The Gazette 1994

GAZETTE

JULY 1994

proposals were based on the premise that defendants' insurance companies offered fast settlements, whereas, in reality, insurance companies defended cases - even ones that appeared to be indefensible - to the hilt. The Board also argued that the skill and stature of the lawyer involved has some bearing on a case, but under the Institute's proposal, the more skillful lawyer, who should be rewarded for being able to resolve a matter quickly, would actually receive a much smaller fee. proposal, adding that it was masquerad- ing as a "pro consumer initiative". The Association claimed the proposal did not derive from complaints by injured consumers about contingency fees but rather, was the product of a few people who called themselves "an institute" but who neglected to mention that they were funded by insurance, chemical, pharmaceutical and tobacco companies. Contingent fees had not led to a litiga- tion explosion and independent studies had confirmed that the only recent growth in litigation in the US had been in the area of contract and real property. Analysing the debate, the former ABA President said it was unlikely that there would be any reform of the contingency fees system for some time to come. In his opinion it was important not to lose The American Association of Trial Lawyers had also denounced the sight of what the contingency fee system stood for i.e. providing a mechanism for someone without means who was injured to file a suit for fair compensation. Medical Negligence Capping has not worked in the US Addressing the Conference Seminar, a prominent US litigation specialist, Robert Harley, Harley & Browne, New York said: "the argument in support of caps in medical malpractice cases parallels the argument for caps across the board in all personal injury litigation: the public will save money. Mr. Harley told delegates that the experience in America had been otherwise: "the truth is that the facts are precisely to the contrary: the cost is high and the savings to the public are non-existent."

At the Annual Conference were, l-r: Ken Murphy, Chairman, Education Committee, Law Society; Tom Shaw, Past-President, Law Society and Patrick O 'Connor, Junior Vice- President, Law Society.

in the US which had introduced caps on awards in medical negligence cases. He told delegates about the case of Frank Cornelius, an employee in the insurance industry in the State of Indiana, whose job was to lobby the Indiana legislature to impose caps on medical malpractice cases. The Indiana legislature placed a general cap of $500,000 on the total damages that could be awarded in a medical negligence case. A few years later, Frank Cornelius had a minor operation performed on his knee. As a result of what a court subsequently found was medical negligence, he suffered complications and diseases that involved many hospitalisations and operations. Although an economist retained by his attornies evaluated his economic loss at over $5m, his damages under the law he had helped to enact were limited to $500,000. Meanwhile, between 1980 and 1990, health care costs in Indiana had actually increased by 139.4%. Health care costs in the United States in general in that same period went up by 138.7%. There had been no improvement in Indiana's per capita health care costs. In return for denying adequate recovery to the most severely injured victims of medical negligence, the citizens of Indiana had gained nothing, stated Mr. Harley. Mr. Harley's second example was the State of Colorado which, in 1987, passed a statute limiting total compensation (including both economic

and non-economic loss) against the State in a negligence case to $400,000 per occurrence. By 1992 this had lowered the State of Colorado's casualty insurance bill by a mere 9%. In 1987, in accidentally set a boulder rolling which fell on a bus; eight people were killed and others injured. One survivor was rendered blind and brain damaged and by the date of the trial had expended $328,000 in medical expenses. He had to share with all of the other victims in the $400,000 maximum compensation. In 1975, the State of California passed a $250,000 cap on pain and suffering compensation awards in medical malpractice cases in order to contain health case costs. Since this statute was passed, general inflation in the State of California had gone up by 169% while the cost of health care had increased by 286%. California's per capita health care cost is 19% higher than the national average. Mr. Harley continued: "California's lesson is the same as Indiana's and Colorado's. Taking the right to just compensation away from the very tiny number of the most deserving accident victims has had little or no effect on the cost of the entire system." Mr. Harley told the Conference that constitutional challenges, alleging violation of the State and Federal the course of working on a State highway, some State workers

Robert Harley cited examples of States

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