Most Recent Legislation Caps Damages
While the threat of a medical malpractice lawsuit is ever-present, providers breathe a little easier these days in Tennessee, thanks to several pieces of legislation that have passed in the last few years.
“The legal system that we have in Tennessee is a good, solid system,” said Lee Barfield, a litigation attorney with Bass, Berry & Sims for more than 30 years. When it comes to malpractice defense, he said laws since 2008 have “tweaked and polished and smoothed out” some of the state code’s rough edges, resulting in a more efficient system that weeds out frivolous litigation and prevents runaway, exorbitant judgments.
Tennessee’s most recent tort reform, which Barfield called “landmark,” is the Tennessee Civil Justice Act, which went into effect on Oct. 1, 2011. Among its several changes is a cap on noneconomic damages – so-called ‘pain and suffering,’ which is certainly a challenge to quantify. The legislation affects any suit seeking such damages, not just medical malpractice cases.
The act caps noneconomic damages at $750,000 per each “injured plaintiff,” and the cap is increased to $1 million for a catastrophic loss or injury, such as spinal cord damage, some amputations and burns, or the wrongful death of a parent leaving a surviving minor child. Those caps don’t apply if the plaintiff proves intentional wrongdoing or that the defendant’s judgment was substantially impaired by alcohol or drugs.
There’s another exception, and it’s one that defense attorneys are urging their clients to understand: The caps go out the window if the defendant is found to have “intentionally concealed, altered or destroyed records with the purpose of avoiding or evading liability.”
Buck Wellford, chairman of the Health Care Advocacy Group for Baker Donelson Bearman Caldwell & Berkowitz in the Memphis office, stressed that relevant documents might not even be part of the medical record. “They may even be text messages and email communications,” he said, warning that plaintiffs’ lawyers could be “creative” in claiming that evidence is being concealed.
Wellford noted another provision of the 2011 act makes it easier for defendants who are tagged with a large judgment to appeal. That’s because the maximum appeal bond is reduced from $75,000 to $25,000 or 125 percent of the amount of the judgment, whichever is lower.
While both Wellford and Barfield agree that it’s too soon to tell what the impact of the 2011 legislation will be, both do expect there will be a constitutional challenge to the law’s damage caps. The primary argument probably will be that tort cases are being treated differently than other types of civil litigation, yet Wellford doesn’t expect a medical malpractice suit to be the test case. Do expect a catastrophic case with a sympathetic plaintiff, he predicted.
Reforms in 2008-2009
“What people have overlooked is that some changes to the law that focused on the medical profession in 2008 and 2009, in my opinion, have had really more significant impact than this new legislation,” Wellford said.
Among those tort changes is a requirement that plaintiffs must have an expert certification backing up the allegations made in a medical negligence suit. The plaintiff must prove violation of the standard of care and, equally important, that the violation of the standard of care caused an injury. “The two are not always coterminous,” Wellford explained.
While the plaintiff doesn’t have to disclose at the beginning of the case the identity of the expert who provides the certification, the lawyer does have to file an affidavit that he or she has that certification. Wellford added, “If at the end of the case, the case has to be dismissed or the defendant prevails, you can force the disclosure of that expert, and if the certification isn’t there, the lawyer can be penalized for that.”
Those provisions have made a “dramatic impact, more so than most people anticipated,” on the number of malpractice suits, Wellford continued. “You really need to know what you’re doing if you’re a plaintiff’s attorney to competently handle a malpractice case,” he said. “It has cleared up court dockets, at least here in West Tennessee.” Indications are that the impact has been the same in other regions of the state.
On the flip side, it’s also true that the cases that are filed now “are far less likely to be frivolous cases,” whether or not they have merit, Wellford said. “The impact of that is that the cases you do have tend to have staying power; they tend to be serious cases.” What’s more, summary judgments are far less likely today than before the 2008 reforms.
The Tennessee General Assembly tackled liability legislation again in this session, and three broad-based statutes are the result. Barfield was the lobbyist for a business coalition called Tennesseans for Economic Growth, and the organization was successful on three fronts.
The first new statute, with the purpose of preventing frivolous lawsuits, requires the plaintiff to cover court costs and legal fees up to $10,000 should the suit be dismissed for failure to state a claim. “This is the first time that the Tennessee Legislature has adopted a ‘loser pays’ type of bill that allows for recovery for some amount of the legal fees and costs incurred by someone defending a frivolous lawsuit,” Barfield said. Of course, the same applies if the defendant files a frivolous counterclaim.
The second new law codifies legal protections for landowners should a trespasser be injured on their property — unless the landowner is guilty of “willful and wanton misconduct.” What if a hospital visitor crosses a threshold that’s clearly marked for employees only and is injured? This new law would help protect the hospital.
The third new statute limits the interest rate charged on a judgment while the defendant appeals the verdict. Before, the rate was 10 percent; now it’s the market rate, which today is about 5 percent. Barfield recalled representing a large nursing home years ago, and the judgment against the facility was $34 million. While the appeal worked its way through the system, the interest on the judgment cost the defendant $340,000.
One bill that didn’t pass this year was the Innocent Employer Act, which failed by one vote in the Senate Judiciary Committee. The bill provided a “safe harbor” for employers who are not complicit in the egregious actions of an employee. Remember the Texas nurse found guilty in April of injecting bleach into dialysis lines, killing five patients? The Innocent Employer Act would protect the clinic where she worked from liability.
Expect to see that bill or one similar back on the legislative docket in Nashville next year.