Arbitrate More, Give In to Greed Less

Letter to the Editor
Wall Street Journal
10-13-03

In regard to Jane Spencer's Oct. 1 article "Signing Away Your Right to Sue1 -- In Significant Legal Shift, Doctors, Gyms, Cable Services Start to Require Arbitration":

I have been a consultant for attorneys and insurance companies -- on both sides of medical malpractice cases -- and have been a witness to the strengths and weaknesses of arbitration vs. litigation to settle differences. Early in my practice, in 1978, I joined a cooperative of 1,900 other California M.D.s who had formed a non-insurance entity, technically a self-funded trust fund, to manage medical malpractice claims. Insurance companies seemed little interested in holding the line against zooming premiums; they too often generously paid bogus claims and passed on their "losses" to us as higher premiums, after an expensive and prolonged run through the court system.

Our group uses arbitration to speed the route to settlement, quickly pays meritorious claims and fights the fake ones toe-to-toe. This approach lowers administrative and legal defense costs, gives more money to deserving patient-plaintiffs and that translates to lower premiums for doctor-members. And stabilization of premiums helps keep our fees from rising.

Such leveling of premiums plus the good luck of practicing in California has made liability coverage here reasonable, unlike in such less-enlightened states as Nevada, Florida and Michigan. In 1975, in a rare moment of good sense, our legislature, under unprecedented public pressure, finally and bravely stood up to the trial lawyers and passed landmark legislation capping payouts to injured patients for "pain and suffering," yet still allowing payment for bonafide economic loss. Equally significant, attorney fees were legislated back to earth.

It worked then, and still does, despite repeated attempts by the lawyers to bring back the good old fat-fee days. Based on my 25-year history in the practice trenches, I see arbitration as a winner for everyone, except, of course, those trial lawyers whose greed was fed by windfall fees that took money indirectly from doctors' pockets but in reality from their own injured clients.

Litigation is neither time- nor cost-effective. Arbitration speeds up the process and provides a less theatrical forum than the courtroom. Also, arbitrators are, by education and experience, better equipped to dispassionately analyze the often complex scientific and technical issues. Arbitration, by deducting emotion and restricting immaterial, unending "discovery" -- by both sides -- gets the job done faster; not always perfectly but to closure. Some of my best friends are lawyers and even they, when relaxed over a beer or two, will reluctantly agree that the tort system is unreasonable, expensive and out of control. They even whine that their malpractice premiums have become unreasonable. Ah, the sword does have two edges, indeed.

Robert Kotler, M.D.
Beverly Hills, Calif.