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A Business-Judgment Rule for Med/Mal?

A debate between two legal bloggers kicks around the question of whether courts should apply a principle analogous to the "business judgment rule" to refrain from second-guessing doctors' decisions in medical malpractice cases. It all started Sunday, when Ted Frank at Point of Law, writing about a recent $30 million verdict in a Philadelphia med/mal case, noted that the case turned on a battle of the expert witnesses. He wrote:

"[O]ne immediately recognizes problems when juries are asked to decide between two experts about the appropriate treatment course. If reasonable doctors disagree, both treatment courses should be considered non-negligent. Otherwise, one jury could find treatment A negligent, while another jury can find the alternative treatment negligent, and doctors are effectively blamed for any bad result. Yes, I know no court adopts a 'business judgment' rule for medical malpractice, though this sort of discretion is given attorneys in legal malpractice cases. But why not?"

Frank's comment prompted a lengthy and considered reply from Peter Nordberg at Blog 702 on whether courts in med/mal cases should apply the more mistake-tolerant approach they traditionally take in reviewing the business decisions of corporate boards. The question, as Nordberg sees it, is  whether such a rule "could be tied to some acceptable standard for 'reasonableness' that would represent a clear improvement on the current regime from the standpoint of promoting consistent results that could also be accepted as falling within the broad limits of fairness and justice."

Nordberg writes that he strongly doubts that such a rule would lead to the development of a consistent and workable rule. Further, he notes a fundamental distinction between business and medical decisions:

"Corporate officers and directors have an inherent incentive to make good business decisions, because their economic fortunes are tied to those of their companies -- or so goes the argument. Malpractice exposure apart, what is the parallel economic incentive for health care providers?"

Frank follows with two replies to Nordberg. In the first, he explores the differences between legal malpractice and medical malpractice, concluding, "[I]t's hard to imagine lawyers willingly exposing themselves to the same sorts of litigation risks that doctors face." In the second, he addresses Nordberg's contention that corporate officers and directors have an inherent incentive to make good decisions. Franks notes that the business-judgment rule applies with equal force to directors and officers who leave a company:

"[T]here's no sliding scale that applies the business judgment rule with a tighter or looser hand depending on the surrounding circumstances of an officer's diversified financial portfolio."

Nordberg, of course, offers a reply to Frank. His may not be the final word.

Posted by Robert J. Ambrogi on June 20, 2006 at 05:17 PM | Permalink | Comments (2)


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