Loser Pays Legislation: The Only "Winners" Are Insurance Companies

Recently, some politicians have attempted to insert a national "loser pays" rule into health care reform legislation. The "Pop Tort" website nailed the idiocy of this legislation in a recent post entitled "Loser Pays Is A Medical Malpractice Loser." In addition to the excellent points made by the post (that a "loss" in court does not mean that the case was frivolous), there is one other fatal flaw of this legislation that makes it a horrible idea: just how do you define just who is a lawsuit "loser?"

Example. A surgeon leaves a large towel or sponge or clamp inside your body after abdominal surgery. After months or years of pain, swelling, fever, and after you were misdiagnosed with every wrong condition under the sun (or worse yet told it is "all in your head"), a prudent physician finally gets a CT scan, compares it to your surgical CT, and figures out that you have a huge foreign object inside you. After hours of surgery to remove the object, which has now adhered to your insides, you are left with permenant damage to your internal organs.

You obtain the medical records. Not surprisingly, all the sponge and instrument counts in the surgical records were correct. So who dropped the ball--the hospital surgical team or the surgeon? You sue both the hospital and the surgeon. Each denies negligence and each blames the other for the colossal screw up.

You go to trial, and the jury finds that the surgeon was negligent but the hospital was not, and returns a modest verdict of $350,000. Your case was a "winner" against the surgeon but a "loser" versus the hospital. Under "loser pays" legislation, the hospital moves after the verdict to order you to pay them $150,000 in legal fees and expenses for defending the claim. If you think this figure is bloated and unrealistic, think again--hospital attorneys bill by the hour and it is not uncommon for them to charge $2-400 per hour and hire expensive experts who charge $500 per hour for a case that lasts 2 years, so you do the math...

So you won the case, but well over 50% of your recovery goes right out of your pocket to lawyers you did not hire and who actually fought against you! How does "loser pays" legislation sound now? Who does this law benefit? Not you. But the hospitals' malpractice insurance companies will make out like the bandits they are.

No wonder insurane companies are pushing for this law. For over two hundred years, we've had the rule in the U.S. that each side pays its own attorneys fees, unless the lawsuit was considered frivolous. Now, the same politicians who rail against government intervention are attempting to "federalize" medical malpractice law with a law that essentially shifts all the risk to you as the injured patient.

The end result will create a HUGE chilling effect on LEGITIMATE malpractice cases, and will cause many injured patients to simply give up over fear of shouldering a monstrous legal bill if they lose. And that's the irony of this legislation--they can leave a towel in you, and you might just be forced to "throw in the towel" against them.