October 17, 2009
Hersch, O'Connell, & Viscusi Reply to Black, Hyman, & Silver on Early Offers Med Mal Savings
Joni Hersch (Vanderbilt), Jeffrey O'Connell (Virginia), and Kip Viscusi (Vanderbilt) have posted to SSRN Reply to the Effects of "Early Offers" in Medical Malpractice Cases: Evidence from Texas. Here is the abstract:
This article is a Reply to the critique by Black, Hyman, and Silver (BHS) of our 2007 Journal of Legal Studies article, “An Empirical Assessment of Early Offer Reform for Medical Malpractice.” The early offer reform gives insurers the option of making an early offer that will expedite payment of claimants’ economic losses and reasonable attorney fees. Using data on closed medical malpractice claims from the Texas Department of Insurance (TDI), our 2007 article estimates the financial impact of this proposal by comparing the expected payments to claimants under the early offer reform to the payments under current tort rules. A central component of our calculation of expected payments is unique information on insurers’ reserves associated with the claim; actual payments are reported in the TDI data for all litigated and settled cases involving payments of at least $10,000. The BHS article misrepresents fundamental aspects of our empirical analysis, including the following. BHS set out to correct our purported “false assumption” that all claims have a 1.0 probability of success, which is a problem that arises because BHS omit the probability of claimant success from the formula that is presented in our paper. BHS’s error is compounded as their discussion of our paper fails to recognize that our use of reserve amounts in the analysis incorporates the insurers’ estimates of the likelihood of claimant success, Indeed, they neither acknowledge our use of the insurer reserve data, nor do they use the insurer reserve information in their paper. BHS claim incorrectly that our analysis does not discount deferred payments whereas in fact it does. Our early offer analysis uses data for both litigated and settled claims, avoiding the selection bias and measurement error problems associated with BHS’s extrapolation from the 2% of paid claims that are litigated to the universe of all settled and litigated claims. In addition to these and other errors in their characterization of our empirical analysis, the BHS article reflects a misunderstanding of the operation of the early offer reform, which leads them to erroneous statements regarding how the parties would behave if the early offer reform were implemented. We also provide a brief critique of the BHS two-sided version of the early offer proposal, which would not be workable and would not reduce litigation costs significantly.
My post on the Black, Hyman, & Silver article (with a link to it) is here.
October 16, 2009
Personal Injury Roundup No. 54 (10/16/09)
Reform, Legislation, Policy
- U.S. Supreme Court dictum on constitutional implications of class action procedure (Drug & Device Law)
- The Pop Tort on the Texas med mal system (The Pop Tort)
- Ralph Nader on the CBO's report that tort reform would save $54 B over 10 years (Counter Punch)
- Malpractice alleged in death of H1N1 patient in Spain. (Typically Spanish)
Trials, Settlements and Other Ends
- PA: Jury awards $2.36 M to a boy kicked by a horse during a charitable program. Walter Olson is concerned about the effects on the charity, Work to Ride Inc. (Olson/Overlawyered)
- Woman sues physician and loses med mal case; then woman sues her attorneys and loses legal malpractice case. Finally, she wins in dispute that $6K of legal costs were frivolous. (ABA Journal)
- GlaxoSmithKline loses Paxil suit (Krauss/Point of Law)
- NY: Pain-and-suffering verdict in traumatic brain injury of $1.9 M affirmed on appeal for 79-year-old woman struck by bus. (Hochfelder)
- In 1975, NH set up a fund to fill a gap in med mal liability insurance. Now it argues the fund has a $110 M surplus and claims it is entitled to the money. The state supreme court gets the case this week. (Forbes)
October 15, 2009
Monday's Guest Blogger: Martha Chamallas
Martha Chamallas is the Robert J. Lynn Chair in Law at The Ohio State University's Moritz College of Law. She is a leading scholar in a number of fields, including torts, employment discrimination law, and legal issues affecting women. Professor Chamallas is the author of two books and more than 40 articles and essays in law journals such as the Michigan Law Review, the University of Pennsylvania Law Review, the University of Chicago Law Review, UCLA Law Review and the Southern California Law Review. She is a member of the American Law Institute, Torts Consultative Group and has participated on Gender and Race Bias Task Forces for the states of Iowa and Pennsylvania.
Following graduation from law school, Professor Chamallas clerked for the Honorable Charles Clark of the U.S. Court of Appeals for the Fifth Circuit and served as an attorney for the U.S. Department of Labor, Office of the Solicitor, Civil Rights Division.
Prior to joining Moritz College of Law in 2002, Professor Chamallas served on the faculties of the University of Pittsburgh School of Law, the Louisiana State University Law Center and the University of Iowa College of Law. She has held distinguished visiting positions at the Washington University School of Law, Richmond School of Law, the University of Ghent and Suffolk University School of Law. She also served as the Chair of the Women's Studies Program at the University of Iowa.
Professor Chamallas was the recipient of Ohio State's University Distinguished Lecturer Award in 2006.
October 14, 2009
"Hold Your Wee for a Wii" Closing ArgumentsCoverage is here. The plaintiffs' attorney asked for $24 to $34 million, about $2 million of which is based on economic harm, the balance in emotional harm.
O'Connell & Born on Early Offer Savings for Products Liability
Jeffrey O'Connell (Virginia) and Patricia Born (Florida State Business) have posted to SSRN The Similar Cost and Other Advantages of an Early Offer Reform for Products Liability Claims for Personal Injury Compared to General Liability Claims Therefor. Here is the abstract:
An “early offers” program in which product liability lawsuits could be quickly settled would improve a tort system that is often slow, expensive and unfair.
Under the authors’ early offer reform, a defendant facing a personal injury claim is given the option within 180 days after a claim is filed of offering to guarantee periodic payments for a claimant’s medical expenses and wage loss beyond any other applicable coverage, plus 10 percent for attorneys’ fees. There would be no compensation for pain and suffering. The claimant in return agrees to foreclose further pursuit of a normal tort claim for both economic and non-economic losses.
Offers could be turned down by claimants, but only in cases where the defendant’s injurious acts were the result of gross misconduct provable beyond a reasonable doubt.
The early offers plan would reduce the time it takes to pay losses by at least two years, and also greatly reduce the costs of such claims. Claims for product liability, would be cut by an average of approximately $129,105 per claim and by $563,000 per claim for severe injuries. The early offers plan is projected to save an average of approximately $33,000 in legal expenses in all such cases and about $207,000 in cases of severe injury.
The savings come mainly from eliminating pain and suffering damages and reducing legal fees.
CBO: Med Mal Tort Reform Would Save $54 B Over Ten Years
The Congressional Budget Office estimated that a $500,000 cap on punitive damages and a $250,000 cap on pain-and-suffering damages would save $54 billion over ten years and lower liability insurance premiums by 10%. (CNN) The Center for Justice & Democracy is not impressed. (The Pop Tort)
October 13, 2009
Zicam MDL Centralized in Arizona
Pursuant to an order issued last Friday, nine pending Zicam suits have been consolidated for pre-trial proceedings before U.S. District Judge Frederick J. Martone of the U.S. District Court for the District of Arizona. The consolidated cases involve claims that Zicam caused users to lose their sense of smell or taste. About Lawsuits has more.
October 12, 2009
Guest Blogger John Oberdiek on "Corrective Justice and its Independence as an Ideal"
Although Aristotle first distinguished the two ideals more than 2300 years ago, the relationship between corrective and distributive justice has been the topic of a good deal of discussion in recent years. Indeed, I just returned from a roundtable on tort theory where the relationship was debated at length. Larry Alexander, Jules Coleman, Stephen Perry, Ronen Avraham and Issa Kohler-Hausmann, Kevin Kordana and David Tabachnick, and Steven Walt, among many others, all have written about the relationship between corrective and distributive justice. Why has that relationship been thought to be so problematic?
In “Causation and Corrective Justice: Does Tort Law Make Sense” (pdf), for example, Alexander maintains that “[c]orrective justice as an independent, non-derivative principle of justice is…impossible to square with principles of distributive justice because the two types of justice have completely coextensive domains.” (p. 6). Faced with the choice between corrective and distributive justice, he believes that corrective justice must be rejected because distributive justice is “logically prior to corrective justice” insofar as “there must be a distribution relative to which loss and compensation are measured” (p. 7). What I wish to offer here are some thoughts on how corrective justice might vindicate its independence as an ideal with its own normative force.
As an initial matter, even if Alexander is right both that corrective and distributive justice have co-extensive domains of application and that the two sets of principles can therefore conflict, the conjunction of those facts, accepted arguendo, poses no problem for either principle of justice. Reasons of justice, whether corrective or distributive, are certainly important normative reasons, but they are nevertheless just reasons. They can therefore stand in all of the myriad relationships that other normative reasons can stand in with respect to other normative reasons: they can outweigh as well as be outweighed and silence as well as be silenced, for example, all depending on the circumstances. Reasons of corrective and distributive justice are not all-things-considered final judgments of what must be done, but (admittedly important) elements in an all-things-considered final judgment. As general conflicts of reasons are ubiquitous, it should not be surprising that reasons of justice themselves can conflict – it is widely recognized, after all, that justice can conflict with other values, like beneficence and mercy. Such conflicts, though, are never evidence that one of the conflicting reasons must really be an imposter and not really a reason at all. And so, it seems to me, there is no embarrassment in admitting that reasons of corrective and distributive justice can conflict.
What is likely really doing the work in Alexander’s argument, then, is the priority of distributive justice. If distributive justice is in some sense prior to corrective justice, how can corrective justice generate any non-derivative moral reasons of its own? The problem on this reading isn’t so much the conflict itself between reasons of corrective and distributive justice, but the fact that reasons of corrective justice are only bona fide reasons if they do not conflict with those of distributive justice, on which they depend. Coleman captures the thought nicely in "Risks and Wrongs": “[I]f corrective justice provides moral reasons for repairing a loss, then the underlying claims sustained by corrective justice must themselves express requirements of distributive justice….[T]his relationship appears to rob corrective justice of its moral independence.” (p. 348).
Towards both characterizing and solving the puzzle of corrective justice, consider an analogy with the duty to obey the law. Where a state’s laws are just and the persons under the state’s dominion are responsive to moral reasons, the duty to obey the law is either epiphenomenal or non-existent, depending on how one understands the duty to obey. It is epiphenomenal, like a shadow, if one understands the duty loosely, because where the law is just one would already be morally required to do as the law commands. It is non-existent if one understands the duty to obey strictly, as on Joseph Raz’s influential view, for it would be wrong to obey just law, following it merely because it is the law – one ought instead to conform to just law, following it because it is just. The puzzle with corrective justice is analogous: where distributive justice obtains, reasons of corrective justice are either entirely epiphenomenal, adding nothing to antecedent reasons of distributive justice, or non-existent, because the reasons anyone would have would simply be those of distributive justice. The puzzle of corrective justice therefore appears to be analogous to that of the duty to obey the law: the independent power of corrective justice seems to be circumscribed by prior norms of distributive justice, much as the duty to obey the law is circumscribed by prior duties of morality.
Might the solution to the puzzle of corrective justice also be analogous? Even though Raz denies that there is a general obligation to obey the law, he accepts that there can be a piecemeal one where a particular law is either modestly unjust or simply not just; the duty to obey can carry citizens over rough patches of low-grade injustice and also direct them to act in cases where there is no antecedent moral reason, as with coordination or regulatory problems. Perhaps corrective justice serves a similar role. First, corrective justice and the value of personal accountability that it embodies may be important enough in its own right to carry citizens over rough patches of low-grade distributive injustice. This would help answer Coleman’s doubt that corrective justice’s dependence upon distributive justice “greatly reduces [corrective justice’s] potential as a principle underwriting our current legal practices, practices that do not require that underlying entitlements protected by law meet the strictest test of justice” (p. 348). Second, corrective justice also may be able to direct people to act where distributive justice itself is indeterminate. This would afford corrective justice a robust independence, for as Perry points out in “On the Relationship Between Corrective and Distributive Justice,” plausible theories of distributive justice are simply too dynamic to be able to issue guidance about specific duties at any given moment. Corrective justice therefore seems to have enough independence from distributive justice to allay any deep worries about its ability to be a non-derivative ideal, and of course to keep us from embracing eliminativism about corrective justice and thus tort law.
Associate Professor of Law
Co-Director, Rutgers Institute for Law and Philosophy
Rutgers School of Law - Camden