Who your lawyer is really matters in a malpractice lawsuit

As a physician you are a target for a lawsuit.  The reasons are many, but one is the fact that physicians must carry large insurance policies to pay patients who claim they have been injured.  When you are sued you send the legal documents to your insurance carrier and wait until a lawyer retainer by the carrier contacts you concerning your defense.  Many times a hospital is also named as a defendant and the same lawyer is retained by the insurance company to represent both you and the hospital.  When this happens a loud bell should sound in your mind and you must immediately ask yourself whether your interests and the hospital’s interests are the same.  Should you both have the same lawyer?

Look at things from the hospital’s point of view.  The hospital has a full time Risk Management Department that deals with the insurance carrier on a regular basis.  The goal of Risk Management is to try to resolve every lawsuit without having a payment made against the hospital’s insurance policy.  The reasoning is simple in that the amount the hospital has to pay in premium to the insurer is directly matched to the amount of money the carrier has to pay from the hospital’s policy.

You should also realize that the hospital has several law firms that do its malpractice defense work.  The hospital names the law firm it wants to act as defense counsel and the insurance company will send the  case to that law firm.  This ongoing hospital defense work is extremely important to the individual law firms.  The hospital might send fifteen or more cases in a year to a particular firm and the billing on those cases will make up a large proportion of the law firm’s revenue.

So, when the hospital tells the insurer to send the case to that firm, your defense goes with it.  Now, who do you think the law firm is trying to please in this particular litigation, you or the hospital?  If the case comes down to who is going to pay the plaintiff, is the law firm likely to point at the hospital to keep your record clean, or might there be a desire to make the hospital happy and have the money paid on your policy?  Remember, the law firm’s bottom line can be positively or negatively impacted by the decision making of the Risk Manager who assigns the cases.  You, on the other hand, might never have another lawsuit.

Now, law firms should and most often, I am sure, do recognize conflicts between parties they are defending.  When a conflict is seen it must be brought to the attention of the insurance company and one of the parties must be assigned a new lawyer.  Sometimes, however, the facts are subtle and the conflict might not be appreciated until everyone is in the middle of a trial when it might be too late to rectify the problem.

So, the lesson here is that often it is prudent for each party in the litigation to be represented by a single law firm.  By setting up the case in that fashion, all conflict issues disappear.