Medical Malpractice Litigation and the Market for Plaintiff‐Side Representation: Evidence from Illinois

34 Pages Posted: 18 Nov 2016

See all articles by David A. Hyman

David A. Hyman

Georgetown University Law Center

Mohammad Hossein Rahmati

Sharif University of Technology

Bernard S. Black

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

Charles Silver

University of Texas at Austin - School of Law

Multiple version iconThere are 2 versions of this paper

Date Written: December 2016

Abstract

How concentrated is the market for medical malpractice (med mal) legal representation? Do successful plaintiffs’ lawyers start off with better cases to begin with, do they add more value to the cases they handle, or both? How do top plaintiffs’ lawyers market their services, and where did they go to school? How large are the “wages of risk” — the compensation to plaintiffs’ lawyers for working on contingency? How often do plaintiffs proceed pro se, and with what results? We address these questions using a data set of every insured med mal case closed in Illinois during 2000–2010. We show that most plaintiffs have a lawyer. We quantify the market share, case mix, and amounts recovered by the 1,317 law firms that handled med mal cases in our sample, stratify the firms into four tiers, and assess differences across tiers. We find that the market for plaintiff‐side med mal representation is both unconcentrated and highly stratified. At all firms, a small number of cases account for a heavily disproportionate share of total recoveries. We use the extensive covariates in our data to (imperfectly) address sample selection, and to estimate the effect of having a lawyer and law firm tier on outcomes. Controlling for observable claim characteristics, having a lawyer predicts a large increase in the probability of prevailing and the estimated recovery. Higher‐tier firms have only modestly higher success rates, but substantially higher estimated recoveries. However, the differences shrink and are statistically insignificant when we compare first‐tier to second‐tier firms. This suggests that there are substantial benefits to having a lawyer — and a higher‐tier lawyer — but diminishing marginal returns at the top of the market. Assuming that there is some unobserved case selection, our findings provide a plausible upper bound on the “value added” by different tiers of plaintiffs’ lawyers.

Suggested Citation

Hyman, David A. and Rahmati, Mohammad Hossein and Black, Bernard S. and Silver, Charles M., Medical Malpractice Litigation and the Market for Plaintiff‐Side Representation: Evidence from Illinois (December 2016). Journal of Empirical Legal Studies, Vol. 13, Issue 4, pp. 603-636, 2016. Available at SSRN: https://ssrn.com/abstract=2871696 or http://dx.doi.org/10.1111/jels.12127

David A. Hyman (Contact Author)

Georgetown University Law Center ( email )

600 New Jersey Avenue, NW
Washington, DC 20001
United States

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/

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

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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