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Business Observer Friday, Oct. 24, 2003 14 years ago

Survival of the Strongest (Tampa edition)

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Some law firms, unable to afford the new upfront costs associated with medical malpractice lawsuits, are expected to shift to other practice areas.

Survival of the Strongest

Some law firms, unable to afford the new upfront costs associated with medical malpractice lawsuits, are expected to shift to other practice areas.

By Hali White

Legal Affairs Editor

They filed all the lawsuits they could before the Sept. 15 deadline. Now it's a game of wait-and-see for Tampa Bay area lawyers to gauge the effect of Florida's new medical malpractice legislation on their practices.

Joe Varner of Tampa's Knopik Varner Moore says the strong will survive but second- and third-tier firms may not be able to afford to play by the new rules. Those firms may choose to phase in other practice areas, such as commercial torts, he says.

Following legislative changes in 1988, Florida law required lawyers to make so-called good-faith investigations before filing a medical malpractice claim. A medical professional was required to vouch for the existence of a malpractice claim. To start a malpractice lawsuit, a lawyer needed only to file a notice of intent to litigate that included the expert's affidavit. Juries decided damages if cases went to trial.

Florida's new law, developed earlier this year during multiple special sessions, caps non-economic damages (pain and suffering) at $500,000 against doctors; at $750,000 against institutions, including emergency rooms, HMOs and hospitals; and at $150,000 against emergency room physicians.

Tampa Bay area lawyers decry the caps, but point to the changes in pre-suit screening as the real problem. Lawyers must now call experts whose specialties match the specialties of the doctors' whose work they are reviewing. Often, the actual defendant is open for debate. Could have been the admitting nurse. Might have been the doctor or the surgeon. Of course it might have been the anesthesiologist. In such a case, experts in each field must be interviewed.

"You practically have to prove your case before going to trial," says Clearwater attorney Tom Masterson who has handled medical malpractice since 1975.

Malpractice attorneys agree that experts equal dollar signs. Doctors-turned-experts charge about $300 to $700 an hour. Neurosurgeons and other specialists have been known to bill as much as $1,000 an hour.

After plaintiffs serve a notice of intent to initiate litigation, both sides have 90 days to exchange information. That's when it really gets pricey, says Scott Whitley, who heads the medical malpractice department in the Tampa office of Morgan Colling & Gilbert. Basically, every expert - in many cases it takes two hands to count 'em - reads every other expert's deposition, all the while charging hundreds of dollars an hour. A four-hour deposition might fill 200 hundred pages, Whitley notes, adding that court reporters in Tampa charge about $1.50 per page. Also, when experts from out of town come to trial, they charge for travel time to and from court, and the cost of closing their practice for the day.

All in all, malpractice cases tend to cost about $50,000 to $130,000, with lawyers fronting costs until a settlement or verdict is reached. The timeline is just as steep. Six months can easily pass from the time clients introduce themselves until plaintiffs' experts have completed their review of the case. Add 90 days for discovery, 10 to 18 months before a trial date, and a week or month-long trial, and it becomes more necessary for a case to earn its keep in court.

That's where caps are a problem, says Varner. The Florida Supreme Court approves attorneys' fees at 40% of the first $1 million, 30% of the second million and 20% of everything over that. A case with no economic damages (rare, says Varner) and a verdict of $2 million would have produced $900,000 in attorneys' fees under the old system. But with the $500,000 cap in place, the same case produces only $200,000 for the attorney. But it took longer to get to trial, and it cost the client more in fees, says Varner.

Mike Foster, a Tampa attorney who has handled medical malpractice for more than two decades, says lawyers are going to have to raise the threshold for case values. It used to be about $250,000, he says. Now, he expects it to start in the low six-figures. Lawyers who can't afford to front the pre-suit cost of multi-defendant cases may have to rethink their business plan.

Jeffrey O'Brien, a Clearwater sole practitioner who has handled medical malpractice for about 30 years, will continue to accept medical malpractice cases, but says he may have to join forces with other attorneys to share costs in such cases.

Established medical malpractice attorneys, who say the 1988 changes were enough to stop ambulance chasers from filing frivolous suits, are offended at the premise of the most recent med-mal laws.

"It made me laugh when the legislators were talking about exemptions for serious cases," Whitley says. "I don't file anything unless it's a serious case. I probably have 11 active cases and in about 70% of those cases, the person is dead." If anything, he says, the caps remove the incentive for insurance companies to settle, which will cause more litigation.

"I think it will make insurance companies more willing to say, 'Let's roll the dice because we have a safety net here,'" Whitley says.

Like his peers, Whitley expects the constitutionality of the law will be challenged.

"Believe me, we, we being plaintiffs' lawyers and my firm, we're looking to take it to the Supreme Court because we think we're going to win," he says.

Not surprisingly, the Academy of Florida Trial Lawyers is adamantly against the new law. In a position paper published by the group, AFTL cites the insurance industries' investment losses as the real crisis. It claims the average payout to victims of medical negligence in Florida has gone down 14% since 1991 when numbers are adjusted for inflation.

"California, which has the most restrictive medical malpractice caps in the country, saw its malpractice premiums rise by 37% between 1988 and 1998. During the same period, Florida's malpractice premiums went down by 17%," according to AFTL, which cites the American Medical Association.

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