Impact of New Legislation On Joint & Several Liability With Respect To Medical Malpractice Cases

1. Impact of New Legislation On Joint & Several Liability With Respect To Medical Malpractice Cases Tuesday, July 26, 2011 9:00 a.m. – 12:00 a.m. Radisson Warwick Presented by: Clifford A. Rieders, Esquire Past President, Pennsylvania Association for Justice & Member, Patient Safety Authority Rieders, Travis, Humphrey, Harris Waters & Waffenschmidt 161 West Third Street P.O. Box 215 Williamsport, PA 17703-0215 Phone: 570-323-8711 Fax: 570-567-1025 Email: crieders@riederstravis.com www.riederstravis.com

2. We will Explore the Following: • 1.1 Multiple defendant physician 1.2 Physicians employed by hospitals 1.3 Physician and hospital defendants • Examination of the Bill • Settlement • Releases • Medical Malpractice and Non-Medical Malpractice Cases 2

3. Multiple Defendant Physicians Should be no charge since with primary coverage Mcare coverage each physician is going to be insured for $1 million. Query: $2 million verdict against doctors D1 and D2. Jury apportions 59% against D1, which is $1,180,000. You will collect $1 million. You will not collect $180,000 against D2 that was apportioned against D1. The amount you collect against D2 will be $820.000. Plaintiff therefore will be left holding the bag for $180,000. D1 benefitted by only being 59% responsible instead of 60%. You can work the numbers other ways to see how, as in any other joint and several situation, plaintiff is affected. 3

4. Physician Employed by Hospital Vicarious liability, and that should not be affected. 4

5. Physician and Hospital Defendants Same scenario as with multiple defendant physicians although exaggerated because typically cases against hospital defendants have smaller percentages of liability than against the individual physicians. Therefore, temptation to sue more people to make sure there is more coverage. 5

6. Intentional Misrepresentations Does this ever occur in a medical liability case? May occur with respect to misrepresentations concerning treatment. But see 40 P.S. 1303105, provider not a warrantor or guarantor. Must be a contract in writing. 6

7. Mcare Act 40 P.S. § 1303.501, et seq. Aphysician may be held liable for failure to seek a patient’s informed consent if the physician knowingly misrepresents to the patient his or her professional credentials, training or experience. 504(d)(2) Was a reversal of Duttry v. Patterson, 771 A.2d 1255 (Pa 2001). 7

8. Act 17 holds joint and several liability will apply when there is an intentional misrepresentation. Would this be covered under the Mcare Act 504 (d)(2)? 8

9. 505 of the Mcare Act Punitive damages may be awarded for conduct based upon willful or wanton conduct or reckless indifference to the rights of others. Punitive damages may be permitted in vicarious liability claims where it can be shown by a preponderance of the evidence that the party knew of and allowed the conduct by its agent that resulted in the award of punitive damages. § 505(c) 9

10. Mcare Act, § 511(c) – Alteration of Records In any medical professional liability action in which the claimant proves by a preponderance of the evidence that there has been an intentional alteration or destruction of medical records, the court in its discretion may instruct the jury to consider whether such intentional alteration or destruction constitutes an adverse inference. 10

11. Do alteration of records provide a separate cause of action? This may be crucial as to whether joint and several liability applies in such cases. 11

12. Are Sexual Abuse Cases Intentional Torts? Scenario #1 – Real case; where doctor treated his nurse as a patient and said she required sexual intercourse to relax her and ultimately he forced himself on the patient. Scenario #2 – Himalayan Institute case. Tried in Scranton with a punitive damage result. Patient goes to Himalayan Institute to see Swami. Himalayan Institute offers medical care and doctors. Patient treated for knee problems and Swami has inappropriate sexual contact with patient. Sued were the Himalayan Institute, the Swami, and the physicians. 12

13. Contribution Greater likelihood of contribution claims by doctors or hospitals against other defendants? 13

14. Phantom Parties? If a plaintiff settles with any defendant or enters into any release with any non-defendant, there may be apportionment of liability upon appropriate request and proofs. 14

15. A Change In The Law? It can be argued that this is not a change from current law where there may be an apportionment of liability with respect to a settling defendant. Whether that also applies to non-parties with whom there has been a settlement is an open question. 15

16. Admissibility of Responsibility “An attribution of responsibility to any person or entity as provided in this subsection shall not be admissible or relied upon in any other action or proceeding for any purpose.” What does that mean? Is this intended to provide that collateral estoppel or res judicatais no longer applicable to a party found liable or with whom there has been a settllement? 16

17. Enhanced Importance of Vicarious/Ostensible Liability Plaintiffs with significant damages will have to work harder in their cases against physicians employed by hospitals or physicians employed by any entity where there is a vicarious liability. 17

18. Individual Doctors Personal Assets On The Line? Without question, the statute will place sole practitioners in the position of greater jeopardy with respect to their personal assets. Attorneys will have a greater incentive for suing physicians individually and keeping those judgments on file indefinitely where excess verdicts are obtained. 18

19. Corporate Parties Physician hospital groups and hospital defendants will find themselves under greater scrutiny in serious damage cases. Unfortunately, discovery in corporate cases, unlike vicariously liable defendants, is severely limited by Pennsylvania Peer Review Protection Act and other statutes in making discovery against corporate defendants very difficult. 19

20. Settlement In terms of settlements, some argue the statute will make settlements more difficult. It will be important when settling a case to try to obtain an agreement as to whether the non-settling defendants intend to try to prove the case against the settling defendant. 20

21. Clutches of Hospitals Undoubtedly the law will drive doctors into the clutches of hospital employment just to protect their own assets. That was one of the motivations behind the Hospital Association of Pennsylvania so strongly supporting the legislative defendant. 21

22. Coverage The virtual abolishment of joint and several liability in most circumstances will cause carriers and individual physicians to revisit obtaining only a total of $1 million coverage. Currently the primary limit is $500,000 and the Mcare portion is $500,000 of insurance coverage for medical liability claims. 22

23. Mcare Response How will Mcare react? There are those who argue that Mcare will simply use the virtual abolishment of joint and several liability as an excuse not to settle cases. 23

24. Releases A well insured defendant or one with assets, who does not possess a large share of the liability, is less likely to make a payment upon the “risk” factor associated with joint and several liability. 24

25. Settlement Strategy In the new scenario, if a case is worth $1 million and a plaintiff thinks they have a 10% shot against D-2, they can simply demand $100,000. Since the law declares that a party with less than 60% responsibility cannot be a joint tortfeasor, the plaintiff will retain the benefit of the bargain. 25

26. Giant Eagle Implications The potential advantages of a Giant Eagle settlement are gone. Jury verdict of $100,000. Settling defendant was only 25% at fault, and non-settling defendant was 75% at fault. Settling defendant owes no more money to the plaintiff, and non-settling defendant owes his share of the verdict, $75,000. The plaintiff ends up with $115,000 ($40,000 in settlement from settling defendant prior to trial, and $75,000 from non-settling defendant). Settling defendant gets no money back as a result of “overpaying” i.e., paying $40,000 where the jury would have only made settling defendant pay $25,000. The non-settling defendant gets no reduction in what he has to pay even though his full payment will result in the plaintiff receiving a “windfall” of $15,000 beyond the jury verdict of $100,000. This is the “good bargain” joint tort. 26

27. Pro TantoReleases Pro tanto, dollar for dollar, releases are very rare since defendants normally would never agree to them. The defendant did not want to be exposed to a potential claim for contribution if the non-settling defendant ended up paying more than its percentage share of the verdict. Without joint and several liability, the non-settling defendant will never pay more than its percentage share. The exception is where the non-settling defendant is more than 60% at fault. 27

28. Pro Rata Releases Pro rata language only becomes necessary under the common law because without it, the settling defendant had to worry about being liable for contribution if the non-settling defendant paid more than his “rightful” share. That should no longer be an issue. 28

29. Medical Malpractice and Non-Medical Malpractice Cases In order to be joint tortfeasers, the court must examine whether the damages are overlapping or whether they are capable of being separated. Even the timing of the negligence is a factor the court will examine. A motor vehicle incident occurs on January 1st and causes a broken leg. A month later, when the doctor is removing the cast he renders the patient a paraplegic by his negligence. The doctor and the motorist may not be joint tortfeasors. If the damages are $3 million and the motorists insurance coverage is $15,000, it is to plaintiff’s advantage for the doctor and the defendant motorist not to be joint tortfeasors under Act 17. The paraplegia caused by the doctor is going to cause much greater damages than the broken leg caused by the motorist. But the causal negligence of the motorist may be over 60%. It is to the plaintiff’s advantage for these two parties not to be jointly and severally liable. Prior to the change in the law, the plaintiff would have wanted joint and several liability. 29

30. Scenario #2 The negligence of the defendant motorist and the hospital occur close in time and the damages caused by the defendant motorist is a head trauma and the hospital fails to diagnose a brain bleed. In this situation the damages may be difficult to separate. If there is joint and several liability and the motorist only has $15,000 in insurance, the plaintiff may be in a very precarious position if the liability of the defendant motorist is very strong, such as the case where the defendant motorist ran a red light. In this context, the plaintiff is going to try to argue that the defendant motorist and the hospital are not jointly and severally liable and that it is possible to segregate the damages from the failure to diagnose the brain bleed from the initial minor concussion caused by defendant motorist. 30

31. Precis` What is bad about this change in joint and several liability is that it is very harmful for the injured party where a defendant is impecunious, underinsured, or does not have assets and the plaintiff is very seriously hurt. The more damages a person suffers at the hands of a party who is not 60% liable, the greater advantage is reaped by the less than 60% liable due to the effect of the law. 31