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Physicians see North Carolina tort reform as first step

Doctors and lawyers agree on an arbitration program but disagree on more comprehensive reforms.

By — Posted Oct. 8, 2007

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In a rare development, North Carolina physicians and trial lawyers found common ground on a new law that caps damages in medical liability cases that go to arbitration. But doctors see the measure as just the first step toward more comprehensive reforms.

On Aug. 31 Gov. Mike Easley signed the Voluntary Arbitration of Health Care Claims Act. It places a $1 million limit on total damages in medical liability cases when both parties agree to resolve their dispute through binding arbitration. The law requires attorneys on both sides to discuss the option to arbitrate with the parties involved. It also outlines a host of mechanisms designed to resolve claims more quickly and less expensively than traditional litigation. The statute will take effect Jan. 1, 2008.

"This is a strong start to a conversation about tort reform, and that's as important as anything right now," said Chip Baggett, legislative relations director for the North Carolina Medical Society, which backed the law.

Of particular significance, the measure marks the first time doctors in the state have had any cap on awards in the medical liability context, Baggett said. In addition, the statute sets up specific procedures and timelines for selecting arbitrators and conducting discovery. Hearings would start within 10 months of the parties' agreement. Arbitrators must issue a decision within two weeks of the hearing's completion, versus the average two to three years it can take for a case to make its way through trial.

Doctors hope that the measure, modeled after a similar 2006 law in Washington state, ultimately will help reduce medical liability insurance premiums.

Trial lawyers, meanwhile, also consider the voluntary system a fair alternative for both sides. Richard M. Taylor Jr., CEO of the North Carolina Academy of Trial Lawyers, which also supported the law, said it particularly would benefit patients who normally could not afford to pursue their claims through court.

"What we've been looking for is a way to make the medical liability insurance system, the litigation system and the health care system work better for everyone," Taylor said.

Arbitration was available before, he said, but the new law sets out a well-defined system that specifically addresses medical liability claims, making the process more predictable.

Pressing for more

The measure signals a hard-won victory for physicians at a time when broader tort reform efforts -- such as a $250,000 limit on noneconomic damages in all medical liability cases -- face increasing resistance at state and federal levels. North Carolina doctors vow to continue to fight for that cap.

The medical society also asked legislators for a system that lets defendants pay judgments in installments instead of one lump sum. Doctors also want to create a reporting system to track medical liability claims filings and judgments, said Rep. Bob England, MD, a retired family physician and a chief sponsor of the law.

Lawmakers opted for a piecemeal approach to tort reform after more comprehensive packages failed to make it out of committee, he said.

It's rare to get doctors and lawyers around the same table, Dr. England said, but the arbitration cap was something that stuck.

Trial lawyers have pledged to fight efforts they see as an attempt to restrict seriously injured patients' rights, such as an overall damage cap.

"Claimants and defendants have to understand that for catastrophic cases, [arbitration] may not be an appropriate proceeding," Taylor said.

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ADDITIONAL INFORMATION

Arbitration option

North Carolina's new medical liability reform measure includes provisions that:

  • Place a $1 million cap on total damages, as long as both parties voluntarily agree to binding arbitration.
  • Mandate that attorneys on both sides inform parties of the option to submit their claims to arbitration.
  • Require a decision within 14 days of completion of the hearing and resolution of arbitrated cases within approximately one year.
  • Outline procedures for selecting arbitrators and expert witnesses, and for conducting discovery.
  • Make each party responsible for its attorney's fees.
  • Allow limited appeal rights.

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