetoric is not directed towards the fact that state and federal constitutions guarantee jury trial in civil cases. Neither the state nor federal constitution condition the right to jury trial to cases involving less than $250,000.

The apathy of ignoring our constitution to accommodate insurance rates is particularly puzzling when the proposed cap on damages applies to people suing insurance companies, but no caps are suggested when insurance companies sue people or, for that matter, when corporations sue corporations for the last farthing.

Now for the solution. The solution is self-insurance. During my term as an officer of The Florida Bar, when legal malpractice rates escalated, The Florida Bar self-insured. Insurance companies got the message and lawyers no longer have a problem with malpractice-insurance rates.

On the other hand, if the goal of medical industry is simply to avoid accountability notwithstanding the merits, then none of the arguments I present here apply.

My Word
By Russell Troutman
The Orlando Sentinel
Friday February 11, 2003

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