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Effective date of tort reform a headache for lawyers and plaintiffs

By Mark McGrath


On July 25, the General Assembly voted to override Gov. Beverly Perdue’s veto of Senate Bill 33, a tort reform measure that places draconian limitations on the ability of medical malpractice victims to seek redress in court. The bill reads like a Christmas wish list for malpractice insurers, the state Chamber and the medical lobby: noneconomic damages capped at $500,000, virtual immunity for providers who perform vaguely defined “emergency” treatment, heightened requirements for expert witnesses and abbreviated periods of limitation.

And if the substantive provisions of the legislation didn’t provide the trial lawyers of this state with enough heartburn, the General Assembly added for good measure a provision that makes the effective date for most of the provisions (October 1, 2011) apply not to all actions arising after the effective date, as is typically the case with new legislation, but all suits filed after the effective date.

As a result, the legislature has placed malpractice lawyers in an unenviable position: what is to be done with the cases currently under review and in the inventory pipeline?

Take a representative case we currently have under review. An elderly nursing home resident dies of sepsis after a Stage IV pressure ulcer goes untreated for weeks. The treatment at issue took place in December 2010, and the death occurred in February 2011.  The client comes to us with the case in July 2011.  In the pre-tort reform world, we would have had until February 2013 in which to file a wrongful death suit; put another way, if we spent lavish amounts of time working up the case, we would have had almost two years from when the case came into the office in which to have the case reviewed by experts and filed. Not now.

In providing that the bill applies to all actions filed after October 1 of this year, the General Assembly has essentially abbreviated the statute of limitations in our potential case to three months.  Why?  We now need to file by the effective date or bear the burden of the limitation on noneconomic damages.

Can a busy litigation firm expect to take in a complex nursing home case in July and have it filed within three months?  Perhaps, but that would require monomaniacal devotion to that case and a relentless pursuit of expert witnesses, especially when one considers the fact that the legislation also requires that counsel obtain and provide to his or her experts all records relating to the alleged negligence, a frustrating exercise which itself can consume many months.  But what is to be done when the firm has 15 or 50 or 100 medical negligence cases under review?

The looming deadline places malpractice lawyers in an ethical dilemma.  What duty is owed to clients to apprise them of the legislation and its potential impact?

As was recently confirmed to us by the State Bar, the situation is governed by Rule 1.4 of the Rules of Professional Conduct.  This Rule provides that an attorney shall consult with his or her client regarding all matters impacting the client’s case and obtain informed consent from the client as to the course of action to be taken by the attorney.  The requisite consultation includes a duty to communicate the options that are available to the client to obtain an informed agreement from the client to a recommended course of action.

In our view, in light of the veto override on Senate Bill 33, an attorney who has malpractice cases under review has a duty to inform her clients of the following:

• The North Carolina legislature has enacted legislation that, among other things, caps noneconomic damages in malpractice cases at $500,000.

• The statute applies to all cases filed after October 1, 2011.

• Your case is affected, because the noneconomic damages that would otherwise be available to you if the case were filed before October 1, 2011 exceed $500,000.

• It is unlikely that we will be able to have your case reviewed and ready for filing by October 1, 2011.

• As a consequence, we anticipate that your case will be filed after the effective date and will, therefore, be subject to, among other things, the cap on noneconomic damages.

• Filing before the deadline will result in avoidance of the cap on noneconomic damages.

• Filing before the deadline has significant drawbacks.  It will be extremely difficult to obtain medical records, get them to an expert witness and have them reviewed prior to the effective date.  Any suit filed before October 1would be a hastily engineered affair as opposed to a meticulously prepared lawsuit that is worked up and filed in the ordinary course of business.

We plan to address these issues in letters to each of our malpractice clients.  The letter will include a signature line in which the client acknowledges the content of the letter, agrees to have our firm continue the representation, and confirms an understanding that while our firm will exert our best efforts to file suit before the October 1 effective date, having the case reviewed, fully worked up and ready to be filed by the deadline is a remote possibility at best.

The General Assembly has placed trial lawyers in an unenviable position.  It is crucial that lawyers with medical malpractice cases under review inform their clients of the legislation and the impending effective date.  Those who fail to obtain informed consent from their clients run the risk of being sued for legal malpractice and could be subject to disciplinary action by the State Bar.

Practical Litigator

McGrath is a partner with the firm of McGrath Podgorny in Research Triangle Park, where he focuses his practice on representing plaintiffs in catastrophic injury cases, including cases arising from nursing home neglect and abuse, electrical injuries, inadequate security, medical malpractice and third-party workplace injuries.

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