Will med-mal arbitration ever catch on?

Despite physicians’ and medical liability insurers’ vocal support of settling medical malpractices cases through arbitration, plaintiffs’ lawyers’ resistance is keeping it from catching on.

A form of alternative dispute resolution, arbitration is used to resolve legal claims outside the courtroom. Typically, a one- to three-person panel – often made up of retired judges – hears evidence from both sides and makes a decision. If the parties have agreed to binding arbitration, the decision is final.

Health care defense lawyers and insurers cite the benefits of taking cases to arbitration rather than trial.

“We are big believers in arbitration from a company perspective,” said Al Afonso, vice president of claims at ProMutual Group, a Boston-based medical professional liability insurer. “It’s a committed time frame, there’s no postponements and [physicians and hospitals] like the fact that they’re going to be presenting their side of it to an educated arbitrator, versus a potentially uneducated or misinformed jury panel.”

“The general benefits of arbitration are lower costs, faster results and limited appellate reviews,” agreed Robert Parker, a health care defense attorney in Merrillville, Ind.

But many plaintiffs’ lawyers remain convinced that arbitration decisions are stacked against them.

“We are not interested in waiving the right of a jury trial,” commented Andrew C. Meyer, a plaintiffs’ attorney and partner at Lubin & Meyer in Boston.

Meyer said he thinks arbitration generally is “disadvantageous to the plaintiffs.”

“Even when there is a successful result, there appears to be some limitation on the award given, and [the amount] is usually quite conservative,” he said.

Afonso agreed that in decisions that go to plaintiffs, arbitration awards tend to be “much more reasonable” than jury awards. In addition, he said, the company does not agree to arbitration unless the plaintiffs are willing to cap damages at policy limits.

Thomas Metzloff, a professor at Duke University School of Law in Durham, N.C., who has studied alternative dispute resolution in med-mal cases, said that Meyer’s sentiments are typical of many plaintiffs’ attorneys.

“The plaintiffs don’t want it. They want juries,” Metzloff said. “They think that’s where their leverage is for settlement.”

California leads the way

In California, arbitration of individual med-mal claims is routine, mainly due to Kaiser Permanente – the state’s largest HMO – which requires all members to take malpractice claims to arbitration.

Scott Harris, a plaintiffs’ lawyer in San Diego, likes Kaiser’s arbitration system.

“A lot of lawyers think that going to trial is great, but in California, especially San Diego, doctors win 90 percent of the time,” he commented. “I would say arbitration is not a bad thing. It gets cases resolved, and it’s cheaper and better for the patient.”

Last year, 13 cases in ProMutual’s caseload went to arbitration, up from five cases in 2008. In 2007 and 2006, 13 and 14 cases, respectively, went to arbitration.

While the company won 11 of 13 arbitrations in 2009, its success rate in the previous three years averaged 58 percent.

In contrast, the company tries between 100 and 110 cases a year, and wins about 90 percent of them, according to Afonso.

David Arkush, director of the Congress Watch division of Public Citizen, a Washington, D.C. consumer group, said he’s not opposed to arbitration, only mandatory arbitration.

“Arbitration is okay, as long as it’s voluntary on both sides,” he said. “It’s not okay if before you even have a dispute you’re told you have to sign away your right to go to court.”

Dwight Jefferson, an arbitrator and retired judge in Houston, questioned whether a mandatory arbitration clause signed by a patient “is truly negotiated, or is it adhesive in the sense that it’s stuck in as part of the contract?”

Without such clauses in physician and hospital contracts, however, med-mal arbitration will never be the norm, Metzloff contended.

“Plaintiffs’ lawyers will never give in and say arbitration is okay, and although you have doctors who think it would be better, until you get HMOs that can control this, like the nursing homes, I think we’ll continue to dribble along,” he said. “Right now, it’s an option, but not a viable option that’s readily available.”

Lee Johnson, a health care risk management expert and defense attorney in Mt. Kisco, N.Y., agreed: “In most states, arbitration is never mentioned because the court system is the method of choice for resolution of disputes.”

On the other hand, she noted, California is known as a leader in alternative dispute resolution. And the prevalence of med-mal arbitration there may be a sign that it will catch on more broadly across the U.S.

“Where California goes, thus goes the rest of the country,” Johnson said.

Questions or comments can be directed to the writer at: nora.tooher@lawyersusaonline.com