October 2003

When settling a case might make sense

by Timothy Feuling

One of the most important elements in any malpractice insurance policy is the "consent to settle" clause. This provision gives the doctor the ultimate decision about whether or not a malpractice case should go to court, or be settled out of court. Without this clause, the insurance company makes the decision (with or without the approval of the doctor) and often, that determination is made based on what's best for the insurance company.

But, although it's crucial that your policy should give you the right to say "I won't settle," there are times when you might want to consider that alternative.

To decide whether or not to settle, talk with your insurance company representatives and attorney. Be completely honest with them about the facts of the case, and listen to their opinion. Critically and objectively evaluate the strength of your case. Did you provide proper care for your patient? Did you act in accordance with appropriate guidelines and within accepted professional norms? If you did, you still have an even more important question to ask: did you keep the kind of accurate and complete documentation needed to prove it?

It may not be easy for you to admit to yourself (or to your attorney and insurance company), but if you didn't act in accordance with the standards of your peer group, maintain proper and complete records, or make sure your actions were congruent with your stated practice purpose, you might be better off settling the case.

This would include situations, for instance, where your practice forms included medical terminology that went beyond your state's scope of practice, or you provided non‑chiropractic medical advice to your patients.

Keep in mind that motivation doesn't count here. You might have had good intentions, might have genuinely had your patient's best interests at heart. But if the care you provided or the advice you gave cannot be supported by the Council on Chiropractic Practice Guidelines, or other widely accepted guidelines, you will have little to bring to court in your defense.

Even if you provided proper treatment, you'll need to prove it in court. That means having complete and accurate records of all contacts with the patient, a signed Terms of Acceptance form, a Report of Findings, and other documentation that will show you explained the purpose of your care to your patient and fulfilled all your legal and moral obligations. You'll need to be able to show evidence that your care was supported by professional standards and you'll need the fortitude and time to go through the actual process of a court trial.

Should you come to the conclusion that you weren't in the wrong, you still need to weigh the negative effect of a settlement against the physical, emotional and economic ramifications of enduring, and possibly losing, a lawsuit.

In 1999, Dr. Charles E. Kerr, M.D., a Michigan M.D. with a family practice, wrote an article for Medical Economics titled, "Why I settled a malpractice suit I thought I could win." He described the psychological turmoil the lawsuit caused him. "Being sued was very emotional for me. My job is a major portion of who and what I am, and this threat to my career filled me with anxiety. That made it difficult to concentrate on my practice, and I became irritable and intolerant with my office staff. I also became concerned about 'limiting my exposure' when treating seriously ill patients, and I started ordering more consultations to protect myself."

The stress, and the trial schedule, took its inevitable toll when the case went to court. "As the trial went into its third week and threatened to drag on for several more, I was finding it very difficult to keep up my solo practice. I tried to cram all my office appointments into one full day and two partial days each week."

During the first few weeks of the trial, it became apparent that the case wasn't going his way, even though he remained convinced that he had not committed malpractice. "We felt that the judge's rulings on several crucial motions had shown a bias for the plaintiffs. We also feared that most of the key points in my favor were too complex for the jury to understand. If we didn't cooperate with the judge's efforts for a settlement, our prospects in court might worsen."

Meanwhile, he explained, he lost $30,000 in practice income and his family and office staff members were pressuring him to settle so his practice, and his life, could return to normal. Finally, he did settle and began the task of putting the unpleasantness behind him.

The question then becomes, will victory in court be won at too great a price?

When answering that question, you'll have more than just the economics to consider. Most doctors, for example, fear the loss of their reputation if the lawsuit is reported to the National Practitioner Data Bank. While that is a legitimate concern, a listing in the data bank might have far less impact on your practice than a protracted trial. As Evelyn W. Bradford, a malpractice attorney in Waynesboro, Pa., once told a client: "A scorned patient has a much better chance of hurting your livelihood than a single report in the data bank."

In an article in Medical Economics, she added this bit of sound advice: "Don't prolong the agony by refusing to settle when the deck is clearly stacked against you." ("Just got hit with a malpractice threat? Cool it," by Evelyn W. Bradford. Medical Economics, May 11, 1998.)

Obviously, there are no clear "ground rules" for deciding when to fight a lawsuit and when to settle. Each case ‑ and each doctor ‑ is unique and the decision must be made only after looking at all the factors involved.

(Timothy J. Feuling is president of Chiropractic Benefit Services (CBS) and vice president of the World Chiropractic Alliance. He assists doctors in maximizing their practices through the proper choice of insurance and related services. Doctors may contact him with questions, comments, and requests for insurance quotes at 2950 N. Dobson Rd. Ste. 1, Chandler, AZ 85224, by phone at 800‑883‑0412 or by e‑mail: feuling@cbsmalpractice.com).