Excerpted from The Biggest Legal Mistakes Physicians Make: And How to Avoid Them
Edited by Steven Babitsky, Esq. and James J. Mangraviti, Esq. (©2005 SEAK, Inc.)
Download Free 646 Page E-book: The Biggest Legal Mistakes Physicians Make and How to Avoid Them
Physicians are, by their very nature, healers. As such, they often feel that they must take it upon themselves to solve their own problems through direct and personal action, such as they exhibit in their practice of medicine. In the field of litigation, however, physicians are often viewed as “deep pocket” targets, and serious mistakes are often made by physicians who believe that a simple and direct approach to a problem will resolve it. Unfortunately, this is not always the case, and many times such action will make matters worse. In this regard, it is important to consider the following mistakes in order to avoid potential litigation.
Mistake 1 Engaging in Driving Activity That Invites Litigation
Society has now become so litigious that it is impracticable to avoid all possible actions that could result in litigation. Physicians, in particular, must continually keep their guard up to avoid trouble areas that are likely to result in litigation. One area in which exposure to litigation arises involves the use of the automobile. When behind the wheel of a car, people tend to become one with the machine, losing their individuality and adopting a sense of invincibility. Unfortunately, they often also lose their sense of courtesy and care for others. Such conduct begs litigation. Physicians should not engage in dangerous or illegal activities while operating a motor vehicle. They should be overly cautious, and not succumb to road rage. Physicians who have consumed any amount of alcohol should not operate a motor vehicle, no matter how close they are to home or how “safe” they feel in operating the vehicle. Physicians should not use a cellular telephone while driving, but rather pull off the roadway to do so. Defending physicians who have engaged in such activities is one of the most difficult jobs for an attorney because the physicians may have lost the deep respect the public generally affords physicians.
Action Step Physicians should avoid risky or dangerous behaviors while operating a motor vehicle that often lead to litigation.
Mistake 2 Becoming Involved in Business Activities That Seem Too Good to Be True
Physicians looking for good investments may find themselves exposed to personal litigation in the form of bad business dealings. If a business deal seems too good to be true, a physician should not get caught up in it, should get out of it, or should not invest in it. Physicians who become involved with shady, fly-by-night business partners can expect to be sued. In addition, they will not appreciate having to sit next to those partners at the counsel table when the “get rich quick” schemes and scams are exposed in court. Such physicians will be painted with the same broad brush as their business partners but since they are likely to be the only defendants who will not be “judgment proof,” they may therefore be the only ones to pay for the wrongs of all those involved.
Action Step Physicians should closely investigate both business dealings and those involved in those business dealings before becoming involved. If physicians have suspicions going into a deal, they should not invest in it or lend their name to it.
Mistake 3 Failing to Have Sufficient Insurance Coverage to Protect Assets
Physicians often tell their attorney that they want the attorney to assist them with their actions so they “won’t be sued.” Unfortunately, there is no action that anyone can take to prevent being sued. Conversely, there are no guarantees against suit for taking what is perceived to be the right action. For a minimal filing fee to any court, anyone can be sued by anyone else. Right, wrong, indifferent, or frivolous, lawsuits are filed daily and must be defended. The key is to take actions to protect oneself if a suit is filed. Like defenses around the castles of old, barriers should be raised to protect the client and his or her assets. One of the best protections in this area is to have sufficient and adequate insurance coverage. Such coverage offers protection by providing a defense to the suit and money to satisfy any legitimate claims that may be brought. Physicians often overlook the value of paying for the defense of a lawsuit, when defense costs can often be more beneficial than the insurance indemnity amount.
Action Step Physicians should consult with their insurance provider to make sure they have sufficient insurance coverage to protect their assets. They should also discuss with their insurance provider any questions they have regarding coverage areas.
Mistake 4 Failing to Notify Insurance Providers When There Is a Potential Claim
Physicians who are involved in an accident (no matter how minor) or in any incident that may be covered by insurance should contact their insurer promptly upon discovering a potential claim. Some people fail to contact their carriers after an event has occurred for fear that it will increase their premiums. All insurance contracts have requirements that an insured promptly report any potential incident for which coverage may be provided. Failing to do so may result in an exclusion of coverage, effectively bypassing the very reason the insurance coverage was obtained.
Action Step Physicians should notify their insurance carriers promptly of any event that they feel may result in a claim. Having paid for the coverage, they should not jeopardize it by untimely reporting.
Mistake 5 Failing to Tailor Insurance Coverage to Activities
Failing to tailor one’s insurance indemnity to provide adequate insurance coverage to protect areas of individual concern is a mistake that can be avoided by consulting with a knowledgeable insurance agent who is skilled in all aspects of insurance. Physicians should get to know the agent in order to develop a close working relationship that can address their needs as their practice or life changes. For example, a physician who is an amateur pilot should be sure to have sufficient coverage to protect him or her from any negligence claims arising from the operation of an aircraft. A physician who is the owner of the building where his or her practice is located should have sufficient general liability insurance to defend suits or pay claims related to the operation of the building.
Action Step Physicians should meet at least annually with their insurance professional to discuss their liability insurance needs to ensure that they have proper insurance tailored to cover their individual activities.
Mistake 6 Attempting to Fix the Problem Alone When Threatened With Litigation
Physicians are skilled in the practice of medicine; they are not attorneys. The language of the law is precise, and facts can be misconstrued. Language used in everyday communication can take on a very different meaning under the law. The rights heard on television when a criminal is warned, “Anything you say can and will be used against you,” in civil litigation should be “Anything you say will be misinterpreted and used against you,” because just speaking to an adverse party gives that party license to embellish the facts. After speaking with the other side, that party invariably will say that the physician said something he or she did not, and the physician’s credibility will immediately be called into question from the start. Such conversations could result in admissions and additional exposure for the physician.
Action Step If threatened with litigation or if litigation seems to be inevitable, physicians should not contact the other side to attempt to resolve the matter. Instead, they should seek the advice and counsel of an attorney before any such contacts are made.
Mistake 7 Failing to Follow the Advice of One’s Attorney
Attorneys are available for advice and counsel, and they are required to take all steps under the law to protect their clients’ interests, taking into account their clients’ decisions regarding such advice. Attorneys will not make decisions for their clients, but will advise them against making unwise decisions. An attorney’s advice can be thought of as a road map. The attorney will advise a client as to what may be expected from the different paths available. Physicians should inform their attorney how such decisions will affect them personally and select the best path based on their life experiences. In litigation, however, it is imperative that physicians heed the advice of their attorney as to questions pertaining to the litigation. The attorney is the expert. In no other area can a physician’s decisions so quickly and drastically affect the outcome of their situation as by failing to follow the advice of their attorney in connection with a litigation decision.
Action Step Physicians should establish a relationship with a knowledgeable attorney in whom they have confidence. Physicians should trust the attorney to provide them with the advice they seek and follow that advice when given, especially in connection with decisions regarding litigation.
Mistake 8 Failing to Settle a Matter When Such Action Should Be Taken
Some matters should be resolved, plain and simple. Although one may not feel it is right or that he or she should be required to settle a particular matter, the fact remains that litigation is not only costly but also uncertain. The more financial risk involved in the potential outcome, the more important it is to follow this rule if a reasonable settlement can be arranged. The only way to be certain of the outcome of any lawsuit is to resolve it between the parties. If a matter can be reasonably and financially resolved and that is what the attorney advises, physicians should resolve it. It may not turn out exactly as they would have wanted, but it will turn out in a way they can accept.
Action Step When involved in litigation that can and should be reasonably settled financially upon the advice of counsel, physicians should settle the matter and not allow personal feelings to cloud good business judgment.
Mistake 9 Failing to Consider an Umbrella Policy
As a fail-safe measure for all physicians, an umbrella liability insurance policy is recommended. An umbrella policy provides an additional layer of insurance coverage for the policyholder that does not kick in until primary coverage is exhausted. Today, such a policy is a must consideration for a potential high-asset, high-income professional.
Action Step Physicians should consult an insurance professional about obtaining an umbrella liability insurance policy to provide additional insurance coverage for unforeseen events.
Mistake 10 Not Consulting Counsel in a Timely Manner
Many times a civil defendant will refuse to face the problem of a lawsuit hoping it will simply go away. If a problem has deteriorated to the point that litigation has been instituted, it will not simply go away. It is imperative that the physician seek counsel regarding any threatened or pending litigation as early as possible. It is even advisable to seek counsel’s advice if no litigation has actually begun but has been threatened. The attorney can be most helpful when he or she is involved from the earliest stages of the problem.
Action Step Physicians should not hesitate to seek the advice of counsel if litigation has begun or is threatened. Many times an attorney’s involvement in the early stages of litigation can minimize the damage or even resolve the matter.
Physicians involved in litigation must be proactive in protecting themselves. They can do that by avoiding activities that are likely to lead to litigation. They must adequately insure themselves to provide for adequate defense of any claims that arise. Once litigation has been initiated or threatened, counsel should be contacted and involved from the earliest possible stages.
- Bell, Top Courtroom Performance (Compendium Press 1994)
- Windt, Insurance Claims and Disputes (Shepard’s/McGraw-Hill 1988)
Phil D. Mitchell, Esq.
Peer Reviewed by: G
regory A. Reeves, Esq.
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