Does evidence show the EP met the standard of care, yet the patient suffered a devastating outcome? The defense team might put a high-low agreement on the table.
“This is an intermediate strategy between full settlement and trial,” says Laura Pimentel, MD, a clinical professor in the department of emergency medicine at University of Maryland School of Medicine.
High-low agreements are used to bracket the range of financial outcomes in malpractice cases with high-dollar damages. “These structured settlements should definitely be reserved for situations where the defendant EP is reasonably at risk for a verdict beyond her policy limits,” Pimentel notes.
Some malpractice lawsuits carry high potential for damages because the plaintiff is very sympathetic. Yet, the EP defense team and the insurance company still believe the case is defensible and want to proceed to trial. With a high-low agreement, “both the plaintiff and defendant receive protection from an excessive verdict,” Pimentel explains.
Both sides agree that the settlement will not be lower than a minimum figure even if there is a defense verdict. This is the low side of the agreement. All parties also agree that there will not be payment higher than a maximum figure in the case of a plaintiff verdict, regardless of the amount awarded by the jury. This is the high side of the agreement.
“High-low agreements offer some attraction to both parties because of the notorious unpredictability of jury verdicts,” Pimentel says.
Agreements may be made after a trial has begun but before the jury delivers the verdict. This can protect the defense if they believe the trial is not going particularly well. On the plaintiff’s side, the high-low agreement means they will receive something, regardless of the outcome. “[The agreement] indemnifies [plaintiffs] against a pure defense verdict from which they would walk away with nothing,” Pimentel says.
Another advantage: The finality of the litigation is ensured. “High-low agreements preclude the inevitable appeals that follow exorbitant verdicts,” Pimentel says. This allows all parties to move on without incurring additional costs or uncertainty.
High-low agreements usually make sense for ED claims in these scenarios:
• Cases in which patients sustained devastating injuries, such as neurological damage, and require life care plans. “A pediatric patient who presented to the ED in diabetic ketoacidosis was appropriately resuscitated and treated but developed cerebral edema is [an example of] such a case,” Pimentel says.
• Cases in which the bad outcome with a sympathetic plaintiff may persuade a jury that a high-dollar plaintiff verdict is appropriate even though the ED care was timely and appropriate. The main downside here is that a high-low agreement guarantees payout to the plaintiff. “This will trigger a report to the National Practitioner Data Bank,” Pimentel cautions.
• Litigation in venues where juries have been known to return disproportionately high damages awards. Cook County, IL, and Bronx County, NY, are two examples. In these venues, “high-low agreements are often in place before a jury returns with a verdict,” says Anna Berent, JD, claims counsel for Houston-based Western Litigation.
The challenge for both sides is to precisely compromise on the range between the low and high figures. The defense must determine what it is willing to pay despite a favorable verdict.
“The only time such an agreement backfires is if the high number [exceeds] what the jury awards the plaintiff,” Berent explains.
The plaintiff in a recent lawsuit alleged that the ED team failed to diagnose and treat an arterial occlusion in the patient’s leg, resulting in an amputation. The plaintiff demanded $1.8 million, and the defense offered $500,000. At the close of trial, before jury deliberations, the defense team entered into a high-low agreement with plaintiff’s counsel.
“This was out of concern that the jury was not leaning in our favor,” Berent recalls. Both sides agreed to a low amount of $750,000 and a high amount of $1.5 million. The jury returned a verdict for more than $5 million, which would have been reduced to $2.1 million given state damage caps. “But we paid $1.5 million pursuant to the agreement,” Berent adds.
Another case alleged that the EP failed to evaluate a patient and failed to pass along key information to the on-call cardiologist. The plaintiff was in his 70s but was still working part-time, had a wife, and helped babysit his grandchildren. The plaintiff demanded $1.5 million from the EP. The defense proposed entering into a high-low agreement with a low of $100,000 and a high of $1 million. The plaintiff counsel rejected the offer, stating that $100,000 would not even cover his fees and costs. Ultimately, the plaintiff received nothing from the EP defendant. “The jury returned a defense verdict in favor of our ED doc but penalized the co-defendant cardiologist to the tune of $250,000,” Berent reports.