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Screening Plaintiffs and Selecting Defendants in Medical Malpractice Litigation: Evidence from Illinois and Indiana

40 Pages Posted: 23 Jul 2014 Last revised: 2 Aug 2017

Mohammad Hossein Rahmati

Sharif University of Technology

David A. Hyman

Georgetown University

Bernard S. Black

Northwestern University - Pritzker School of Law; Northwestern University - Kellogg School of Management; European Corporate Governance Institute (ECGI)

Jing Liu

University of Illinois College of Law

Charles Silver

University of Texas at Austin - School of Law

Date Written: July 17, 2017

Abstract

Many physicians and tort reform advocates believe that most medical malpractice (“med mal”) claims are “frivolous”; they often rely on reports that only about 20% of claims result in a payout. Many physicians and reform advocates also believe that plaintiffs lawyers often sue every health provider with even a remote a connection to the patient. Plaintiffs’ lawyers insist that they screen med mal cases carefully, and when they bring a claim, are selective in whom they sue. Can these perspectives be harmonized? We study this question using databases of every insured med mal claim closed in Illinois during 2000-2010 and in Indiana during 1980-2015; and semi-structured interviews with six plaintiffs’ lawyers. We innovate by using defense costs to assess whether the plaintiffs’ lawyers take a case seriously. We treat cases with under $5k in defense spending as “non-serious” cases, unless they have a payout over $25k. We find evidence that many “cases” are non-serious – they never involved filed lawsuits or if they did, the suits were soon dropped – indicating that screening is an ongoing process that does not end when a case is accepted. Observed success rates are sensitive to whether one counts “claims” (each defendant is a separate claim) or “cases” (one plaintiff versus one or more defendants), includes both pro se and represented cases, and includes all versus only serious cases. If we analyze cases instead of claims and limit to serious, represented cases, we find much higher success rates (43% in Illinois; 44% in Indiana). Success rates are higher still in cases brought solely against institutional defendants (58% in Illinois; 68% in Indiana). Plaintiffs’ lawyers are also selective in the number of defendants they sue. In med mal cases involving only physicians and/or institutions, the mean number of defendants is 1.5 in Illinois and 1.8 in Indiana.

Online Appendix can be found here:

http://ssrn.com/abstract=3010344.

Keywords: medical malpractice, success rate, frivolous litigation

JEL Classification: K40, K41

Suggested Citation

Rahmati, Mohammad Hossein and Hyman, David A. and Black, Bernard S. and Liu, Jing and Silver, Charles, Screening Plaintiffs and Selecting Defendants in Medical Malpractice Litigation: Evidence from Illinois and Indiana (July 17, 2017). Illinois Program in Law, Behavior and Social Science Paper No. LBSS 14-13; Northwestern Law & Econ Research Paper No. 13-30; U of Texas Law, Law and Econ Research Paper No. 535. Available at SSRN: https://ssrn.com/abstract=2465092

Mohammad Hossein Rahmati

Sharif University of Technology ( email )

Graduate School of Business and Economics
Sharif University of Technology
Tehran
Iran
+98-21-6604-9195 (Phone)

HOME PAGE: http://gsme.sharif.edu/~rahmati/

David A. Hyman (Contact Author)

Georgetown University ( email )

Washington, DC 20057
United States

Bernard S. Black

Northwestern University - Pritzker School of Law ( email )

375 E. Chicago Ave
Chicago, IL 60611
United States
312-503-2784 (Phone)

Northwestern University - Kellogg School of Management

2001 Sheridan Road
Evanston, IL 60208
United States
847-491-5049 (Phone)

European Corporate Governance Institute (ECGI)

Brussels
Belgium

Jing Liu

University of Illinois College of Law ( email )

504 E. Pennsylvania Avenue
Champaign, IL 61820
United States

Charles M. Silver

University of Texas at Austin - School of Law ( email )

727 East Dean Keeton Street
Austin, TX 78705
United States
512-232-1337 (Phone)
512-232-1372 (Fax)

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