Avoiding Costly Litigation by Using Alternative Dispute Resolution

By Jason E. Lopata, Esq.

I’m always perplexed by the ease at which certain people shoot off the phrase “I’ll sue,” without thinking of the practical considerations involved in such an endeavor.  Court costs, legal fees, the amount of time, effort and attention devoted to the lawsuit – these almost always seem to have a higher price tag then most would think.  And depending in which jurisdiction you reside, the wheels of justice may not spin at a rate that seems appropriate to your current frustration or anger with another individual or entity.   But as a physician with a legitimate complaint who doesn’t want to sue – where does that leave you?

Mediation, one of the forms of alternative dispute resolution, is gaining popularity now more than ever.  Perhaps it’s because everyone is more cost conscious in these leaner economic times.  This is particularly true for the complex world of medical malpractice litigation, where if a matter proceeds through to trial, the costs can easily reach six figures for all parties involved.

Recently, New York and Connecticut have initiated new programs designed to ease the Courts’ backlog of medical malpractice cases and attempt to reduce costs associated with such litigation.   In New York City, Beth Israel Medical Center, Mount Sinai Medical Center, New York-Presbyterian Hospital, Maimonides Medical Center, and Montefiore Medical Center have agreed to participate in a pilot mediation program.  Each hospital will implement a program whereby it provides early disclosure to a patient and/or patient’s family when a medical error occurs and makes an early offer of compensation, if appropriate.   If out-of-court settlement is not initially successful, the case is sent to a mediation hearing.  If mediation is unsuccessful, only then would the case proceed to litigation.

In Connecticut, there is a new mediation requirement for all medical malpractice cases, which became effective July 1, 2010.  Requiring a “period of mediation” for 120 days before the close of pleadings (i.e. the initial written, court-filed documents required by each party), the court is hoping to reduce the number of smaller or less meritorious claims before litigation makes settlement more difficult.  Cases settled with early stage mediation involve a fraction of the time and cost, rather than taking cases through costly components of litigation such as medical records discovery and expert witness testimony.  The Connecticut Medical Society believes that mediation is one method to reduce medical malpractice insurance premiums throughout the industry.   That is also the goal of the New York hospital project, which is being funded by a $3 million grant provided by the federal government.   New York and Connecticut join states such as Maryland and Wisconsin, which have already been using mandatory alternative dispute resolution, including “early neutral evaluations,” for medical malpractice cases.

For physicians, mediation also has practical uses outside of the early resolution of medical malpractices claims.  It can also be a useful tool to consider for many of the disputes that arise within a practice partnership or employment setting.  Whether it is for the negotiation of a physician employee now joining the practice’s partnership or the reformation of an existing partnership agreement to reflect the current status of the practice, each physician need not hire an individual attorney at the first whiff of disagreement between parties.  Mediation can also be used for disputes with subcontractors, vendors, and independent contractors.  An impartial mediator can help facilitate a quicker resolution that has many more advantages than traditional court-based litigation.   These advantages include more party involvement in shaping the resolution, less likelihood of an all-or-nothing outcome imposed by a judge or jury, more opportunities for creative solutions (rather than just monetary judgments) and the opportunity to conduct hearings in a less formal, more relaxed setting than inside a courtroom.

So the next time you feel that urge to call your attorney and rush into the courthouse, or you’re tempted to shoot off the ever popular phrase “I’ll see you in court” – stop and think of the alternatives first.  Mediation can bring parties to the table in a less confrontational manner and hopefully help to create a resolution that is more palatable for everyone involved, all for a fraction of the time and costs involved in full scale litigation.