The vast majority of medical malpractice cases are resolved through negotiations or a court judgment before entering the trial phase. Roughly 7% of such cases in the U.S. actually progress to a jury trial. In these cases that result in a jury verdict, the plaintiff prevails only 21% of the time. The average award from a jury is now approximately $799,000.
Courts generally seek to encourage negotiation among the parties to minimize the high costs of litigation. One example of these efforts among tort reform laws in the U.S. are provisions regarding offers of judgment. When a settlement offer is extended and the opposing party rejects the offer, they may ultimately face penalties if the outcome ends up being less favorable than the prior settlement that was offered.
Costs & Fees
A number of states began development of rules relating to offers of judgment in the 19th and 20th centuries. The Federal Rules of Civil Procedure formally implemented these provisions in 1938 in what is Rule 68. States each have some variation of the law in place. In Maryland, these are only applicable in cases of medical malpractice. Penalties for those who reject a more favorable offer during prior negotiations typically include responsibility for attorney fees, various costs accrued, and interest that has accumulated in the period since the offer was extended.
In cases of medical malpractice in Maryland, a party may bring a settlement offer (of judgment) not less than 45 days prior to the beginning of a trial specifying an amount. If a party is found liable by a judgment or verdict, yet the amount of liability has not yet been determined, an offer of judgment may be made “not less than 45 days before the commencement of hearing to determine the amount or extent of liability”. The party that is served with the offer may accept it within 15 days and then notify the court.
Response to Offers
When the offer is not accepted within the 15 day period, the offer is considered to be withdrawn. Evidence relating to the offer is inadmissible in further proceedings for the exception of when necessary to ultimately determine costs (penalties). Subsequent or revised offers of judgment may be made within the period. These provisions are not applicable to cases that otherwise reach some settlement.
Consent to Settle in Maryland
The acceptance or rejection of a settlement offer may require the medical professional’s (the insured’s) consent. This is determined by the terms of the specific professional medical liability policy, which may contain a “consent to settle” provision. This means that the insurance company may not independently finalize a settlement in the case without the provider’s approval.
Many medical providers facing claims of medical malpractice will feel that their good reputation is at stake in the case and are reluctant to settle and thus admit fault, or “appear” as though they are admitting fault. If the insurance contract does not contain such consent to settle clauses, the insurer may resolve the case in any manner they choose.