What starts out as a blah-blah Wall Street Journal editorial supporting Illinois’ damages caps on medical error cases, turns ugly.

Look at what’s underneath, as the editors at the Journal are fairly frank about their goals:

“We’d prefer a ‘loser pays’ rule as in the British system. But without such a deterrent to frivolous suits, limiting damage awards is the only way to stop jackpot judgments that drive doctors away and hurt the quality of medical care.”

It’s a nasty bit of rhetoric for several reasons. First, there’s the urban myth of doctors driven away. There are no names, and there is no data. It’s just the bald “fact” that this happens. But the more unfortunate and intellectually dishonest piece is the “jackpot justice” rhetoric. The Journal editors know that they’re being disingenuous as a number of high-profile studies confirm that the system works fairly well, with one important flaw. Here’s a widely-publicized study from the New England Journal of Medicine on the topic of medical errors and litigation. Here’s another slightly-dated summary from AARP.

Here’s the bottom line from the New England Journal article: “Claims that lack evidence of error are not uncommon, but most are denied compensation. The vast majority of expenditures go toward litigation over errors and payment of them. The overhead costs of malpractice litigation are exorbitant.”

That overhead cost thing at the end is also important. What the Wall Street Journal wants to do is make litigation more expensive by importing from England the loser pays rule. What that means is that lawyers on both sides get paid by the loser.

Under the current system, most patients’ cases are handled on a contingent fee basis. That means that the lawyers get paid if and only if we make a recovery for the injured patient. That system does several things. First, it keeps open the courthouse to meritorious claims, regardless of the wealth of the patient. The patient that wins pays his or her lawyer based on a percentage of the recovery.

Under the contingent fee system, lawyers who represent patients simply can’t afford to take losing cases because when they lose, they don’t get paid.  As well, middle-income patients are able to locate and hire top-flight legal talent because they don’t have to pay by the hour for the lawyer’s work.

But the second thing is that I imagine that loser pays will drive up the costs to both sides. While I don’t have any data, the costs are apt to increase because both sides have an incentive to do more work and stick the loser with the bill.

Underneath, the Wall Street Journal wants us to believe that juries can’t be trusted, and our founders were wrong to set up a jury system. The Wall Street Journal apparently believes that legislatures that pass one-size-fits all rules are better suited than juries to determine case outcomes. [Snark alert:] I’m sure this has nothing to do with the fact that lobbyists roam through the various hearing rooms and halls of various legislatures but are barred from jury rooms.

In the end the editors of the Wall Street Journal sipmly ignore the reality of injured patients. I have to assume that they simply close their eyes because no one should be so jaundiced in the face of profound injury.

David Sugerman

Tags: damage caps, medical negligence, sugerman