North Carolina Trial Law Blog

So we all know that President Obama is talking about some type of Health Care reform in America.  I can tell you from years of representing those injured in car accidents, here in Raleigh and across the state of North Carolina, that we need some type of health care reform.  The folks that need coverage the most often can not get it.  And small businesses (even law firms) see their premiums rise EVERY YEAR.  My health insurance premiums for my firm have gone up nearly 10% every year for the past 8 years.

So as part of the political debate, Obama is talking about changing health insurance, but he is also talking about medical malpractice reform.  Some of my fellow trial lawyers are getting stirred up because we don't think that extending coverage of health care ought to also limit an injured person's access to justice.

Here are some links which discuss Obama's comments in the last few days:

Obama Talks Up Liability Reform
Politico
http://www.politico.com/news/stories/0609/23783.html
 
In Pitch to AMA, Obama Paints Mixed Picture
Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2009/06/15/AR2009061501744.html
 
Cost Concerns as Obama Pushes Health Issue
New York Times
http://www.nytimes.com/2009/06/16/health/policy/16obama.html?hpw
 
Obama Calls Cost of Healthcare a Threat to Economy
Chicago Tribune/LA Times
http://www.latimes.com/news/nationworld/washingtondc/la-na-obama-ama16-2009jun16,0,1354461.story
 
I tend to agree with the gist of the Politico article:  Obama has to keep all options on the table and speak in terms that ever player in the debate feels are near and dear to their interests.

I think the debate will be rational, and because of that I think that the data which show that very little of the overall cost of health care has anything to do with malpractice lawsuits will not be ignored.  There are things that can be done to decrease the cost of lawsuits.  Call it reform or not, that's up to you.

I commonly request that each side to a malpractice suit be limited in the number of expert witnesses who can be used on a certain subject.  Almost universally the lawyers for the Doctors will not voluntarily limit the number of expert witnesses.  This increases the costs to defend these suits.  There is one liability reform I'm fine with implementing.

Chris Nichols

I try to keep this Blog fairly apolitical, but during an election season that can be difficult.  My feelings about so-called "tort reform" are pretty clear:  it is generally a terrible idea that only hurts the truly innocent- people who have been hurt by someone else's negligence.

That said, where do Obama and McCain stand on Tort Reform?  I've tried to present the information below from the most unbiased sources I can find.

  John McCain on Tort Reform

Tort Reform

The American economy suffers from excessive litigation which increases the cost of doing business and slows economic growth. The Club for Growth supports major reforms to our tort system to restore a more just and less costly balance in tort litigation.

Senator McCain's record on tort reform is generally positive. These votes include:

• Sponsored the Class Action Fairness Act of 2005 which sought to curb lawsuits by shifting suits from state to federal courts, by requiring judges to review all coupon settlements, and by limiting attorneys' fees in non-cash settlements^[65]
• Voted for a bill that would bar lawsuits against manufacturers, distributors, dealers and importers of firearms^[66]
• Voted for a bill that would place caps on damage awards in medical malpractice suits against obstetricians and gynecologists^[67]
• Voted for a motion to proceed to a bill that would cap non-economic and punitive damages in medical malpractice suits^[68]

This generally positive record, however, is tarnished by Senator McCain's sponsoring of and outspoken support for the Patients' Bill of Rights,^[69] which encouraged an increase in the number of frivolous lawsuits filed against healthcare providers. He also voted against the Litigation Uniform Standards Act, which limited the conduct of securities class actions under state law.^[70]

And for what it is worth, here is a transcript from a Rush Limbaugh Radio Show where Rush refers to the above website in order to assess McCain's willingness to implement tort reform.  Rush seems to agree with the above- McCain has a good start but could do even better on tort reform.

"John McCain has been a leading proponent of lawsuit reform at the federal level. He recently authored the Y2K law that will help limit potential frivolous lawsuits resulting from the Y2K computer problem while also protecting the rights of those truly injured to bring a legal action. The bill addresses the needs of businesses that may find themselves as both plaintiff and defendant, by providing incentives to fix Y2K problems, not rush to the courthouse.

"John McCain has and will continue to fight to reform our nation’s product liability laws. He supports reforms that would establish a time limit on liability for most products and cap damages on small businesses. He has also worked to provide liability relief to small businesses by sponsoring legislation that limits punitive damages and eliminates joint liability for non-economic damages for small businesses that employ less than 25 people.

"John McCain also supports small business relief from 'Superfund' liability. He believes the law imposes too severe a penalty on small businesses. He supports changing the regulations to limit the liability of small businesses to the amount of pollution they directly caused to a site, and no more."  From Freedom Works

Back to 2007.  From a physician website, MedPage Today:

Arizona Sen. John McCain said tort reform is a top priority. He's supported caps on awards and expressed some support for a loser-pays rule. "We cannot let the search for high-quality care be derailed by frivolous lawsuits and excessive damage awards. … Liability reforms should eliminate lawsuits for doctors [who] follow clinical guidelines and adhere to patient safety protocols."

McCain laments increased costs stemming from defensive medicine. "In every other industry when technological advances are implemented, costs to the consumer decreases," he told supporters in South Carolina. "This is not the case in health care. … I can't tell you the number of tests that all of us in this room have taken just so that doctors won't be sued for malpractice."

And while this is not necessarily a "tort reform" issue, McCain supports changes to our health care system which would take most self-funded health insurance plans OUT of ERISA pre-emption.

The senator does suggest he would change current pre-emption provisions in the Employee Retirement Income Security Act, when he says he would "give states the flexibility to, and encourage them to experiment with: alternative forms of access; risk-adjusted payments per episode covered under Medicaid; use of private insurance in Medicaid; alternative insurance policies and insurance providers; and, different licensing schemes for medical providers."

ERISA adjustment is also implied by his call to "build genuine national markets by permitting providers to practice nationwide" and his proposal to "allow individuals to purchase health insurance nationwide, across state lines, to maximize their choices."

Obviously, in North Carolina, taking self funded health plans out of ERISA would have a "pro-plaintiff" benefit because self-insured entities would be subject to NC's anti-subrogation rule.  Clearly, this is an unintended consequence for our state.

Finally, according to AllBusiness.com, McCain has publicly lamented increased costs stemming from so called defensive medicine, where doctors allegedly over-cautiously order multiple tests in the hopes of avoiding any mistakes or liability. "In every other industry when technological advances are implemented, costs to the consumer decreases," he told supporters in South Carolina. "This is not the case in health care.... I can't tell you the number of tests that all of us in this room have taken just so that doctors won't be sued for malpractice."

Barack Obama on Tort Reform:

  As a lawyer and constitutional law expert, Obama has spoken favorably of civil litigators at times, but has also been noted in the press to be somewhat more critical of "trial lawyers." While campaigning for the Senate in Illinois years ago, he said, "Anyone who denies there's a crisis with medical malpractice is probably a trial lawyer." [Unsubstantiated info ahead] Furthermore, it has been noted that Obama voted in favor of caps on non-economic damages in medical malpractice cases when he served in the Illinois General Assembly. [NOTE: I pulled this quote from a business website doing a neutral review of the tort reform stances of the candidates.  It was old (pre-nomination) and fairly balanced.  Of course, there was no reference in the article.  I've been questioned on this now, so I'm trying to verify the so-called votes.  Frankly, I was suprised that Obama would vote for any type of cap given his Constitutional experience, so this could be my bad reporting compounding someone else's bad reporting.  Good thing I'm not a reporter!]

 

In 2005, Barack Obama voted for CAFA, the Class Action Fairness Act of 2005. Who voted against it? Hillary Clinton, Dick Durbin, Ted Kennedy, Pat Leahy, Joe Biden, Barbara Boxer and other progressive Democrats.  The Class Action Fairness Act was strongly supported by business groups like the US Chamber of Commerce.

The ABA describes CAFA in this way:

In a nutshell, the Class Action Fairness Act has two principal parts. One set of provisions establishes new procedural and substantive standards applicable to class action settlements. Some of these merely duplicate (or add little to) existing practice under the Federal Rules of Civil Procedure, but others — such as new limitations on attorneys’ fees in coupon settlements and requirements that government officials be notified whenever a class action settles — are brand new.

In addition to the CAFA bill, Obama has taken a position on medical malpractice tort reform which focuses on improvements in patient care and lower error rates.  In fact, Obama and Hillary Clinton co-authored an article in the May 25, 2006 issue of the New England Journal of Medicine, entitled "Making Patient Safety the Centerpiece of Medical Liability Reform."

In conjunction with the publication of their article, Obama and Clinton introduced and co-sponsored the National Medical Error Disclosure and Compensation (MEDiC) Act of 2005, a bill that, in part, would have required hospitals to disclose errors to patients and would have also created a national patient safety database. The bill further proposed to create a Department of Health and Human Services program that would seek early compensation for patients and offer liability protections to doctors in exchange for their disclosure of errors and apologies. This legislation was never realized and died in 2006.

The Last Frontier:  The Supreme Court of the United States

Other than the candidate platforms and positions, many would argue that the real "tort reform" is accomplished by appointing Judges who will take "tort reform" positions on legal cases.  Justice John Paul Stevens (88 years old) and Justice Ruth Bader Ginsburg (74 years old), are both considered to be left leaning and potentially ready to retire in the next four years.

About the Supreme Court, Obama has said in a July 7, 2007 speech  "We need somebody who's got the heart, the empathy, to recognize what it's like to be a young teenage mom. The empathy to understand what it's like to be poor, or African-American, or gay, or disabled, or old. And that's the criteria by which I'm going to be selecting my judges."

McCain has said, "I tell you I will nominate only people who have a clear, complete adherence to the Constitution of the United States and do not legislate from the bench. That's who I'll nominate to the U.S. Supreme Court."

This article will not attempt to futher address the issue of Supreme Court appointments, though obviously the candidates would presumably appoint Judges who agree with their general philosophy on the law.  Whether that position is "pro-consumer" or "tort reform" will be for the reader to decide.

I'll update this article as I find more information.  Obviously, John McCain has a long voting record, so there can be much more analysis of his voting positions than of Obama.  I may also try to take a look at the positions taken by Biden and Palin, although, again, Biden will have a much deeper record than Palin.

----Chris Nichols

Nichols Law Firm

As a personal injury lawyer in the state capitol, Raleigh, I hear a lot of "complaining" by physicians about "crazy lawsuits."  I always tell them (many of whom are friends) that malpractice lawsuits in North Carolina are either declining or at worst, holding steady. 

The main insurer for physicians, NC Medical Mutual, has just announced that they MADE so much money last year, they are issuing a refund to doctors.  And guess what?  This is NOT a result of tort reform.  We have had no major laws pass in our state which resulted in "savings."

In fact, based upon actuarial studies, the reality appears to be that when lobbyists for the insurance companies were screaming for tort reform, what they were doing behind the scenes was RAISING premiums for physicains to create what I would call a "manufactured problem."  The doctors' own insurance company was gouging them, and then asking them to donate money to "tort reform" causes, which of course, are insurance company lobby groups.

Looks like the physicians have finally reigned in their own insurance company by realizing that the "crisis", if there is one, is mostly in the minds (and wallets) of the insurance industry.

from the News and Observer

N.C. insurer to pay dividend
Medical Mutual will also pay off debt as drop in malpractice suits boosts profit

David Ranii, Staff Writer
The state's largest medical malpractice insurer says that fewer lawsuits filed against doctors will allow it to pay its policyholders a $3 million dividend -- its first dividend ever.
Raleigh-based Medical Mutual Insurance Co. of North Carolina said it posted a 7.4 percent increase in profit last year as the number of lawsuits filed against its policyholders fell to 298 last year. That's down from 326 in 2006.

In addition to paying the first dividend since the company was founded in 1975, Medical Mutual also plans to erase its $10 million in debt this year. And, over the next four years, it plans to refund $12 million in capital supplied by its policyholders in 2003 as part of a plan to shore up the company's finances and stabilize its premium rates.

In recent years the N.C. Academy of Trial Lawyers, whose members include the personal-injury attorneys who sue doctors for malpractice, has bashed Medical Mutual for charging rates that the lawyers' group labeled excessive.

Medical Mutual's CEO Dale Jenkins said the dividend and capital refund to shareholders demonstrates "we are a very good steward of the resources the [doctors] have provided to us. We recognize every day that it is their money."

Medical Mutual hasn't sought a rate increase from state regulators since 2005. The latest positive financial results will allow the insurer to hold rates steady again this year.

Medical Mutual's dividend will be in the form of a credit that physicians receive when they renew their policies, said Jenkins. The average credit will be about 5 percent of the annual premium for most of the 6,300 North Carolina physicians who are policyholders. Medical Mutual is a mutual insurance company that is owned by its policyholders.

"We're always glad to see a company ... able to give money back to its shareholders," said N.C. Insurance Department spokeswoman Chrissy Pearson.

Jenkins said the number of medical malpractice lawsuits has fallen nationwide. In addition, Medical Mutual has taken steps aimed at limiting lawsuits. The company has established stringent underwriting guidelines in order to avoid insuring doctors it considers high-risk, Jenkins said. "We do not take all comers," he said.

The company also sends out teams of nurses to assess doctors' practices and recommend ways to minimize risks, he said.

Profit last year totaled $26.1 million, up from $24.3 million in 2006, Medical Mutual reported. Assets increased by $44.9 million, to $416.2 million.

_______________________________________

Chris Nichols

www.NicholsTrialLaw.com

NC Lawyers' Weekly has provided a great link to an article that was run in the Winston-Salem Journal about contributory negligence laws in North Carolina. 

Contrubutory Negligence is an issue that people don't know or care about, until they face the problem themselves.  Basically, in NC, even if you are hurt by someone else's negligence, if the other person can prove you are just a little bit to blame for your injury, you are barred from any recovery.  That's right.  Someone else is 99.9% to blame, and you are barred from recovery.

Columnist Scott Sexton has written a series of excellent articles on the subject and really puts a human face on this convoluted and political issue.  I highly recommend reading these articles.

I'll also add this to the mix.  One of the problems with contributory negligence is that it is so often a bar to people seeking legal representation.  Lawyers who represent injured people know that they could spend years working on case and lose everything at trial simply because a jury felt the Plaintiff may have played some very small part in causing the accident.

Here are some the the previous articles by Sexton:

Contibutory Negligence: it's "an insurance company's dream "

"Never mind that Joshua was 7 years old and was within 3 feet of the curb, or that Logan was drunk and driving on the wrong side of the road. "By way of affirmative defense, Defendant Logan pleads the contributory negligence of the decedent Plaintiff Joshua Franklin Palomares-Beckles," wrote Rodney Guthrie, Logan's attorney. If a jury in North Carolina decides that you are even a tiny bit at fault in this sort of case, you are entitled to nothing under state law, under a concept called contributory negligence. "In general, I'd say contributory negligence is an insurance company's dream," said Walter Holton Jr., the attorney who filed the lawsuit on behalf of Beckles-Palomares. "

Wreck victim faces being victimized by outdated law

"After an automobile accident in New Hanover County involving his daughter, Ashley, a student at the University of North Carolina at Wilmington, Norris has become something of an expert on a legal concept known as "contributory negligence," an outdated and completely unfair area of insurance law used only here and in three other states. That leaves option C. "Our insurance company is also using the contributory-negligence law claim that Ashley is limited in what we can recover," Norris said.

'There is no lobby for the little people' in this state

"Just four states - North Carolina, Virginia, Alabama and Maryland - still hang on to the concept of contributory negligence, a relic from English Common Law. "

Scott Sexton
Email	Bio

This is a great YouTube video on the issue of "Tort Reform."

The video does a great job showing how giant corporations have twisted and distorted the truth about law suits in America simply to poison jury pools.  They do this so they can continue to deny responsiblity for wrong doing, and basically "save a buck" at the expense of injured people who have done nothing to cause their own injuries.

It's about 8 minutes long and worth the watch.

http://www.youtube.com/watch?v=h85j1vNxd8A

or

_____________________________

Chris Nichols

www.NicholsTrialLaw.com

To often, politics of the right and the left interfere with the stark reality of tort reform.  In the past decade or so, conservatives have used "tort-reform" as a political "wedge issue" and have spent multi-millions of dollars to turn the public, and juries, against all Plaintiffs.

The article below was written by a self-described conservative Christian physician who deeply questions the politics of taking away justice from injured people in the name of politics and for the goal of profitting "big business."

This shows me that people are seeing that fairness and responsiblity are truly non-partisan issues, and that lawsuits, in and of themselves, are not "all bad."  In fact, lawyers and lawsuits have often been all that stands between the public and harm.

Remember the Little Guy 
by Steven Hotze, M.D.

Shouldn't companies and individuals who cause you harm be responsible for the damages they inflict?
            
You are probably aware of the lawsuits in the 1970s against Ford Motor Company and its Pinto automobile. Because of poor design, rear end crashes often caused the Pintos gasoline tank to explode into flames. Over 500 drivers lost their lives and thousands more were severely burned. Ford knew about this problem and that it would only cost $11 per car to repair but determined it was cheaper to pay the lawsuit settlements than recall the vehicles. Incredibly, Ford put their profits above the safety of their customers.
            
Because plaintiff attorneys were willing to file lawsuits on behalf of these injured individuals and families on a contingency basis and fight the multi-billion dollar Ford Motor Company, Ford paid hundreds of millions of dollars in judgments. Ford was also criminally charged with negligent homicide for having knowingly sold unsafe cars.
            
These lawsuits against Ford were based on product liability law which holds businesses responsible for any injuries caused by their products. The Ford lawsuits and resulting settlements sent a strong signal to the automobile industry. Safer cars have been the result.
Over the past decade, the Republicans in the Texas Legislature have passed a series of bills which have limited the liability of large corporations when they are found by a jury to have caused injury to their employees or their customers. This has me concerned and it should have you concerned as well.
            
Who wouldnt want limited liability for their actions? This is especially true of some large corporations which place their financial interests above the well being of their employees and customers. 
            
Under current Texas law, it is hard to imagine that Ford Motor Company would have been required to pay out such a large amount of money in judgments as it did at that time.
            
Tort reform has dramatically limited the liability of businesses and individuals in Texas. The Texas Legislature has set limits on the amount that a business or individual can be required to pay in judgment to an injured party. No one likes the idea of frivolous lawsuits, but most individuals seem to agree that a remedy should be paid to an injured party commensurate with the damage.
            
Who does this current law benefit? It benefits the large corporations and the well financed who have deep pockets and the wherewithal to hire a bevy of defense attorneys.  Their financial risk for shoddy workmanship and unsafe products has been dramatically reduced.
            
What about the small business owner or the individual with modest means?  How will they afford the assistance of a lawyer to help them be fairly compensated for their losses?
            
As a physician and conservative, I have a healthy distrust for big government and big business. The conservative position requires accountability for actions. It appears to me that the pendulum for tort reform has swung too far in favor of big business.

Its time to remember the little guy.

by Steven Hotze, M.D.

_______________________

Chris Nichols

www.NicholsTrialLaw.com 

As I'm getting ready for a trial, I'm constantly reminded that the "reason the case is going to trial" has more to do with the defendant's insurance company than anything else.  It's frustrating as an attorney fighting for justice because I have the burden of proof for the "facts" of the case, but what the jury really needs to hear, I'm not allowed to tell them.

Why?  Well, the insurance industry has effectively "gagged" anyone from telling the jurors why the case is going to trial.  Typically, the reason for that is that the insurance company who pulls the strings on the defendant, WANTS the case to go to trial, because they know that for every case that goes to trial, 99 just give up, and the insurance company gets to pay less than what is "fair and just" as the rules require.

Here are some of the "hidden" rules and insurance practices that you only learn about after you've been hurt by someone else's negligence.

You Can Not Mention the Insurance Company at Trial

Under no circumstances can a Plaintiff mention the word “Insurance” in trial, even though the person who is being sued has insurance. You cannot mention Insurance, nor can your witnesses, including the doctors, police or anyone else who may testify for you. If you do, the judge will grant a “mistrial” and we will have to try the case over again.

NC Rule of Evidence: Rule 411. Liability insurance.

Evidence that a person was or was not insured against liability is not admissible upon the issue whether he acted negligently or otherwise wrongfully. This rule does not require the exclusion of evidence of insurance against liability when offered for another purpose, such as proof of agency, ownership, or control, or bias or prejudice of a witness. 

Insurance is available in at least 99% of all auto accident cases that go to trial. But, the insurance industry has lobbied the legislature so diligently that it has created a set of court rules that absolutely prohibits the lawyers representing injured people from telling the jury the truth that the little old lady in the defendant's chair has had no choice in whether she is sitting there or not. She cannot settle the case even if she believes you deserve everything you are asking for.

The insurance company is completely in control of how much to offer the injured person, whether to settle the claim or not, and what they should contest in the lawsuit. So, even if the little old lady sitting in the defendant's chair wanted to settle the lawsuit for the same amount as what the injured person is requesting, the insurance company won't offer the money.

In North Carolina, the Plaintiff has virtually no right to sue an insurance company for improperly denying a claim or delaying the payment of what is due. Again, effective political contributions, and legal maneuvering by insurers have resulted in these rules.

Its cheaper to deny the claim than settle.

Believe it or not, insurance companies have saved Billions of dollars since the mid 1990s, by improperly denying claims, and otherwise forcing litigation by paying far below the jury verdict average to settle claims. Frivolous defenses to legitimate claims have resulted in an increase in litigation, against people insured by these companies. This is part of a deliberate claim handling program implemented by McKinsey & Company, the same consulting firm that set up Enron's business model, at many of the nation's largest insurance companies. See "Record Insurance Profits" Article

But, in jury selection, jurors often mention that if the injuries are real, the case should have settled with the insurer. That is exactly what the insurance company is hoping for. It doesn't matter if they offered $0.50 on a claim worth $500,000. The jury will never know, because the lawyers are prohibited from ever mention the settlement negotiations during the trial.

McKinsey & Company counted on this when they told Allstate Insurance in the mid 1990's to quit treating people with “Good Hands” and instead treat them with “Boxing Gloves.” When Allstate forced more litigation and posted record profits, the rest of the insurance industry followed their lead. It is now standard operating procedure in the insurance industry to spend multiple times what a reasonable settlement would be to fight the claim, simply to prove to injured people and their lawyers that filing a claim for injuries is more trouble than it is worth. Read a Transcript of Anderson Cooper's Interview with one of Allstate's Victims

That is because the end result is that most lawyers will not take the cases, and people will not file the claims themselves. These improper denials have led to a huge spike in bankruptcies in the United States, the leading cause of which is an inability to pay for medical bills. So, when jurors turn injured people away, everyone but the person at fault, and their insurer pay for the damage. Instead, the jurors take the financial burden themselves through higher taxes to pay for the bankruptcy. For more, see the article entitled “In Tough Hands” in BusinessWeek.

My friend Roy Harmon from South Carolina (Health Plan Law Blog)posted an interesting article today about how "tort reform" has been successful in many states but now even businesses are beginning to feel the negative effects.  Of course, those of us who practice trial law have know for years that it is easy to find yourself on either side of the "v" as we say.  (In other words, if you pass laws that limit Plaintiff's ability to seek redress, you may very well find that if YOU have been wronged, your rights have been limited).

In the ultimate "what comes around goes around,"  lawyers who represent business interests are griping about how tough it is to get justice in business versus business cases.  The article also cites how, despite massive reforms, Medical Malpractice Insurance companies keep rasing rates, despite paying out fewer claims.  This once again proves the folly of limiting rights based upon political motivations.

Read Roy's Post "The Trouncing of Trial Lawyers"

Chris Nichols
Nichols Law Firm

Tort Reform is a Great Idea, Until YOU Get Hurt

You don't have to look very far on the Web to find websites devoted to eliminating your right to recover fair and just compensation for the carelessness of another individual.  Websites like Overlawyered try to convince everyone that almost every law suit filed is frivolous, and that every jury verdict is pushing the insurance industry and businesses toward bakruptcy. 

The Tortellini, "Bites of Law and Politics, with sauce"

Finally, a new website, The Tortellini , has been started by Stephanie Mencimer, a contributing editor of the Washington Monthly and a former investigative reporter for the Washington Post.

The Tortellini does a great job of debunking the myths of tort reform, and also highlights some of the personal injury lawsuits filed by the mostly Republican members of Congress who, in their "jobs" are constantly trying to eliminate the rights of other citizens to seek fair compensation.  Looks like these tort-reformers have no problem filing lawsuits when they think they have been injured.  Check out her section on Hypocrites.

Mercimer looks at the false propoganda and quickly and efficiently shreds it, revealing the truth behind the fiction of a "tort crisis" in America.  I encourage every consumer lawyer with a Blog or a Website to link to The Tortellini. 

---Chris Nichols

Link to Nichols Law Firm Website