A RECENT MULTIMILLION-DOLLAR jury award and six bills in the Legislature have placed a very public spotlight on the area of medical malpractice law in the state.

Opinions differ sharply on several legislative initiatives relating to the handling of medical malpractice cases, with much of the attention focused on a House-passed bill now before the Senate that would establish a screening panel to review medical malpractice cases prior to going to trial, and its equally controversial "loser pays" amendment.

"This panel bill is going to be a disaster for lawyers, doctors, courts, and injured patients," says Kevin F. Dugan, a partner of Abramson, Brown & Dugan, based in Manchester, and chair of the NH Trial Lawyers Association Legislative Committee. "It will prolong the legal process, ultimately increasing the cost for insurance companies and litigants." Dugan says that the NHTLA intends to challenge the pre-trial panel "the day it becomes law."

"If the panels become law, then the overwhelming majority of these cases will be resolved more quickly and with less expense for both sides," explains Martin Honigberg, a member of Sulloway & Hollis, based in Concord, and counsel for the New Hampshire Medical Society. He believes the panels will make the system more efficient by encouraging settlement of a majority of medical malpractice claims without going to trial. "It will be one step along the way within the normal process." Honigberg adds that the "loser pays" amendment to the bill might hinder its passage.

A $2.3 Million Med-Mal Verdict

Opinions are not as divided on whether last month's award of $2.3 million to a child injured at birth and her family is the harbinger of a trend toward higher payouts in malpractice cases from normally tight-fisted New Hampshire juries. Plaintiff and defendant attorneys agree that such a payout for a relatively straightforward case of birth injury is not unusually high.

"Typically, medical malpractice settlements are large because something really bad happened to the injured party," explains Timothy C. Coughlin, partner with Coughlin, Rainboth, Murphy, and Lown, based in Portsmouth, and NHTLA president. "The damages need to cover the costs of the litigation, medical bills, lost income, and the long-term expenses required by the person's disability."

In the case of O'Donnell v. Parkland Medical Center, a Rockingham County Superior Court jury awarded the money to five-year-old Ashley O'Donnell, and her parents Derek and Melissa O'Donnell, in a verdict handed down on March 25, 2004. The family also named obstetrician-gynecologists Monelle Bisson and Patricia Chadhuri, and employees of Progressive Women's Healthcare, where the doctors practice, in the suit.

The jury ruled entirely in favor of the O'Donnells, awarding $2 million in damages to the girl with an atrophied right arm and $200,000 and $100,000, respectively to her mother and father. The jury assigned varying degrees of blame to the defendants: to Chadhuri for using too much force on the baby during the delivery and inappropriately managing the delivery following the injury, 35 percent blame; Progressive Women's Healthcare for failing to obtain the mother's medical records, 30 percent; Bisson for failing to obtain medical records and not recommending a Caesarean section, 30 percent; and Parkland for one of its nurses, Ellen McGovern, for applying too much pressure on the mother's abdomen during the delivery, 5 percent.

The plaintiffs' attorneys in the case were John Flynn, of Massachusetts, and Paul Maggiotto, of Concord, and the defendants' attorneys were Marc Scheer and Todd Hathaway, both of Wadleigh, Starr & Peters, based in Manchester. The defendents are considering an appeal of the verdict.

The verdict comes amid vigorous wrangling by legislators and lobbyists over what to do about the impact of New Hampshire's expensive medical malpractice insurance premiums. There is a call for tort reform by medical and insurance lobbyists in the state, echoing the national tort reform debate. Doctors and hospital officials say high insurance rates will eventually force smaller practices out of business and cause a shortage of specialists. They also say that the expense is already causing the cost of medical care to go up in the state.

"Medical malpractice insurance rates themselves are not the problem, but public access to doctors priced out of the profession or the state because of skyrocketing premiums is the problem," says Honigberg.

Disputing Causes of Rising Medical Premiums

Advocates for the trial lawyers who handle medical malpractice cases acknowledge that insurance rates in the state are higher than seems necessary, considering how few cases are filed and the relative rarity of million-dollar-plus jury awards (see chart). Of 48 medical malpractice cases filed in the state last year, 19 went to juries. Of those, 16 had defendants' verdicts. The last major jury award occurred in Grafton County in 2001, in which an improperly diagnosed breast cancer victim was awarded $3 million.

Because rates vary geographically, the trial lawyers' lobby blames the insurance companies for the high rates and accuses them of trying to pad their profit margins by putting limits on medical-malpractice awards.

"Tort reform in whatever form it passes will do nothing to decrease the premiums charged to doctors," says Coughlin. "New Hampshire lawyers do not bring frivolous medical malpractice claims and, even if they did, there are enough safeguards already in place to prohibit a jury from recognizing a frivolous claim as compensatory."

Insurance companies say that premiums they charge physicians are barely covering their litigation costs. "Insurance companies are charging what they need to cover their losses," says Ronald Trahan, vice president of underwriting and insurance services, Medical Mutual Insurance Company of Maine, the major insurer of physicians in Maine and New Hampshire, in a recent Portsmouth Herald article. The company supports all six of the bills up before the legislature. He is further quoted explaining that insurance companies don't arbitrarily raise rates. "If we do collect a surplus, it would go back to our insured. There's no incentive to over-charge somebody; it just doesn't make sense."

As of January 1, 2004, insurance companies are no longer required by state law to have their proposed premiums reviewed by the state. Insurance companies may work under a "competitive rating law" that allows the companies to charge market rates, with the idea that competition may drive down premiums.

There is a national movement for tort reform that touches on many of the same issues legislators in New Hampshire are debating, including: caps on non-economic damage awards, such as for pain and suffering; limits on joint and several liability; caps on attorneys' fees; reduced statute of limitations on birth injury cases; and elimination of the collateral source rule. Proponents believe capping non-economic damages will make insurance premiums more affordable. New Hampshire-along with Alabama, Illinois, Kansas, Oregon, Texas, and Washington-have found these caps to be unconstitutional.

Introduced in the House September 4, 2003, HB 1413 would create mandatory panels for medical injury claims; establish a committee to study medical malpractice insurance rates and the effectiveness of the mandatory panel process; set standards for expert witness testimony; require litigants to disclose expert witnesses; allow patients to obtain their medical records; and repeal the current hearing panels. Approved in the House, 203-113, it was then introduced in the Senate March 17, 2004, where it is in committee and slated for a hearing this month. Primary sponsor of the bill is state Rep. Sheila T. Francoeur (R-Hampton).

Screening Panel Emulates Maine System

A similar panel concept exists in the Maine court system and has been in place for about a decade. Under the proposed New Hampshire system, a health care provider, judge, and lawyer would serve on the pre-trial panel. If they decided unanimously that the case was without merit, the plaintiff could have the ruling withheld from a jury but would have to pay legal costs of any trial they lost. Supporters of this bill believe the system will encourage early resolution of claims and point out that Maine's insurance premiums are approximately 40 percent lower than New Hampshire's.

"HB 1413 provides a first step in medical malpractice reform, and will help keep physician specialists from leaving New Hampshire to practice medicine in states where insurance premiums are lower," according to a statement from the New Hampshire Hospital Association.

Opponents say that the pre-screening process is unconstitutional and hurts plaintiffs who cannot afford legal costs if they lost their case.

"The New Hampshire Supreme Court has previously addressed the constitutionality of pre-litigation requirements in medical malpractice cases, holding that a requirement to give notice of intent to sue at least 60 days before suit was a procedural hurdle which has the potential to prolong the time and increase the cost of medical malpractice litigation," according to a January 5, 2004 minority report written by Dugan, an appointee representing the NHTLA on the legislatively mandated Commission to Study Professional Malpractice Claims under RSA 519-A. The report was subsequently withdrawn from the record and the Commission recommended HB 1413. However, Dugan stands by his assertion that the pre-trial screening hearing is unconstitutional, and adds that it would also discourage lawyers from taking smaller, legitimate claims because of the increased cost of preparing the case for trial.

Senate Bills Affecting Testimony Due for Action

Two of five Senate bills, all introduced by primary sponsor John T. Gallus (R-Berlin) on January 7, 2004, passed the Senate with amendment and are in committee. SB 452, relative to testimony of expert witnesses, and SB 465, relative to testimony of witnesses about confidential settlements, are due out of the House Judiciary Committee next week. The other three, SB462, relative to limits on non-economic damages in medical injury actions (capping pain and suffering awards at $250,000); SB463, relative to limits on attorney contingency fees in civil actions for medical injury (to 15 percent); and SB 464, relative to periodic payments of future damages in medical injury actions (paying awards in installments by the losing party), all have been referred for interim study.

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