This is submitted at the suggestion of fellow DRI Board member Chuck Cole. It is a personal perspective and does not represent the position of DRI or any law firm. The article appeared in SAN DIEGO M.D. NEWS of SEPTEMBER 2006.

Should Physicians Utilize Arbitration Agreements?

MISCONCEPTIONS

I was recently asked to defend a physician in a malpractice action who I previously represented in two jury trials, both resulting in defense verdicts. I was surprised to discover the physician had since implemented an arbitration agreement in his patient registration materials, apparently at the recommendation of his malpractice insurer. Plaintiff’s counsel as a result sought to compel arbitration. Many believe that physicians should utilize arbitration agreements as a condition of patient care and in fact, some malpractice carriers now require their use. The presumption is that arbitration will result in greater efficiency, less cost, and will generally yield a better result. In San Diego County however, my personal experience causes me to question such “conventional wisdom.”

REALITY
Implementation of “FastTrack” litigation rules in California nearly 20 years ago largely negate the argument that arbitration provides quicker case resolution than the judicial system. In Superior Court trial is now typically set within one year and the judges have the power to enforce deadlines. Of course, virtually all of the “expensive” aspects of a trial are also required in arbitration, including expert review and testimony, discovery, document requests and depositions. An additional cost element is the fee charged by the arbitrator(s). Arbitrators bill for each interaction with the case and typically charge $300 or more per hour. Incurring $5,000–$10,000 or more in arbitrator fees is not unusual.

IS ARBITRATION “FAIRER”?
Hit television shows such as “ER” have shown the “human” side of medicine, including personal triumphs and failures, yet surveys show the general public still holds physicians in high esteem. In contrast, arbitrators are likely to have significantly more exposure to alleged medical malpractice than the typical juror. Thus, they may be more apt to accept criticism of medical care. The selection of the “trier of fact” is another important consideration; in arbitration there is no voir dire, a French term meaning literally “to speak the truth.”It is the process in a jury trial during which the judge and counsel question prospective jurors to assess their suitability to hear the case. If any overt prejudice or bias is revealed, a juror will be excused for “cause.” Each litigant is also provided the ability to exercise peremptory challenges (in California usually six per side) which can be used to strike prospective jurors who are viewed with disfavor, although no open bias may be acknowledged. In arbitration, there is no equivalent of voir dire. A few years ago I defended a malpractice case in arbitration. Each side chose a “party” arbitrator, who then chose the third, “neutral” arbitrator. Following the arbitration hearing, the decision of the panel was adverse. Much later, I learned the “neutral” arbitrator had stated during deliberations “This is similar to what happened to my neighbor a few months ago and it seems typical of the poor care provided at [the hospital].” In a jury trial, I would have questioned potential jurors, and likely learned of such a pre-existing bias. In the arbitration there was no way to uncover the “neutral” arbitrator’s feelings. Additionally, unlike in a jury trial, arbitration panels tend to apply the rules of evidence very liberally—negating your attorney’s courtroom skill and trial experience when presenting a case. The ability to restrict the introduction of improper (or even damaging) evidence, or alternatively, to rely on beneficial evidentiary rules may be significantly limited. Ultimately, this can benefit a less experienced Plaintiff’s attorney.

CONCLUSION
Arbitration as a method of dispute resolution clearly has its place. In some jurisdictions it undoubtedly produces a quicker and potentially less expensive process. In San Diego County however, in my opinion careful consideration should be given to whether arbitrating potential claims is right for you. Health care providers are encouraged to discuss this issue with their insurance company and experienced medical malpractice defense counsel.

PS
In 2007 I did proceed to arbitration of the case on behalf of the aforementioned physician (ophthalmologist) involving Lasik surgery. The arbitration was not completed and a decision rendered until 16 months after the complaint was originally filed and the defense share of the arbitrator fees exceeded $20K.....and to add insult to injury the award was for the plaintiff despite an acknowledgment by the arbitrator in the decision that there were differing schools of thought in the ophthalmologic community regarding the standard of care issue and that there was clearly no consensus.

Robert W. Harrison
Wilson Elser Moskowitz
robert.harrison@wilsonelser.com

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