What is the straight truth about settlement offers?

In our cases involving obvious and clearcut medical malpractice, our clients often think the malpractice insurance carrier will want to settle the case in the early stage of the lawsuit, or even before the lawsuit is filed. WRONG!

Even in the gross malpractice cases, the insurance carrier will never settle early in the lawsuit and in fact, the carrier will almost always wait until the very last moment to make a settlement offer. The first settlement offer may come a day before trial, during the trial or even moments before the jury renders its verdict.

Why? The question is simple: in New York, the defendant (physician or hospital) pays no interest on a Judgment until the Judgment is rendered by the court with the exception of lawsuits based on wrongful death.  This means that the malpractice insurance carrier has every incentive to delay paying a dime until it has no other way to postpone the outcome. If, for example, the victim of the malpractice sustained injuries in February, 2008, the insurance carrier will not pay interest on a Judgment rendered against its insured physicians until the Judgment is rendered by the court, which may be years later.  If the insurance carrier can delay paying an injured victim until April, 2010, it has avoided paying the money for more than two years and postponing the payment improves its profit.

The insurance carriers want to hold onto their money until they have no other choice and a jury forces them to part with it. For this reason, malpractice insurance carriers almost never make settlement offers early in a lawsuit and seldom make an offer until the day of trial or later.  If you expect a quick settlement based on gross negligence of a physician, think again.