Malpractice judgements? Who pays?

[forchinet121]

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So I was curious about this, I’m looking into a few jobs and they generally cover malpractice in the amounts of 1M/3M something like that. I’m wondering what happens if you have a case and the judgment is like 65M? Are you on the hook for 62 million dollars?

Record Verdict in Psychiatric Malpractice Case

Record $77.7 Million Verdict in Psychiatric Malpractice Case Congratulations to our new law partner, Natalie Woodward, on her $77.7 Million Verdict in a psychiatric malpractice case on August 30. This is a fair and just result in an extremely hard-fought case. The jury got the case yesterday...

warlawgroup.com

 

[allantois]

Lawyers are disgusting and generally contribute nothing to society

 

[nexus73]

So I was curious about this, I’m looking into a few jobs and they generally cover malpractice in the amounts of 1M/3M something like that. I’m wondering what happens if you have a case and the judgment is like 65M? Are you on the hook for 62 million dollars?

Record Verdict in Psychiatric Malpractice Case

Record $77.7 Million Verdict in Psychiatric Malpractice Case Congratulations to our new law partner, Natalie Woodward, on her $77.7 Million Verdict in a psychiatric malpractice case on August 30. This is a fair and just result in an extremely hard-fought case. The jury got the case yesterday...

warlawgroup.com

IANAL, but yes potentially on the hook. This is why some doctors spend a fair amount of money in asset protection through foreign investments and corporate or trust structures to make their money inaccessible in the case of a lawsuit. Knock on wood, I think in psychiatry the likelihood of a lawsuit above policy limits is extremely low so the cost of asset protection probably isn't worth it. Splik has said this before I think.

In reality what can happen is following the loss, the doctor and their malpractice agree to settle for policy limits (1 million probably). Many plaintiffs will take this because they get the money immediately. If they don't take it the defendant doctor will likely file appeals which delays the award going to the plaintiff, but also raises real risks that the award gets lowered or the case gets sent back for retrial and the plaintiff ends up with nothing. Remember, the lawyer gets paid when the plaintiff gets paid, they get nothing for the first trial win, and if they lose appeals or a retrial, or the award is drastically lowered, the lawyer gets paid out based on the final outcome. So the lawyer may be motivated to convince their client to take the money now as a bird in the hand.

That being said, there are cases where doctors lose cases above policy limits and are on the hook for the extra, which typically comes out of their future earnings. Which is a scary thought.

 

[nexus73]

This is text from an NBC news article about the case:
"Lawyers for MARR wrote in a court filing that a doctor discontinued Carusillo’s lithium treatment after he complained of side effects. Carusillo knowingly violated multiple rules at the facility and had been told that he would be discharged for any further violation, they wrote. The next morning, facility staff discovered he had a cellphone. During a phone conference with facility staff and his parents, Carusillo refused to go to a more intensive treatment facility and only agreed to go to a sober living house, the filing says."

Family awarded $77M in wrongful death case against addiction treatment center

Days after he was abruptly discharged from the center over a cellphone violation, Nick Carusillo was hit by multiple vehicles on a Georgia interstate.

www.nbcnews.com

 

[surfguy84]

Or just practice in a state that caps judgements

 

[calvnandhobbs68]

Lawyers are disgusting and generally contribute nothing to society

I hate malpractice lawyers as much as the next guy but that's a pretty broad brush buddy. Hope you don't say that to your lawyer next time you need one for real estate, estate planning, negotiating a contract, etc. A functioning enforceable legal system is pretty much the cornerstone of any functional society. Lawyers are a necessary part of this system.

My understanding is also that lawyers generally end up settling for malpractice insurance caps even with huge judgements. The big judgement is also so they can go after the facilities malpractice insurance, which generally has a much higher cap too than the individual doctor's insurance.

This is text from an NBC news article about the case:
"Lawyers for MARR wrote in a court filing that a doctor discontinued Carusillo’s lithium treatment after he complained of side effects. Carusillo knowingly violated multiple rules at the facility and had been told that he would be discharged for any further violation, they wrote. The next morning, facility staff discovered he had a cellphone. During a phone conference with facility staff and his parents, Carusillo refused to go to a more intensive treatment facility and only agreed to go to a sober living house, the filing says."

Family awarded $77M in wrongful death case against addiction treatment center

Days after he was abruptly discharged from the center over a cellphone violation, Nick Carusillo was hit by multiple vehicles on a Georgia interstate.

www.nbcnews.com

Yeah this on the face seemed like a ridiculous case but on details it sounds like someone may have peeled off lithium (despite family and outpatient therapist urging them not to which was likely a nail in the coffin) on a bipolar patient and not replaced it with anything, then as he deteriorated dinged him for rule violations and discharged him still off lithium or any replacement mood stabilization. Sounds like he likely got more manic and disappeared until he lay down naked in the middle of a highway with a clean post mortem tox screen....so yeah not a good look, not saying they should be on the hook for 77 million dollars but not really good care either.

 

[allantois]

I hate malpractice lawyers as much as the next guy but that's a pretty broad brush buddy. Hope you don't say that to your lawyer next time you need one for real estate, estate planning, negotiating a contract, etc. A functioning enforceable legal system is pretty much the cornerstone of any functional society. Lawyers are a necessary part of this system.



Yeah this on the face seemed like a ridiculous case but on details it sounds like someone may have peeled off lithium (despite family and outpatient therapist urging them not to which was likely a nail in the coffin) on a bipolar patient and not replaced it with anything, then as he deteriorated dinged him for rule violations and discharged him still off lithium or any replacement mood stabilization. Sounds like he likely got more manic and disappeared until he lay down naked in the middle of a highway with a clean utox....so yeah not a good look, not saying they should be on the hook for 77 million dollars but not really good care either.

You need a lawyer for all those things because they created the convoluted legal system that one cannot navigate without involving them. They do not in fact contribute anything to the economy but extract rent from productive sectors of the economy. Our legal system is a joke

 

[wolfvgang22]

The link says "A high-low was entered into with the doctor immediately after closing arguments." So like Nexus73 wrote, the plaintiff probably settled with the doctor's malpractice insurance carrier for a much, much smaller amount. I bet since Metro Atlanta Recovery Residences didn't settle they will appeal, probably blame the doctor whose insurance already signed a settlement agreement, and end up paying much less. I think this is a lot of rah-rah stuff on the attorney's website for marketing. It isn't over yet and probably won't be for a long time.

 

[Merovinge]

There are rare cases of malpractice suits exceeding policy limits to the point of a doctor needing to declare bankruptcy, but as far as I am aware the number of those cases are extremely small and there are still protections in many states for all your retirement accounts (401k, IRA, etc), you kid's 529s (not technically your money), and in tenants by the entirety state your whole primary residence is covered.

My partner and I actually decided to own our house outright instead of take out a mortgage despite this likely costing us quite a bit of money in compound interest compared to a broad based index fund for this reason (and not dealing with mortgage's does have a substantial benefit from the actual house purchasing side of things). It just helps us sleep at night that a lawsuit would not wipe us out without any fancy off shore trusts or weird asset protection things.

 

[b52bomber]

IANAL, but yes potentially on the hook. This is why some doctors spend a fair amount of money in asset protection through foreign investments and corporate or trust structures to make their money inaccessible in the case of a lawsuit. Knock on wood, I think in psychiatry the likelihood of a lawsuit above policy limits is extremely low so the cost of asset protection probably isn't worth it. Splik has said this before I think.

In reality what can happen is following the loss, the doctor and their malpractice agree to settle for policy limits (1 million probably). Many plaintiffs will take this because they get the money immediately. If they don't take it the defendant doctor will likely file appeals which delays the award going to the plaintiff, but also raises real risks that the award gets lowered or the case gets sent back for retrial and the plaintiff ends up with nothing. Remember, the lawyer gets paid when the plaintiff gets paid, they get nothing for the first trial win, and if they lose appeals or a retrial, or the award is drastically lowered, the lawyer gets paid out based on the final outcome. So the lawyer may be motivated to convince their client to take the money now as a bird in the hand.

That being said, there are cases where doctors lose cases above policy limits and are on the hook for the extra, which typically comes out of their future earnings. Which is a scary thought.

Have the name for anyone who does asset protection in this manner?

 

[michaelrack]

There are rare cases of malpractice suits exceeding policy limits to the point of a doctor needing to declare bankruptcy.

You can't get rid of a court judgement with bankruptcy

 

[forchinet121]

You can't get rid of a court judgement with bankruptcy

So you’re just simply screwed?

 

[michaelrack]

So you’re just simply screwed?

No. Just that bankruptcy won't help. When I filed bankruptcy (for not being able to pay business debt), it was after I had been sued by one of my creditors, but before any judgements

 

[GUH]

You can't get rid of a court judgement with bankruptcy

Most kinds of debt, including most malpractice lawsuit judgments, are dischargeable in bankruptcy.

Ask a Lawyer: Can Bankruptcy Clear Lawsuit Judgments?

This FindLaw article explains when bankruptcy can discharge lawsuit judgments.

www.findlaw.com

The question then becomes what type of bankruptcy to file. As a physician, you will not pass the means test for a Chapter 7 bankruptcy. With a multimillion dollar debt, you will be above the unsecured debt limit for a Chapter 13 bankruptcy.

 

[Jules A]

WCI wrote a book on asset protection. It is ok. It made me feel less worried in some ways but not happy that my state's homestead law is severely lacking unless jointly titled.

Book: Guide To Asset Protection

Written by practicing emergency physician and creator of the most visited doctor-specific personal finance and investing website in the world, James M. Dahle, MD, The White Coat Investor's Guide to Asset Protection is a high-yield, no-nonsense manual that walks doctors and other high income...

shop.whitecoatinvestor.com

 

[michaelrack]

Most kinds of debt, including all most malpractice lawsuit judgments, are dischargeable in bankruptcy.

Ask a Lawyer: Can Bankruptcy Clear Lawsuit Judgments?

This FindLaw article explains when bankruptcy can discharge lawsuit judgments.

www.findlaw.com

The question then becomes what type of bankruptcy to file. As a physician, you will not pass the means test for a Chapter 7 bankruptcy. With a multimillion dollar debt, you will be above the unsecured debt limit for a Chapter 13 bankruptcy.

I guess I was wrong about judgements being nondischargeable. I was able to file chapter 7 in 2015 because my business debt (primarily business loan guarantees and guarantees on equipment lines of credit, as well as some equipment lines of credit being in my name) was much more than my personal debt (primarily mortgage). I was advised to file for bankruptcy in April 2015, after I was sued for a defaulted lease on sleep study equipment (that I no longer had any access to). I was told that I should file before there was a judgement, but I guess that situation was more complex than the typical bankruptcy. Forbes on-line did an article on the bankruptcy of the medical company that I was a minority owner of (and whose bankruptcy eventually led to mine): Denman Creates Confusion For Bankrupt Debtor's Interest In LLC

I guess I am now a small footnote in bankruptcy law,