To settle or not to settle: That is the question

To settle or not is a vexed question for all involved in Medical Negligence matters i.e. Doctors, Plaintiffs, Lawyers and Insurers.

The decision to settle or to defend a case rests with the insurer but the views of the doctor are taken into account.

The short term advantages of settling an action for negligence are obvious to plaintiff and doctor, who avoid costly litigation and the stress of court appearances. Consideration should be given however, to the long term impact of settling claims.

Why medical indemnity insurers settle claims

Certainty of outcome helps the calculation of future premiums. In the short term, settlement is likely to be less expensive, especially for smaller claims where legal expenses can be greater than damages. Settling a claim reduces immediate risk, as a court may award greater damages than anticipated.

For various reasons an insurer may anticipate that a Doctor would not be a credible witness in court due to inconsistent recall of events or the absence of adequate clinical records. Further, the doctor might be judged as unlikely to withstand the strain of appearing in court.

Why doctors want claims to be settled

Media reports of newsworthy (read "sensational" or "exaggerated") claims, may damage a doctor's reputation and his practice. Even if the claim fails, the situation may not be much better because little prominence is given in the media to failed claims, with any reports being buried on page 22 or thereabouts.

A doctor who is aware of a significant deficiency in the treatment provided, may wish to settle a claim. Even a doctor who believes that the claimant was well treated, may, for reasons of altruism be more comfortable settling. As the conditions of settlement are commonly confidential, a doctor's reputation seldom suffers when a claim is settled. In addition, doctors may reasonably expect that being "grilled" in court will be a harrowing experience. A specialist in a tertiary referral practice, wishing to uphold his reputation among his peers, similarly can be tempted to settle.

Why doctors want to defend claims

For some this becomes a matter of principle and justice, especially when the doctor believes that they have done all or more that they reasonably could.

It is always a courageous decision to opt to defend a claim when the seemingly easier unpublicised option is available.

Longer term benefits for insurers and doctors of defending claims

If it becomes widely believed that an insurer prefers to settle claims, plaintiffs, and more particularly their solicitors, are encouraged to make such claims. An advantage for plaintiffs, but not necessarily their lawyers is that legal expenses, which can seriously defray awards are minimal.

On the other hand, if it is known that an insurer has a policy of defending claims, Solicitors are more likely to advise clients against making small or dubious claims, or to press for unreasonably high settlements.

In the longer term a policy of defending claims that are considered trivial, unjustified or excessive should benefit insurer and insured.

Ethics of defending claims

Medical indemnity litigation should not be seen as a form of social security. As the key to every claim is the concept of negligence, where there is no negligence, no claim should be sustainable.

Frequent claims and unjustified payouts increase premiums and encourage defensive medicine, so increasing the costs of medical care.

Although vigorously defending medical indemnity claims may not appear to be in the best short term interests of doctors, a policy of defending unjustified claims can only benefit all parties. Reduced indemnity payments reduce the price of medical care, while lawyers and their clients will see the wisdom of not incurring the emotional and financial costs of failed litigation.

Summary

In summary, my belief is that the good of the community as a whole is enhanced by the vigorous defence of most medical negligence claims.

John A. Buntine
Plastic Surgeon
Invivo Medical Advisory Panel