Consider Dr. V, an emergency physician who is sued after the death of a young patient. Dr. V exceeded the standard of care, but he was unable to save the patient’s life due to agonizing circumstances. He was initially eager to defend his care at trial. However, due to mounting pressures from the plaintiff’s attorney, he and his insurance carrier eventually agreed to settle the case.

We covered this case on my podcast. Listeners have described this outcome as “heartbreaking.” Dr. V explained his reasoning and has come to terms with the events. But settling a case is fraught with conflicting emotions for physicians, whether or not one feels responsible for a bad outcome. Even though we have been told that settling a case is not an admission of malpractice, we often feel that it is and worry that others will think the same. Being reported to the National Practitioner Data Bank (NPDB) and having to list the settlement outcome on every job or licensure application for years feels like an indictment on its own—and since our medical practice often becomes a core part of our identities, we tend to take this all rather personally. We fear the judgment of our peers, our families and friends, and our patients, as this information is often public. Settling a case can make us feel like a bad doctor, though it inherently means nothing of the sort.

Just as many good physicians are sued, many cases are settled even though the physician met or exceeded standard of care. Recall that only a small fraction of cases go all the way to verdict at trial; most insurance carrier payments to plaintiffs are through settlement agreements.

Why Settle?

There are two main advantages in agreeing to a settlement for both sides: speed and certainty. The road to trial is stressful and can take many years. Juries are notoriously unpredictable, and judges’ rulings can influence outcomes. Neither side can ever be certain of a win at trial, and an agreed-upon pretrial settlement eliminates that risk. 

Although many eleventh-hour settlement agreements occur on the courthouse steps, a successful negotiation earlier in the course of the lawsuit spares both sides the work and significant costs of trial preparation. However, each side must also give something up: The plaintiff loses the chance for an outsize windfall, the insurer loses the chance at walking away without paying the plaintiff anything, and the physician has to accept being reported to the NPDB—and the emotional cost that accompanies it. 

Malpractice insurers often serve as the final arbiters on whether a case goes to trial or is settled. It is important to understand your individual malpractice insurance policy. Depending on your policy, your consent may not even be required for the insurer to settle the claim. In some cases, your consent is not necessary, though most good insurers will take the wishes of the physician into account. Some policies do have a “consent to settle” clause, meaning the physician can choose to decline an offered settlement, thus forcing the case to trial. However, these policies often also include a “hammer clause,” stipulating that if you reject a settlement offer and subsequently lose at trial, you will be responsible for any judgment that exceeds the proposed settlement. For example, if the plaintiff’s attorney offers to settle for $500,000 but you decline and then the plaintiff is awarded $1 million at trial, then you would be personally responsible for the other $500,000. It’s not hard to see why many physicians waive their consent to settle.

Physicians often base decisions on whether to accept a settlement offer on emotion; feelings of fairness, shame, fear of judgment, and anger can come into play. To insurers, however, it’s all a business decision. They must make shrewd calculations of their odds of winning—or losing big—at trial. What are some factors that go into their deliberations?

First: math. Insurers know approximately how much it will cost to go to trial, adding up attorneys’ hours and the high costs of expert testimony. The more complex the case, the more experts and the higher the cost. Cases often cost hundreds of thousands of dollars, not including any liability payments required of insurers if they lose. How do these costs compare against any settlement offer—and how low a settlement might they negotiate in the end?

Next, what are the optics of the case? If the physician made a significant error, the carrier will often push for a settlement. However, it takes two to tango. The plaintiff might be hoping for a big win at trial and refuse to settle. But this is risky for them, too; they know that the majority of trial verdicts favor the physician.

Another consideration for both sides is how well the physician performs as a witness. Do you have a demeanor that a jury will like? Both sides will consider your deposition performance as a bellwether of your trial persona. A composed, compassionate, prepared physician presents a formidable foe for a plaintiff’s attorney at trial. 

Sadly, the optics of who the plaintiff is makes a difference. A plaintiff’s attorney hopes to play on the emotions of a sympathetic jury, knowing that younger patients, unexpected deaths, bereaved families, and visible (ie, cosmetic) damages may push the scales in their favor. In our podcast, Rick Bukata discusses a case of fulminant meningococcemia in a young woman. Even though the physician involved did everything possible to save her, he did not succeed. His team felt that a jury would naturally sympathize with the plaintiff’s family and not easily comprehend how the outcome could not have been changed. They opted to negotiate a settlement.

Still other considerations come into play. How strong are the experts, and will the jury trust them? Who is the assigned judge, and what is their track record? Who are the co-defendants, if any, and how strong are they? Is this a shared defense with the hospital, and how might that change things? What is the track record of the involved attorneys? Where is the case being tried, and what is the liability standard there? What are the population characteristics of the potential jury pool? What other losses has the insurance carrier incurred recently, and can it afford to take risks? 

Insurers do not want to settle every case, as they could be marked as easy targets for attorneys with weak cases. On the flip side, every trial is expensive. The calculations are complex. Despite what many might think, whether the physician actually met the standard of care is often not the driving determinant. 

Best Among Bad Choices

For those who have not been involved in litigation, it’s easy to assume that any physician who feels their care was reasonable would want to have their day in court. However, when weighed against years of stress on themselves and their families, the uncompensated time involved in preparation and attending trial, and the risks of an unfavorable verdict, sometimes settling a case feels like the best choice among bad choices. In my own case, I agreed to go to trial the first time—but when the plaintiff appealed and we found ourselves headed back to trial, I very much wanted to just settle. I wanted it all to just be over. My insurer made the final decision to refuse an offer for a policy limits settlement, and we won at trial a second time. Nevertheless, I still personally understand why physicians might want to settle a case. Remember: In and of itself, settling a case says nothing about the care you rendered or your skills as a physician. 

My next column will discuss trial preparation and testimony when settling isn’t in the cards.

Dr. Pensa is clinical associate professor of emergency medicine at the Warren Alpert Medical School of Brown University in Providence, Rhode Island; associate director (education) of the Emergency Digital Health Innovation program at Brown; and creator and host of the podcast “Doctors and Litigation: The L Word.”