By: Bill Bower
June 27, 2023 — In 1989, I began practicing law as a civil defense attorney in Chicago. I had the privilege of working for a law firm and partner who allowed me to gain a wealth of litigation and trial experience as a young lawyer. The somewhat circuitous nature of my career path took me from trial attorney to Head of Claims for CNA Healthpro to Chief Risk Officer at Northwestern Medicine in Chicago and finally to my current position as SVP — Director of Healthcare at Gallagher Bassett. Over those 30 years, I tried or managed more than 300 medical malpractice cases to verdict. And in all those trials, I struggle to remember a time when I offered, or advocated offering, an alternative damage award for a jury to consider.
When I started practicing, the very notion of arguing dollars or, worse, suggesting a verdict number to a jury was completely taboo in any case in which liability was being contested. This was the typical tag line we all used: "Ladies and gentlemen, the facts and evidence in this case clearly establish that Dr. Bower complied with the standard of care and, pursuant to the instructions that will be given to you by the court, if you find in favor of the defendant, as I believe you must, you will have no occasion to consider damages." But that's where it stopped. At the time, presenting evidence on monetary damages, such as an expert economist, was placing too much focus on dollars, and a defendant offering a verdict number for the jury to consider was a sign of weakness. After all, why would a defendant be talking about an award unless they were worried about liability? As a young lawyer, or even as a partner, if I suggested to my senior partners at the firm that we should be putting on evidence related to damages or suggesting a verdict amount to a jury, I would have been rebuked, at best, and possibly shown the door.
How times have changed.
Today, there is no dispute that damage awards are on the rise. Terms such as "catastrophic," "nuclear," and even "thermonuclear" have been used to describe the compensatory verdicts being handed down by juries across the United States. The rise in such verdicts, and primarily the non-economic component (disability, disfigurement, pain and suffering, etc.) has far outpaced the rate of inflation. Indeed, the term "social inflation" has been coined to describe this phenomenon. The plaintiff's bar, often more cohesive than the defense in their efforts to share strategy, have worked diligently to understand and deploy tactics to increase jury awards. One of these tactics is known as anchoring.
The term anchoring in this arena refers to "a strategy to cause jurors to rely on a specific reference point, or 'anchor,' when evaluating damages in a lawsuit." The initial number, if not tested or specifically refuted, can become legitimate or reasonable. And even if considered "too much," juries often use this reference point to establish an award. You could ask: Why don't we just give 50% of what the plaintiff asked for? Isn't that more reasonable?" Well, the answer is "no" if the anchor was $50 million. A jury may move up or down from this number, but it remains a reference point for them to consider as they have no other understandable reference point. For most people who are selected to sit on a jury, this will be the first time they've been called upon to give an award, the first time they've rendered judgment in a case. Simply put, most ordinary individuals have no quantifiable idea of what pain and suffering are worth, the 'value' of disfigurement, for example. But, in their minds, the plaintiff's attorney does this for a living. Why not at least pay attention to the figure he or she suggests? Even if the jury agrees during deliberations that this number is too much, they will use it in their calculations. The skilled plaintiff's attorney knows this and uses it to his or her advantage. While anchoring is a tactic that can be employed by either side in a lawsuit, it is woefully underutilized by the defense. Traditional notions of "admissions of guilt" and "focusing on numbers" still carry the day. This needs to change.
A path forward for the Healthcare industry.
From the defense perspective, we need to start putting on a case for damages, and we need to start anchoring. We need to learn and employ tactics to call out the plaintiff's anchor before the jury and to remove the anchor (or lower it) by providing our own value proposition. Simply labeling the plaintiff's ask as "outrageous" or "unreasonable" isn't sufficient. We must provide a counter anchor — an actual number — that has a solid foundation. Perhaps we share the testimony of a defense economist and life care planner or detail the reality of what a plaintiff could do with the "reasonable" number. Or, if allowable, we could take a counter anchor identified during jury selection and have that same number available at closing, with subparts identifying the reasonableness of such an award.
From my experience supporting clients as a member of Gallagher Bassett in the Healthcare space, anchoring and providing a "damages defense" represents a certain cultural change. And like any change, this can bring about feelings of uncertainty. After all, for many this is new territory. But we need to move beyond the discomfort of "trying something new" and venture onto a pathway of proactively mitigating damages.
Regardless of the specific strategy, the defense should actively weigh in on setting the anchor or offer its own proposition. The increasing medical, claim, and litigation costs, on top of rising social inflation, pose a significant threat to organizations when combined as a result of adverse outcomes. These conditions will only continue to evolve and, with them, so should our strategies to combat them.
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