Can You Settle a Medical Malpractice Claim Without a Lawsuit?

It's rare for a medical malpractice case to be resolved before a lawsuit is filed, but resolution before trial is common.

Medical malpractice cases are fairly unique among civil lawsuits. Unlike other injury-related cases, medical malpractice claims are usually subject to special rules that act as prerequisites for bringing the matter to court. And when negotiating a settlement, the medical malpractice insurers who typically represent doctors and other health care providers tend to be more aggressive than a typical general liability insurer might be.

These two factors combine to make it fairly rare for a medical malpractice claim to reach settlement before a lawsuit is filed. But that doesn’t mean settlement won’t happen.

Notice and Other Pre-Lawsuit Requirements

If you think you've been harmed by a health care provider's medical negligence, before you can begin negotiating a medical malpractice settlement, you'll need to put the provider (and/or their liability insurer) on notice that you intend to take some kind of action. There can be no settlement until both sides come to the negotiating table.

This notice may be as simple as a phone call or letter from you to the doctor, but in many states you're required to take more formal steps, especially if your allegations will eventually form the basis of a medical malpractice lawsuit. And once a health care provider is on notice of a potential malpractice claim, settlement talks will probably have to wait.

Medical malpractice insurers require covered health care providers to immediately notify them of any potential liability claim. Failure to do so can result in a denial of coverage. So if you suspect you were harmed by malpractice and you'd like to resolve the matter quickly and somewhat informally, your desire to settle may be irrelevant.

Once a medical malpractice insurance company gets involved, they will likely force you to file a medical malpractice lawsuit in court and comply with all formal pre-lawsuit requirements before they will even begin to discuss the prospect of settlement. Insurers know there are more procedural hoops for medical malpractice plaintiffs to jump through compared with a typical injury case. Specific requirements vary by state, but a "certificate of merit" or similar filing is often necessary, in which a qualified medical expert offers his or her sworn opinion that the case is valid. (More: How to file a medical malpractice lawsuit and how to prove medical malpractice.)

In rare cases, doctors are self-insured and will agree to negotiate a settlement, since they are not burdened by any reporting requirements. Even more rare is the situation where an insured doctor informs his insurance company of your intent to settle and receives permission to settle the claim without any involvement from the insurance company. This generally only happens in cases that are on either side of the spectrum: where harm was extremely minor or what happened was a clear mistake on the doctor/provider’s part. Learn more about when it’s medical malpractice—and when it isn’t.

Nine times out of ten, once you put a physician on notice of your potential medical malpractice claim, they will immediately notify their insurance company, and you’ll likely need to file a lawsuit and play by the court rules in your state. Negotiating a medical malpractice settlement without some type of formal legal action (a lawsuit, pre-suit filing or some type of alternative dispute resolution) is extremely rare.

Settlement Talks Can Be Ongoing

Negotiations toward a medical malpractice settlement normally begin sometime after you either express your intent to file a lawsuit or otherwise comply with whatever procedural safeguards exist in your state when it comes to medical malpractice cases. As discussed above, by now the ball is rolling and the health care provider’s insurer is involved, so you and your attorney can try to negotiate a settlement.

Even after a lawsuit is filed and both sides start preparing their respective cases, settlement talks typically play out on the side, and an agreement can be reached at any point before trial. Unlike in other non-malpractice personal injury cases, a defendant health care provider often has the ability to accept or reject a proposed settlement despite the insurance company’s potential objections. This kind of freedom typically exists in states that require doctors to report medical malpractice settlements, which could affect licensing, future employment, and insurance rates. While medical malpractice cases do usually settle, it’s often for far less than what a typical personal injury claimant might receive. Learn more about the challenges of winning a medical malpractice lawsuit.

Using Alternative Dispute Resolution in a Medical Malpractice Case

Two of the most common alternatives to the medical malpractice lawsuit process are facilitative mediation and formal arbitration.

Facilitative Mediation

Facilitative mediation is a form of alternative dispute resolution that utilizes a neutral facilitator who seeks to find common ground between the injured patient (the plaintiff) and the health care provider (the defendant).

The facilitator in a medical malpractice case mediation is normally a medical malpractice attorney who understands the nuances of these cases. The hope is that the facilitator can talk with each party frankly about the strengths and weaknesses of their respective positions, and can nudge each side toward a settlement amount that might be acceptable—particularly in light of the fact that the parties are avoiding the cost of litigation.

Formal/Binding Arbitration

Formal arbitration is a contractual alternative to a lawsuit or trial. In a formal arbitration, the parties agree to allow a panel of attorneys (usually one plaintiff-oriented attorney, one defense-oriented attorney and one neutral) to hear their case and adjudicate it on the merits. Parties are afforded the opportunity to save a considerable amount of money when compared to trial, while still being allowed to present their case. But formal arbitration is binding and should not be undertaken lightly. Courts are very reluctant to overturn or otherwise alter decisions made by arbitration panels, particularly when an arbitration award is reasonable in light of a potential jury verdict. Learn more about using arbitration to resolve a medical malpractice claim.

A Medical Malpractice Attorney Is Your Best Ally

Medical malpractice cases are notoriously complex. Application of the law to the facts surrounding your injuries, the rules governing how you can proceed with a claim, and the contentious give-and-take between the parties are all best left to an experienced professional. Learn more about finding the right medical malpractice lawyer for you and your case.

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