Does Litigation Benefit the Public?
We often hear claims that litigation has costs: costs to the insurance companies who, in turn, blame the legal system for raising rates to those they insure; costs to those sued; and societal costs. We don’t typically hear about the benefits that come through the legal system. I want to give you a very specific example of what happens when litigation, and the amounts those injured by the acts of others, is restricted.
A few years ago, there was an alleged medical malpractice crisis in the State of Nevada. This “crisis” was allegedly caused by an overabundance of malpractice claims against medical providers (doctors, hospitals, etc.) It is my opinion that the “crisis” was a fabrication of the insurance industry as a result of the losses it suffered as the stock market declined.
In any case, the Insurance Industry (with the help of doctors who believed that the insurers would lower their rates if they were able to limit the amounts that could be claimed against them) convinced the State of Nevada to place restrictions on the amount a person injured by a negligent doctor could be awarded for the non-economic damages caused by the doctor’s negligence in performing his medical services. The details of the restrictions are not important for this discussion.
The “medical malpractice crisis” began sometime in Early January, 2002. A special session of the Nevada Legislature was held in resulting in a “tort reform” bill signed by the governor limiting the amount of non-economic damages that could be awarded against a doctor found to have been medically negligent. That bill was signed in the Summer of 2002. The cap for non-economic damages did not apply to cases of gross malpractice which was defined as a “failure to exercise the required degree of care, skill or knowledge that amounts to: (a) A conscious indifference to the consequences which may result from the gross malpractice; and (b) A disregard for and indifference to the safety and welfare of the patient.”
In 2003, the Insurance Companies got together and had a bill passed with the help of fear they built by the alleged threat of doctors leaving Nevada due to high costs of Malpractice Insurance. The limitations set by that bill are simple. NRS 41A.035 (Limitation on amount of award for noneconomic damages) states:
In an action for injury or death against a provider of health care based upon professional negligence, the injured plaintiff may recover noneconomic damages, but the amount of noneconomic damages awarded in such an action must not exceed
$350,000.
There are NO exceptions to that limitation. NRS 41A.035 was proposed by an initiative petition (led by guess whom) and approved by the voters at the 2004 General Election and therefore was not subject to legislative amendment or repeal until after November 23, 2007. This change took effect in 2004 – just months before the beginning of the alleged re-use of needles at endoscopy clinics in Las Vegas. For those who have not heard, this involves (according to various reports) tens of thousands of people who, at the very least, have to be concerned that they were been exposed to diseases such as Hepatitis C and HIV (AIDS). At worst, some appear to have contracted these diseases as a result of the re-use of needles at one or more clinics.
Now, you tell me….does litigation and the threat of litigation benefit the public?
