Sample Negotiation with a Medical Malpractice Insurance Company’s Attorney

PLEASE NOTE: Do not attempt a medical malpractice claim alone. These claims require the advice and counsel of an experienced personal injury attorney. If you or a loved one is the victim of medical malpractice, seek legal advice as soon as possible.

It’s rare for both parties to settle medical malpractice claims in their early stages. Invariably, settlement negotiations begin sometime after a lawsuit is filed. When a malpractice lawsuit is filed, the claims adjuster steps aside and lets the insurance company’s attorneys take over. The negotiations take place between the insurance company’s attorneys and the victim’s attorneys.

In this section we cover a sample dialogue in a medical malpractice negotiation. The negotiation resulted from a lawsuit filed by the parents of a 16-year-old boy named Sean.

Factual Summary

Sean was a high school student. He worked part-time at a local grocery store. One day, he awoke feeling feverish and sick to his stomach. His mother took his temperature, which was 103 degrees. As his symptoms worsened, Sean’s parents took him to the local hospital’s emergency room.

He was admitted because of belly pain, nausea and vomiting. His temperature was now 104 degrees. The emergency room doctor misread Sean’s admitting chart. Believing Sean had eaten 11 hours before coming to the hospital, the doctor erroneously ordered a valium drip and an MRI. In fact, Sean ate only one hour before entering the hospital. The valium caused Sean to fall asleep, and he vomited during his MRI. The vomit blocked his air pathway, depriving him of oxygen for approximately four minutes.

Sean suffered brain damage, which resulted in partial paralysis of his right hand. Sean’s parents retained an experienced medical malpractice attorney who, in turn, filed a malpractice lawsuit against the doctor.

In this example Attorney Steele represents the doctor. Attorney Waite represents Sean. It’s been about a month since Attorney Waite filed the lawsuit. Both attorneys have just completed their pretrial discovery. They took depositions, subpoenaed documents and argued motions in court. A trial date is set.

Both attorneys know the evidence produced during pretrial discovery is the same as the evidence at the trial. With that in mind the attorneys agreed to attempt a settlement, and now they’re negotiating…

Attorney Steele to Attorney Waite:

We’ve reviewed all of your client’s specials and your demand for Sean’s general damages.”

Special damages, sometimes referred to as “hard costs,” are items such as Sean’s present and future medical and therapy bills, his parent’s out-of-pocket expenses for such items as prescription and over-the-counter medication and Sean’s lost wages.

In Sean’s case general damages include his past, present and future pain and suffering; it’s also referred to as mental anguish or emotional distress.

We don’t have a problem with your client’s past and present specials. We do, though, have a problem with the amount you’re demanding for his future medical and therapeutic costs. Our medical expert believes the amount is excessive. In his deposition our expert Dr. Jones testified it was his medical opinion Sean will require about half of the medical treatment and therapy you say he will require. We tend to agree.”

Attorney Waite:

According to our medical experts, Drs. Smith, Akins and White, the full extent of Sean’s recovery won’t be known for at least two years. During that time Sean will require continuing treatment. Our approximation of the costs of such treatment is accurate. In support of that amount I’ve provided you with documentary evidence of the cost of Sean’s future treatment. These costs are reasonable and necessary.

Sean may never regain the full use of his right hand. He may have a permanent disability. Our doctors are convinced Sean may need future surgery to recover more mobility in his right hand and fingers.

My client never asked for this. When he went in to the hospital that day, his future was bright. Now, because of your client’s negligence, Sean’s future is in question. Sean will have to overcome his disability every day. We just hope his disability will not become a permanent one.

According to the deposition testimony of Sean’s parents, Sean continues to wake up in pain in the middle of the night. He also is now suffering from depression because of his injury. As you know, we also uncovered proof of a previous medical malpractice lawsuit against your client. During his deposition your client admitted under oath he settled the previous medical malpractice case for $1.8 million.”

At this point the attorneys probably won’t discuss actual dollar figures. Right now, they’re listening to each other’s arguments about the evidence’s strengths and weaknesses. Attorney Steele knows the evidence against his client is substantial. Going to trial might be a disaster. He knows if the jury sees Sean with a paralyzed hand, they may react emotionally. He also knows Sean’s parent’s testimony is equally disturbing.

Attorney Steele knows this case has to be settled. Although he won’t admit his client committed malpractice, he has to find some middle ground. He must find a way to settle the case in a manner that will satisfy his client and the victim. At this point both attorneys know the liability issue is resolved in Sean’s favor. The evidence of malpractice is overwhelming. It’s now just a matter of how much the settlement is.

Both attorneys will normally have other cases going on and there may be a lag between communications. Neither side wants to rush into a settlement. For Sean there’s no need to worry about the statute of limitations expiring. Once the lawsuit is filed, the statute of limitations is tolled, or indefinitely suspended.

Resumption of Negotiations:

Attorney Steele to Attorney Waite:

We’ve had a chance to review the case with our client. You’re demanding $500,000 for Sean’s past, present and future specials. You additionally demand $3,500,000 in general damages for his pain and suffering. Your total demand is $4 million.

We are prepared to offer $1.5 million as full settlement. We believe that’s a generous offer.”

Attorney Waite:

I’ll take the offer to Sean and his parents. I must tell you I will strongly advise them not to accept your offer. There’s no guarantee Sean will ever regain the full use of his hand and fingers. Additionally, my clients are concerned this doctor may continue to commit malpractice. They want to be sure what happened to Sean doesn’t happen to another child. As a result they’re fully prepared to make those feelings public at trial.”

Attorney Waite is obligated by legal ethics to take the offer to his clients. He is not permitted to unilaterally reject any offer. He is, though, permitted to advise for or against the settlement offer. That is part of the legal advice he was hired to give. Attorney Waite may tell Sean and his parents the settlement offer is too low. He may believe he can negotiate a higher amount.

His belief is based on his experience in similar cases. That’s why when selecting an attorney to represent you in a medical malpractice case, it’s always a good idea to find one with similar malpractice experience.

Attorney Waite will rely on his prior trial experience and settlement negotiations in his other medical malpractice cases. He will also have researched court records to identify similar malpractice cases and the amounts the cases were eventually settled for. Relying on his experience, Attorney Waite tells Sean and his parents he thinks he can get the insurance company to raise its offer.

It’s always difficult for a victim of malpractice to reject an offer of settlement, especially when the offer is for such a high amount. For the victim the money is there for the taking, and the case will finally end. That’s why it’s so important to trust your attorney’s instincts. Sean’s parents trust Attorney Waite. They give him their consent to reject the current offer and continue negotiations.

Resumption of Negotiations:

Attorney Waite to Attorney Steele:

I’ve visited with my clients. Although they persist in wanting to make this case public, I have convinced them to accept $3,500,000.”

As you can see so far in the negotiations neither side has used the words “final offer.” Until one side or the other says these words, the negotiation will still be in play. Attorney Waite has reduced the demand from $4 million to $3.5 million. He knows the other attorney will probably reject that amount. It’s a negotiation tactic.

Attorney Steel to Attorney Waite:

I’ve discussed your counteroffer with my client. We’re prepared to make the following final offer. We are prepared to offer $2 million.”

The attorney says the magic word “final.” This means if Sean and his parents don’t accept the amount Attorney Steele is offering, the case will go to trial. The insurance company is not going to reduce its offer anymore.

Although Attorney Waite knows for all intents and purposes he just settled the case, both attorneys know he must consult Sean and his parents before he can accept the offer.

Attorney Waite to Attorney Steele:

I’ll discuss it with my clients and get back to you.”

Attorney Waite knows this amount is as high as the insurance company will go. Just as the previous settlement offer was tempting to Sean and his parents, the new offer is just as tempting to the attorney. A one-third contingency fee is a lot of money. He must rely on his experience and integrity when it comes to advising his clients.

If Attorney Waite believes there’s enough evidence for a jury to award a much higher amount than $2 million, it’s his duty to advise Sean and his parents not to accept the offer. In this case, Attorney Waite is convinced the amount is fair and is one close to what a jury might award if the case were to go to trial. After gaining his clients’ consent, Attorney Waite contacts Attorney Steele.

Attorney Waite to Attorney Steele:

I’ve discussed the settlement offer of $2 million with my clients. They agree to accept.”

Attorney Steele:

Fine. I’ll draft the agreed Court Judgment and send it to you along with the release for your clients’ signature.”

This is where the case ends. Both sides will avoid a trial. Although the doctor and his insurance company aren’t pleased with the settlement, their attorney correctly advised them to accept it.

It may have tempted Attorney Steele to tell his clients not to settle the case; private defense attorneys are normally paid by the hour. Attorney Steele could have made a lot more money if he took the case to trial, but like the victim’s attorney, Attorney Steele also has integrity.

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