NCJ Number
95421
Date Published
1982
Length
52 pages
Annotation
Two computerized data files containing information on almost 6,000 medical malpractice claims closed by large insurers during certain periods of 1974 and 1976 were analyzed using a computerized model of the bargaining behavior through which claims are settled.
Abstract
Among the issues addressed are (1) What determines the plaintiff's probability of winning a judgment, (2) what determines the size of the settlement, (3) why so many claims are dropped, (4) why cases go to verdict, (5) why indemnity dollars are so unevenly distributed, (6) the impact of the 1974-76 changes in the tort law, and (7) what would happen if litigation costs were cut. Analysis reveals that about half of the claims in the data base were dropped with no payment to the plaintiff, and two-thirds were dropped without a lawsuit being filed. Many weak and small claims are dropped, and many of the most substantial claims are settled. Less than 10 percent of all claims are taken to verdict. The model predicts, and the data confirm, that this small but critical segment is atypical in several respects. Specifically, any factor that increases uncertainty or reduces litigation cost heightens the propensity to go to verdict. The mean award in the data base was $102,000; the mean settlement, $26,000. Analysis suggests that the uneven distribution of dollars parallels the uneven distribution of injury severity. Evidence indicates that changes in the tort law wrought substantial effects, because the upsurge in the frequency of claims and in insurance premiums abated after 1976. Twelve references are included.