Presented by Hall Booth Smith, PC · 2011 - 14 48,922 11,089 7,487 4,362 2015 - 18 84,295 24,910 19,988 11,646 Change 72% 125% 167% 167% ... •Do this on an aggressive timeline •Factor-in

Bridging the Gap in Risk Management and Patient Safety

August 18-21, 2020

Presented by Hall Booth Smith, PC

John J. Goran, Esq.

Geoffrey D. Sessions, Esq.

Denise L. Dawson, Esq.

Why are we here?

To find a better way…

Severity – A crisis upon us

• We have had an increase in severity or amountof verdicts.

• Since 2013 there have been more than 80 casesin medical malpractice claims with verdicts inexcess of 20 million dollars.

• While immediate history of frequency is downturned, we predict it will increase in all types ofclaims.

Severity of Large Losses

Closure Year

5M x 5MIndemnity Severity




2011 - 14 48,922 11,089 7,487 4,362 2015 - 18 84,295 24,910 19,988 11,646

Change 72% 125% 167% 167%


August 18-21, 2020

Severity• Reasons for this increase in severe or aberration

verdicts:• Decrease in skill and experience of the defense bar

• Third party bill review, rate pressure due to soft market, lack of trials, lack of willingness to train


August 18-21, 2020

Frequency of Large Losses


August 18-21, 2020

Cause & Effectthe downstream effects of being complacent

Status Quo Leads to Increase in Severity & Frequency

But it’s always been done this wayPlaintiff leads

• Plaintiff develops the damages, and defense is notinvolved in those early stages of development

• Defense is focused on challenging liability throughstandard of care or causation

• Defense should not spend too much time on damages,because that may undermine the standard of care orcausation defenses

Average Claim Severityby settlement year

All Departments

Ground-up: 5.8%

Excess: 2.3%

Causes of increased frequency & severity

• Well Funded Plaintiff Attorneys

• Enhanced plaintiff attorney

intranet and communication

• Publicity of large

settlements and verdicts

• Third Party Liability

Funding

• Plaintiff strategies- reptile

• Lifecare Plans

• Settlement of co-defendants

financing plaintiff case

• Complacent Claim Handlers,

Complacent Defense Attorneys

Additional challenges• Exaggerated damages are killing the system

oPlaintiffs provide inflated numbers

• Economic damages are being wildly exaggerated

Time for a Change

Changing the rules of the litigation gameDefense industry response

Anchor the value of the

case (collateral sources, trusts,

annuities)

Develop an Early Resolution strategy

Mandate early evaluation including defense costs

Look at the whole case including damages for settlement and trial

Make Early offers

Uniform and consistent

strategic approach to trial

or settlement

Determining the value of a case• Crucial to develop own value number – do

not rely on Plaintiff’s calculations

• Do this EARLY, through discovery and

expert review

• Checklist of experts and discovery to

provide the necessary information and

accurately set the value

• Do this on an aggressive timeline

• Factor-in defensibility, exposure and

defense costs

• Factually based and supportable evidence,

respect common sense of the jurors

Time is of the EssenceDevelop an early resolution strategy

• Early, realistic and fair review of case in 120days

• Settlement or trial

o WARNING → Posture case for trial NOTsettlement.

• Value number and strategy stays in placeunless drastic change-must be a consistenttruth teller

Developing the Value-IAnchor the value of the case

• Undermine the life care plan

• Use the Plaintiff ’s life care plan toestablish your case

• Use the Plaintiff ’s economist toestablish your case

• Use life expectancy to show real costs

• Plaintiff ’s create tools to inflatedamages

Developing the Value-IIAnchor the value of the case

• Make the first offer (ANCHOR), do not ask for ademand

• When you have a number, be prepared to offerit, appropriately and strategically

• Before mediation - negotiate based onsupportable value concepts

• Only mediate to close final gaps

• Have an opinion on defensibility (no 50/50)

• We are skilled in dealing with sympathy

• Purposeful evaluation ranges (not $1M-$30M)

• Concise and logical evaluation reports (no morethan 15 pages)

Time is moneyMake early offers

• The data shows that resolution of a claim within 6 months and/or prior to the suit being filed can lead to a cost reduction of as much as 50%.

• Develop damages at beginning of case to establish a baseline early.

Staying with the valueConsistent strategic approach

• Stay Consistent: Negotiate settlement based on theanchored value

• Take to trial, if settlement is not in the anchored range ofvalue

• Reevaluate only in the event of changing circumstances ornew information

Huh? Anchor at Trial???

Jury studies show that when defendants produce no testimony contesting plaintiff ’s damage estimates, jurors felt they had no choice

but to rely on the plaintiff ’s damages evidence

Anchoring studies

265 mock jurors

Four groups:

1. Contested liability and offered alternative damages

2. Stipulated liability and offered alternative damages

3. Contested liability and provided no suggestion for damages

4. Stipulated liability and provided no suggestion for damages

• Awards lower – by 43% – when the defense offered an alternative

damages amount (i.e., anchoring and adjustment heuristics)

• On average, damage awards were also 22% lower when defendant

stipulated to liability – though all found liability

Additional findings

Lasting Effects

Anchoring effects

persist even when the

anchors are extreme.

One study tested

demands ranging

from $100 to $1 billion.

Both, the absurdly low

and inordinately high

demands produced

anchoring effects.

Jurors Remember

Within 31 actual

audiotaped jury

deliberations; there

were 1,624 references

to the attorney’s

recommendations –

mentioned by 86% of

the jurors.

Logical?

Anchors are strongest

when supported by

logic: (e.g., X times

the amount of

medicals; X amount

for each year of

defendant’s poor

conduct)

Starting Points

Even jurors who

criticized the

plaintiff’s anchors as

too high or

outrageous, use the

number as a starting

point (e.g., “I’ll give

them half.”)

Minimums

Some attorneys worry

juries will interpret an

alternative response

as a concession of

liability at worst, or a

damages floor at

best.

Defensibility:

Low or

Moderate

Severity High:

TRIAL

Determine risk tolerance

number within 120 days

and then if does not settle

Defensibility: High

Severity Low or

Moderate:

TRIALStop funding the plaintiffs

against us. Clog the court

system forcing judges to

return to their roles as

gatekeepers

Severity Low,

Moderate or High:

Establish your anchor

number and drive

early SETTLEMENTto it. But try case if number

is not right

Settle or Try?

Introduction of National Exposure Team


August 18-21, 2020

National Exposure Team

✓ With a National Team, the focus is on a “teamapproach” to the defense of catastrophicinjury cases

✓ The program is designed to ensure that thesedangerous cases have the appropriateresources dedicated to them

Here when you need us

DEFENDING CATASTROPHIC INJURY CASES

• Utilizing seasoned and responsive trial counsel• Seasoned associates• Nurses• and paralegals



August 18-21, 2020

ReviewReview the litigation file

created by the local

counsel, as well as the

pertinent medical records,

depositions, reports and

other file materials

Assist

Assist in the retention of

experts, recommending

additional areas of

specialization or particular

experts in germane fields

ExpertiseBring special expertise

at dealing with plaintiff

theories (reptile theory)

Strategy

Devise strategies for

successful and timely

resolution of claim

National Exposure Team What we do


August 18-21, 2020


• The retention of experts

• Recommending additional areas of specialization or

• Offering experts in germane fields


National Exposure Team Assists Local Counsel


August 18-21, 2020


• National exposure team devises a strategy, with local counsel, in the evaluationof liability and damages, incorporating the program as discussed by mycolleagues, for a successful and timely resolution of the case



August 18-21, 2020


Some cases may require the national exposure team to be more proactive

in that respect, national counsel may:

• Co-counsel with local counsel, or

• National counsel may be asked to step into the role of lead counsel



August 18-21, 2020


THE NATIONAL EXPOSURE TEAM MODEL INVOLVES:

• An aggressive state of the art defense on liability

• A determined identification of causation defenses

• An innovative approach to damages that helps win cases or minimize recovery



August 18-21, 2020


• Developing and end vision of where the case should ultimately conclude,based on a factual analysis and then getting there, is the hallmark of aNational Counsel Program.


If that’s not enough….

Time to get back to work and retake control

Interesting Note:

…out of the 7% of claims that ended in a jury verdict,

the jury found in favor of the defendant 90% of the

time.

-MPL Association Data Sharing Project (2013-2017)

Hall Booth Smith, PC

Miami

Jacksonville

Palm Beach

Tallahassee

St. Petersburg

Documents

Presented by Hall Booth Smith, PC · 2011 - 14 48,922 11,089 7,487 4,362 2015 - 18 84,295 24,910 19,988 11,646 Change 72% 125% 167% 167% ... •Do this on an aggressive timeline •Factor-in