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An Unsatisfyingly “Fair” Settlement

Last week we settled a Federal Tort Claims Act (FTCA) case in Mississippi.  As medical malpractice cases go, it was very straightforward.  Over the course of eight years and probably 14 different radiology studies, no one figured out that a surgical sponge had been left in the patient following heart surgery.  It wasn’t that the radiologists “missed” seeing something.  They consistently reported the studies as abnormal. However, the doctors actually providing treatment to the patient didn’t look at the big picture: For years, this patient complained of chest pain and a foreign body could well explain it.  It was all there; the doctors just didn’t put the pieces together. 

After the sponge was removed, the veteran got much better very quickly.  Still, he suffered eight years of unnecessary discomfort and impairment.  To his credit, he had tried to keep going through all of this, but it was not easy.  There was no economic loss as the veteran was retired and we were in a jurisdiction with a $500,000 non-economic cap on damages, so that was the most we could get.  

The government paid $250,000 to settle the case, which was a fair resolution.  What is not fair is the fact that we had to file suit to get it.  FTCA cases are a two-step process:  First, an administrative claim is filed.  The government has a period of time to investigate and, if appropriate, resolve the claim.  Only after going through that process does one get to the second step of actually filing suit in Federal Court. If a case is settled administratively, the contingency fee is 20%.  If suit is filed, the fee goes to 25%.  The costs always rise significantly once you are in litigation.  If the gross amounts are the same, an administrative settlement will always result in a better net for the client than a resolution coming after suit is filed.  What the client nets is, of course, the most important number in this process.

Our case was one of clear liability. The government took its time investigating the administrative claim and it did make an offer. The agency was willing to pay only $40,000, a number that was just silly. But the government thought this case was “nuisance value” material.  We had no real choice but to file suit.   To his credit, the Assistant United States Attorney who defended the matter recognized there was no defense to the case and we got it resolved relatively expeditiously.  Still, there were some depositions and added expert expenses.  There was delay too, obviously.  

When we filed the claim more than two years ago, the facts were all known. Nothing new came out in the process of investigation and discovery. For anyone with even just rudimentary skills in this business, it was obvious that there was no viable defense to liability.  What this means is that the case was worth something in the range of $250,000 when it first landed on someone’s desk as an administrative claim back in early 2016.  Why was it not treated accordingly?  I have no idea.

In theory, the two-step FTCA process is fair. Valid cases should get resolved expeditiously.  It’s better for the person making the claim and, frankly, it is better for the government as it has to spend less on the case too.  As so often is the case, there is a variance between theory and reality.  As often as not, the administrative phase is simply a black hole – a built-in delay in trying to get a client a reasonable recovery for his or her injuries.  It’s frustrating for us – and far worse than frustrating for our clients.  It would be nice if the government followed the stated purpose for its own laws, but evidently that is expecting too much.


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