Who Files Personal Injury Lawsuits?

Temple University’s Beasley School of Law recently published a paper that debunked the common belief that poor people are more prone to file medical malpractice lawsuits.  According to the authors, some physicians defend their decision to refuse Medicare and Medicaid patients by arguing that socioeconomically disadvantaged patients tend to sue their doctors more frequently.  The paper cited a study by the Federal Office of Technology Assessment which proved the opposite — although 10% of the population received Medicaid benefits, Medicaid beneficiaries filed less than 5% of medical malpractice claims.

As personal injury lawyers, this article really struck a nerve with us.  In Texas, medical malpractice lawsuits have decreased significantly since the enactment of “tort reform” legislation in 2003, which was designed to protect doctors.  While doctors have received some benefit from the legislation in the form of slightly lower insurance premiums, we wonder whether any portion of those savings has been passed along to their patients.  Our doctor’s rates haven’t decreased since 2003.  Have yours?

But more important to the topic at hand, these legislative changes in Texas have dramatically affected the ability of low-income patients to find a lawyer when they are the victim of professional negligence.  The legislation placed a limit (or “damage cap”) on all “non-economic” damages awarded in medical malpractice lawsuits.  This damage cap establishes the maximum award for pain and suffering in these lawsuits.  With the damages cap, many lawyers will not take a malpractice case on a contingency-fee basis unless the doctor’s fault is indisputable.  If the fault is debatable, the financial risks to the lawyer are just too high.

For high-income individuals, however, it is much easier to find a lawyer.  The lawyers know that there is a separate category of damages — lost wages — that is not subject to any caps.  Thus, for example, if an individual making $200,000 per year is injured as a result of his doctor’s negligence, and misses a year of more of work, the potential damages that can be recovered in the case is nearly doubled.  As a result, it is much easier for high-income earners to find a lawyer.

Other tort reform legislation compounds the rich vs. poor disparity when looking for a contingency-fee lawyer in a personal injury case.  Texas has also passed legislation that limits evidence of medical expenses as an element of damages if the patient has been unable to pay the bill.  This “paid or incurred” rule translates into lower damage awards for economically disadvantaged people, who often cannot pay for their medical care.  If they go to free clinics or county hospitals, their damages in a lawsuit will be reduced.  And if the expected damages are lower, it will be harder to find a lawyer willing to take their personal injury case on a contingency-fee arrangement.

Despite these facts, the perception that “only poor people file personal injury lawsuits” persists.  On numerous occasions, we have spoken to affluent individuals who are contemplating a personal injury lawsuit.  These individuals often express some type of embarrassment or shame due to the fact that a lawsuit is going to be necessary to get the compensation they deserve.  They say things like, “I would ordinarily never consider a lawsuit,” or “I’m not litigious.”  They seem to feel there is some type of stigma associated with a lawsuit, or that filing a lawsuit goes against their core beliefs.

These negative perceptions of litigants are truly unfortunate, because the insurance industry is the only beneficiary of these unwarranted views.  The insurance industry systematically uses the public’s bias against lawsuits to pay much less than is warranted to the victims of negligence.  When an injured person attempts to settle their claim directly with an insurance adjuster, the adjuster often offers much less than the adjuster would offer to an attorney, knowing that low-income earners may be unable to find a lawyer and high-income earners may settle for less to avoid the perceived stigma associated with a lawsuit.  Don’t let this false bias against lawsuits affect your ability to recover the damages caused by the negligence of others.

At Powers Taylor, we routinely handle personal injury cases for clients from every social strata.  For low-income clients, we work with our clients to ensure that their case gets the attention it deserves. For high-income clients, we ensure that their case is handled with integrity and dignity.  In every case, we help our clients receive the compensation to which they are entitled under the law.



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