AAOS Now

Published 8/1/2012
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James Ogilvie, MD; David H. Sohn, JD, MD

Joint and Several Liability Reform

Tort reform has been widely advocated as a means to help control healthcare expenditures by reducing the practice of defensive medicine. Much attention has been focused on capping noneconomic damages, mostly due to the real-world savings seen when caps were implemented in California and Texas. However, the influence of trial lawyers at the federal level makes implementation of these caps on a national level unlikely, which has raised interest in noncap reforms. One such reform is joint and several liability (JSL).

What is JSL?
JSL is a form of liability that extends the entirety of blame to any of the defendants, regardless of the actual proportion of fault. For example, a plaintiff sues both the physician and the nurse involved in his care. The doctor is found to be 5 percent at fault, while the nurse is found to be 95 percent at fault. Under JSL, the plaintiff may pursue the physician for 100 percent of the damages.

The legal doctrine of JSL has its origin in antiquated contract law. When a promissory note is written with more than one person owing, the creditor may pursue any of the cosigners of the debt for the entirety of the debt. This relieves the creditor of the responsibility of going to trial against each and every codebtor. The obligation is thus joint and several.

In medical malpractice, however, this is not necessary. The plaintiff has already gone to trial against all the defendants, so there is no cost savings to the court system to have joint liability.

In addition, contract law and medical malpractice are not really the same. An implied partnership and understanding of shared risks exists in contract law: If one partner defaults, the other will assume the entirety of the debt. In medical malpractice, however, such an implied partnership may not exist. Yet this is the current legal environment in many states.

JSL and medical liability lawsuits
One problem with JSL is that it encourages plaintiff attorneys to sue many defendants, particularly those with deep pockets. Regardless of degree of fault, if even a fraction of liability can be established against the defendants with good medical liability insurance, the plaintiff’s attorneys can ensure a hefty payout.

This creates an incentive to sue not the individual who made the error, but those involved in the case who happen to have good medical liability insurance. This goes against common tort principles of punishing negligence and instead punishes those with medical liability insurance.

JSL also encourages the practice of defensive medicine. When physicians can be sued regardless of fault, they will attempt to protect themselves by ordering tests and requesting referrals. This is costly to the nation; defensive medicine has been estimated to cost between $76 billion and $126 billion per year.

JSL also increases medical liability insurance premiums. When an actuary calculates premiums, the insurance company must include the possibility that the insured provider may be held liable for an entire award through JSL, thus increasing the cost of coverage.

The degree of shared liability in JSL varies from state to state. For example, in Ohio, a defendant who is found liable for 51 percent or more of the fault is responsible for the entire amount of the claim if the other defendants are unable to pay. Defendants who are liable for less than 50 percent are held responsible only for their individual percentage of the judgment. In West Virginia, the threshold is 25 percent. (List of current JSL laws in all 50 states.)

Some state laws may protect defendants to some extent by not allowing the impact of allocation to be disclosed to a jury during the proceedings. Such a disclosure could create an allocation bias against those with deep pockets.

Contributory or comparative negligence—in which a plaintiff’s actions were significant factors in an unfavorable outcome of treatment—may mitigate a claim and is allowed in some states. However, the claim may be too difficult to adjudicate or may be ignored if obvious negligence has been demonstrated on the part of the healthcare provider(s). Under JSL, then, those with deep pockets pay.

Tort reform
On the national level, JSL reform could reduce healthcare expenditures by an estimated 1 percent to 2 percent, which translates to between $2.6 billion and $5.2 billion per year.

In contrast to JSL, the apportioning of responsibility among providers is a rational approach that passes the fairness test. It protects the defendant by restricting the percentage of the judgment payable to the percentage of fault responsible. Some states have laws that instruct juries, or judges who hear cases without juries, to apply the apportioned responsibility doctrine rather than JSL. Due to the wide jurisdictional variation of statutes regarding JSL, action through individual state legislatures may be the most efficient way to enact change.

Summary
As state and local medical societies become engaged in the tort reform process, reference to specific changes that allow several liability—rather than JSL—should be made, along with the plea that defendants in medical liability cases be treated in an evenhanded way. Healthcare dollars should not be sacrificed for an unreasonable JSL doctrine.

James Ogilvie, MD, and David H. Sohn, JD, MD, are members of the AAOS Medical Liability Committee. They can be reached at feedback-orm@aaos.org

References

  1. Weinstein SL: Medical liability reform crisis 2008. Clin Orthop Relat Res 2009;467(2):392-401.
  2. Kessler D, McClellan M: Do doctors practice defensive medicine? Quarterly J Economics 1996;111(2):353-390.
  3. Ballasy N: Howard Dean: Democrats Left Tort Reform Out of Health Care Bill Because They Feared 'Taking On' Trial Lawyers, in CNSNews.com. 2009.
  4. Avraham R, The Impact of Tort Reform on Employer-Sponsored Health Insurance Premiums. National Bureau of Economic Research, Cambridge, MA, 2009.