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Doctor Refuses to Settle Case; Can His Insurance Company Override Him and Settle Case Without His Consent?

The answer is, it depends.

It depends on whether the doctor has an older insurance policy that gave him the right to refuse to settle.

That's typically known as a 'consent policy'.

That means, in days of when this policy was popular that the only time the defense insurance company and their lawyer could begin to negotiate is if the doctor gave them consent to begin negotiating.

The problem with that is that many times when the insurance company wanted to settle, they couldn't do so. Even if they felt the case should be settled, if the doctor refused to consent to settle, he effectively tied their hands.

Their only option at that point was to proceed to trial and incur additional lawyer fees and the possibility of getting hit for a substantial verdict against them.

In more recent years, many of the professional liability insurance companies that insure doctors for medical malpractice have refused to include this 'consent' clause, which gives the doctor the right to decide if they can negotiate or even settle the case.

Often, the insurance company will weigh the merits of the case compared to the money they will pay out to litigate the case in order to come to a business decision about whether to begin negotiating and possibly settle the case.

These insurance companies no longer want to give the doctor the right to make that decision.

There are some insurance companies that wil allow a doctor to have that consent provision in his professional liability contract, but they make him pay an additional premium for that. 

Some doctors agree to pay extra for that right.

Some physicians do not.

If the doctor has a malpractice insurance policy that gives him the right to refuse to settle, then the insurance company cannot override him simply because they feel he's making a poor choice. 

Instead, they can have his defense attorney try and talk some sense into him.

They might also invite the doctor into their offices to try and explain why it's in his best interests to try and settle now before trial.

I remember vividly a case I was handling early in my career representing doctors and hospitals who were sued.

It was an obstetrical malpractice case.

I was a young associate trial attorney.

I was representing an obstetrician who was being sued in a brain damaged baby malpractice case.

We had an 'in-house' obstetrical expert who said this case was not defensible.

My client, the obstetrician, didn't believe him.

I had to hire a world-class obstetrician at a major NYC hospital who reviewed the medical records.

This 'outside' expert confirmed what our 'in-house' expert said.

This case was indefensible.

My client again didn't believe him.

The insurance company was frustrated since the doctor had a 'consent policy' and refused to consent to begin negotiations.

Yet, every medical expert who looked at the file confirmed that the doctor violated the basic standards of medical and obstetrical care resulting in severe injury to this newborn baby.

The doctor was adamant.

He wasn't going to settle.

He wanted to go to trial.

He knew better.

I obtained permission from the doctor's insurance company to set up a meeting with our outside medical expert and my obstetrician client. 

Rather than have my client listen to me about why we could not defend this case, I wanted him to hear it directly from our world-reknown obstetrical expert.

I set up the appointment for 2:00 p.m.

Trial was scheduled for the following week.

We didn't leave my expert's office until 4:20 p.m.

For the first 35 minutes of the meeting, my client was aggressive.

He was demanding.

He was saying how he had delivered 7000 babies in his career and what he did was appropriate.

My expert decided to show him, page by page, exactly what he did and why what he did was wrong.

My expert kept up a blistering critique of much of this doctor's care and treatment.

By the 40 minute mark, my client was no longer objecting to what was the expert was saying.

Instead, he was slowly coming to the realization that what my expert was saying made a lot of sense.

In fact, there were many times during this teaching session when my client couldn't even answer my expert with a coherent explanation about why he did what he did or what alternatives he had available.

By the time we had finished this meeting, I was exhausted.

As we were walking out of my expert's 5th Ave. office, my client turned to me and quietly said "Ok, I give you consent to settle."

This was a case that needed to be settled.

It was in my client's best interests.

We had no reasonable defense to use to explain his medical conduct.

The following week, with the help of the trial judge, I was able to settle this case within the amount of the obstetrician's malpractice insurance policy.

Had the doctor refused to settle, I would have had to try the case without a medical expert. 

That would have been the kiss of death for our case.

The attorney for the parents of this brain damaged baby would have destroyed our crediiblity during the trial.

"Ladies and gentlemen, let's look at our experts who testified here. We brought you a world-class obstetrician to explain how this treatment violated the basic standards of medical care. Who did Oginski call to testify on their behalf? 

NO ONE!

Not one single medical expert."

It would go downhill from there.

To learn more about whether an insurance company can override the doctor if he refuses to consent to settle, I invite you to watch the video below...