Wednesday, March 31, 2010


I repeatedly hear complaints about the Health Care Reform that it didn't include anything touching on Tort Reform, with regard to Medical Malpractice. The generic complaint I hear is that frivolous lawsuits are driving up malpractice claims which in turn drives up the cost of medical care. The (Cliff's notes version) proposal, as was passed here in Texas, is that by capping damages for medical malpractice claims, fewer claims will be filed and thus health care will cost less.

This sounds logical on paper, however, it doesn't really address the problems. The first problem is that a case that goes to recovery, either by settlement or judgment by definition is not "frivolous," there was an actual injury that resulted in actual damages. The second thing that this does is, by limiting damages, you deny appropriate recovery for severely injured individuals - the man who goes in for a gall bladder removal who ends up losing both legs (happened to an A1C in California last year - but the airman couldn't sue, because he received the surgery by a military surgeon while on active duty) is unable to receive sufficient compensation to make up for the act that makes him or her an amputee.

When pressed for details on what qualifies as "frivolous," on more than one occasion I've been given the "McDonald's coffee case" as evidence of what the complainer means. The case is actually the case of Stella Liebeck, and there was really little frivolous about it (source - Lectlaw). While not going into to great a detail on this site, the gist of the story is that McDonald's had been sued 700 times over the 10 year period and the coffee was served well over the industry standard. Stella was not driving - she was a passenger and the car was standing on the shoulder while she attempted to pour in creamer. She suffered 3rd degree burns to at least 6% of her body and required skin grafts. She asked for $20K to help pay for the recovery due to the burn that McDonald's was aware their coffee was liable to cause, and was instead offered $800. Her damages the jury awarded were $200,000, which was lowered by the jury to $160,000 as they found her comparatively liable for 20% of the injury. The punitive damages are what people get upset about - that's the $2.7 Million that immediately causes people to yell "frivolous," but those are punitive damages - awarded to punish McDonald's for continuing with a practice that it knew could cause injuries such as what happened to Stella. This punitive damage was ultimately lowered to $480K, and finally was tossed out as McDonald's and Liebeck came to a confidential settlement between them.

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