Doctor Fights Insurer over Binding Arbitration


What happens to doctors after they lose a malpractice claim? In many cases, malpractice insurance takes care of the actual payment. Most doctors have to carry malpractice insurance as a matter of good business policy. But when a fight erupts between a doctor and their insurer, the results can get expensive quickly.

Here is one instance. In 2004 a physician performed a liposuction procedure on a patient. Later that evening the patient suffered a heart attack and died. The patient’s estate told the doctor they would file a malpractice suit. The doctor’s insurance company agreed to a settlement and sent a check for the policy limit.

However, the doctor’s attorney also offered to submit the case to binding arbitration with no limitation on the amount of damages. That arbitration panel awarded $35.3 million to the estate. The doctor believed that the insurance company acted in bad faith in handling the original claim. The case went to court and a circuit judge sided with the insurer, but on appeal that decision was rejected. Now the doctor can pursue bad-faith arguments related to the decision to go to arbitration.

It is a complicated situation. Binding arbitration is sometimes used to prevent people from pursuing their rights in court, but it can backfire as it did in this case. Patients should always be wary of binding arbitration agreements because they can force you to take a much lower settlement than you deserve.

If you are dealing with a medical malpractice case and you live in the Syracuse, NY area, contact the law offices of Bottar Law for a consultation.

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