Bar News - September 14, 2012
Opinion: New Hampshire’s Early Offer Trap
By: Mark Abramson
Attorney Brandon Giuda, the legislator who drafted much of the Early Offer statute, recently wrote that the law, which goes into effect on January 1, 2013, is "an exciting option for all involved in an unfortunate case of medical malpractice."
I have been involved in the medical malpractice field for more than 35 years, representing thousands of New Hampshire patients and family members whose lives have been ruined by medical errors. The Early Offer law is not an exciting option for them. It is a trap designed to prey upon those who are so desperate that they will give up many of their legal rights in exchange for the illusory promise of a quick and fair settlement.
Attorney Giuda acknowledges the complexity of the 13-page bill that creates the Early Offer program. The idea originated with a law professor in Virginia who believes that the current legal system should not apply to medical injury cases. The law, as rewritten by attorney Giuda, is premised on the notion that victims should be allowed to give up their legal right to be "made whole," in exchange for a drastically limited recovery that is theoretically paid more quickly. As attorney Giuda wrote, the statute promises an opportunity for "a quick and fair settlement." No one would argue against a system that delivers on such a promise. Unfortunately, the Early Offer law does not.
For centuries, New Hampshire common law has proceeded on the understanding that a person injured by the legal fault of another is entitled to a sum of money to compensate for the harm. In fact, New Hampshire juries are commonly instructed by the judge that, "The law cannot do the impossible by turning back the clock and eliminating the accident from ever having occurred; [however,] it does provide a means by which the plaintiff is made whole, by awarding full, fair and adequate compensation."
To make the victim whole, New Hampshire law recognizes the right to recover damages for: a) medical expenses incurred prior to trial; b) medical expenses likely to be incurred in the future; c) lost wages incurred prior to trial; d) earnings likely to be lost in the future; e) physical pain and emotional distress prior to trial; f) physical pain and emotional distress that will probably be experienced after trial; g) loss of enjoyment of life prior to trial; h) loss of enjoyment of life likely to be experienced after trial; i) spouse’s loss of the victim’s companionship, support, and services prior to trial; and j) spouse’s loss of the victim’s companionship, support, and services likely to occur after trial.
When a malpractice victim enters into the Early Offer program relying on the promise of a quick and fair settlement, he or she immediately gives up the right to seek damages for physical pain and emotional distress and loss of enjoyment of life, and his or her spouse gives up the right to seek damages for loss of companionship, support, and services. In other words, he or she will not be made whole, and the medical care provider will pay significantly less money than it otherwise would. Looking back at our 20 most recent medical negligence cases, had the victims entered into the Early Offer system, the offer would have been approximately eight percent of the actual settlement amount. So, contrary to attorney Giuda’s assertion, the Early Offer program will not deliver on the promise of a "fair" settlement.
Nor is it at all clear that the Early Offer will provide a quick settlement. The law gives medical care providers at least three months to decide whether they will even make an offer. It also allows medical care providers to request a medical examination of the victim, which extends the time for the provider to make an offer by another month. If the provider chooses to make an offer after three or four months, it will likely not be for the amount demanded. The statute allows the victim to challenge a low-ball offer by requesting a hearing, but that extends the process by about two more months. So, after five or six months, the victim will finally know what the offer is. However, at least with respect to any future damages, that offer is hardly firm.
The Early Offer law permits medical care providers to pay future lost wages and future medical bills as they are incurred rather than in a single lump sum, as would occur in a malpractice lawsuit. It also gives medical care providers an opportunity to challenge each weekly lost wages claim and every single medical bill by requesting a hearing before a hearings officer or even demanding that the victim submit to a medical examination. The bottom line is that a malpractice victim who enters into the Early Offer program assuming the the matter will be resolved finally and quickly is likely to be sorely disappointed.
For those victims who commit themselves to the Early Offer program only to find after five or six months that they are not presented with a quick and fair settlement, the consequences are stark. If they reject the offer and file suit, they must ultimately obtain an award in excess of 125 percent of the Early Offer amount or they are required to pay the attorneys’ fees and expenses that the medical care provider incurred during the Early Offer process. To add insult to injury, they must purchase a bond before they file suit that will ensure payment of the providers’ fees and costs, in the event of an award less than 125 percent of the offer. This type of punishment for exercising one’s constitutional rights is unheard of in centuries of New Hampshire law.
Concern over the Early Offer program is not unique to the victims’ side. Two of New Hampshire’s leading medical malpractice insurance companies opposed the law and refused to guarantee that their policyholders would be covered if they participated in the program. And Gov. John Lynch, who has consistently declined to support measures favorable to personal injury victims, vetoed the bill. In his veto message, Gov. Lynch said the program does not sufficiently and fairly balance the interests of the general public with the interests of medical providers. Unfortunately, the veto was overridden.
Given these and many other compelling reasons for victims to avoid the Early Offer program, I am deeply concerned that it will ensnare only those who are most susceptible to the illusory promise of a quick and fair settlement. It is not enough to say the system is "voluntary" because few if any victims will understand the actual dollars they are giving up, and some that do will be too desperate to care. The Early Offer system is no better than the payday lenders who were forced out of New Hampshire when their 500 percent interest rates were capped by the Legislature.
Mark Abramson is a founding member of Abramson, Brown & Dugan, where he devotes his practice to representing plaintiffs injured by medical malpractice in New Hampshire. Attorney Abramson, his partners and his clients actively opposed passage of SB 406 in the Legislature.