Are insurance companies forcing defense attorneys to settle?

August 4, 2006

Sometimes, which leads to “managed law“:

Defense attorneys we consulted told us that some malpractice carriers push them hard to cut legal costs. Should that worry you? You bet. When defense lawyers are squeezed, it’s their clients who suffer, ending up with a second-rate defense and pressure to settle a possibly winnable case. Or, sometimes doctors end up in trial when they could – —and should – have settled.

The underlying problem is that defense attorneys really have two clients: the doctors they’re defending and the insurance companies that pay their bills. In many cases, the interests of the parties coincide. But not always. If the carrier wants to settle and the doctor doesn’t, the lawyer ends up caught in the middle. His obligation to defend the doctor may conflict with his loyalty to the insurer, particularly if he depends on it for a substantial part of his income.

“It’s a dirty little secret in the industry,” says one defense attorney, “and most doctors don’t know anything about it. When the doctor’s assigned lawyer tells him to bail out and settle, he should know if the guy’s really trying to protect him from a big jury verdict, or if he’s primarily motivated by economic pressure from the insurer.”



Related posts:

  1. How malpractice attorneys decide which cases to accept
  2. Malpractice: Fight or settle?
  3. When malpractice attorneys turn up dead
  4. Malpractice defense lawyers: Do they lead physicians astray?
  5. Canadian health care: At the expense of defense?
  6. The crapshoot of emergency medicine
  7. Midwives don’t carry malpractice insurance


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{ 7 comments }

1 KipEsquire August 4, 2006 at 3:32 pm

“The underlying problem is that defense attorneys really have two clients: the doctors they’re defending and the insurance companies that pay their bills.”

Any lawyer who thinks that way or acts on that premise risks permanent disbarment.

You only duty is to the client. End of discussion. (Well, you also have a duty to the courts to prevent abuses. Oh, and a duty to the profession to uphold its ethical standards. We have oaths and codes, too, just like physicians.)

And if I were an insurance company’s supervisor of attorneys, I wouldn’t want anybody on the list who didn’t understand this. Otherwise the insurer might wind up needing its own defense attorney. Which hardly “cuts legal costs.”

2 Anonymous August 4, 2006 at 4:11 pm

Not to mention, you cannot settle a case without the consent of the client – ie the physician. Without their consent, no settlement.

However, physicians, who don’t like to take responsibility for anything, are even shifting the burden of their decision to settle to someone else.

What a cowardly group.

3 Greg P August 4, 2006 at 9:00 pm

The question is, who is the client?
For some insurers, they tell you up front when you get insurance from them that they are the client and when they decide to settle, you settle, unless you want to hire your own attorney.

That is why others have as a selling point that they promise not to settle unless you want to settle.

4 Anonymous August 4, 2006 at 9:50 pm

The insurance companies and the physicians do not necessarily have opposing interests…it may be in the physician’s interest to settle the case for a value within policy limits to avoid a russian roulette scenario where he/she could be faced with a mgaverdict… granted, this does not frequently happen, but could be devastating if it does.
We should be discussing how to avoid lawsuits in the first place. Remember, always refer and overtest these American animals…order labs, psa, and refer like crazy…any abnormal lab value or test should lead to more referrals and tests until the animal dies from the procedure or they are lost to followup in which case you document that as well. Always have a mechanism in the office whereby your staff recalls the patient when they haven’t been in for a while or haven’t followed up on an abnormal lab/imaging study. This is usually the form of a letter being mailed to the patient saying “You have not followed up on mammogram, abnormal blah blah blah, etc as we advised previously…”

5 Anonymous August 4, 2006 at 11:04 pm

Crazy doc it is time to go nite nite.

6 Greedy Trial Lawyer August 5, 2006 at 4:55 am

Gosh, economic factors are infringing on the ability of the doctor to properly defend himself in a malpractice lawsuit.

That is particularly ironic because it is probably economic factors that caused the doctor to provide poor medical care in the first place. The number one medical publication in the U.S. is Medical Economics. Making every minute of practice produce maximum bucks has been the goal of the medical profession for some time in our country.

7 Anonymous August 7, 2006 at 10:09 am

Who gives a fuck? Just let the Sodomites settle with each other, as long as it doesn;t hit your pocketbook. Why fight this bullshit system? As to the idea that settling a case will hurt your reputation as a doc, again, who gives a fuck? Maybe it’ll teach you it’s time to get out of your stupid raped specailty like Emergency medicine or OB-GYn and let women deliver babies in Mexico or something, who needs this lawyer bullshit, I can work at home selling porno movies online and I don’t have to deal with these lawyer assholes. Just remember, these lawyer assholes can’t put you in jail or take away your children just because you did your job and some poor scmuck had a bad outcome and can make a jury of your “peers” cry.

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