Litigation

The Trial Lawyer Tax Break?

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The American Medical Association and 90 other medical groups have just come out against a proposed tax code change that would allow trial lawyers to deduct certain litigation expenses, a change that might encourage those lawyers to file additional lawsuits. As Fox News reports:

The coalition of medical groups sent [Treasury Secretary Tim] Geithner a letter Wednesday, stating its case, including a recent report by the AMA that found 95 medical liability claims were filed for every 100 physicians and that 65 percent of the claims are dropped or dismissed. Average defense costs range up to more than $100,000 and take physicians away from patient care.

"Any increase in the number of lawsuits filed will add unnecessary costs to our health care system," [former AMA president J. James] Rohack said. "Many physicians are forced to practice defensive medicine to protect themselves from meritless lawsuits. The U.S. government estimates the cost of defensive medicine to be between $70-126 billion per year."

Read the whole thing here. Elsewhere in Reason: Ronald Bailey says don't cry for the ambulance chasers.

NEXT: And That's the Problem, Lt. Healy

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  1. Those doctors are just selfish. Don’t they see that people who chase ambulances and sue doctors are way more important than people who actually cure sick people and save lives?

    1. John Edwards is a hero. A HERO!

      1. He my daddy!

  2. Seriously, there should actually be a 90% tax on the lawyer’s cut of any medical liability settlement with “pain and suffering” damages.

    1. Perhaps things might different if iatrogenic death was not the 3rd or 4th leading cause of death.

      1. From the CDC

        Number of deaths for leading causes of death

        Heart disease: 616,067
        Cancer: 562,875
        Stroke (cerebrovascular diseases): 135,952
        Chronic lower respiratory diseases: 127,924
        Accidents (unintentional injuries): 123,706
        Alzheimer’s disease: 74,632
        Diabetes: 71,382
        Influenza and Pneumonia: 52,717
        Nephritis, nephrotic syndrome, and nephrosis: 46,448
        Septicemia: 34,828

        But don’t let silly things like facts get in the way of your argument.

        1. Funny how you failed to neglect to include such things as:

          (1) ourcivilization.com/medicine/usamed

          (2)naturodoc.com/library/doctors/_cause_death

      2. It’s not. The IOM studies are bullshit, to be blunt about it. And you’re even exaggerating those by equating “contributing” with “causing.”

        1. Prove it.

          1. A complete breakdown of the 1999 IOM report most of this is based on is beyond the scope of this message board, and has already been accomplished by others. I would refer you to the following if you have any real interest in the subject.

            Brennan TA. The Institute of Medicine report on medical errors: Could it do harm? N Engl J Med 2000; 342: 1123-1125.

            McDonald CJ, Weiner M, Hui SL. Deaths due to medical errors are exaggerated in Institute of Medicine report. J Am Med Assoc 2000; 284: 93-95.

            And yes, you are confusing “contributing” with “causing,” or at least, your sources are. Quality studies in this area are very limited.

            1. Have you read Death by Medicine?

              1. Death by Medicine is even worse with its declaration that iatrogenic injury is the number one cause of death in the United States, which doesn’t even pass the whiff test. It’s a meta-analysis that suffers from the same problems of poor primary data. A lot of these studies suffer from redundancy in their references with very little in the way of good primary sources. When you boil it down, they’re all based on a few small studies from one to two hospitals which have been essentially multiplied by the population of the country to get a national estimate. As you might imagine, this is not good statistical practice in itself and makes a meta-analysis useless. After all, what good is doing a meta-analysis of forty studies, if those studies are all based on the same three studies?

      3. I’m not usually one to complain about four dollar words, but really? Iatrogenic?

        What would the death rate be without medical care? How do you tell the difference between the doc screwing up and the doc not really being able to do anything?

        My question is what percentage of those 65% of claims are settled. Cause that would indicate they really have merit and argue against reform. It’s clever to try to use a high settlement rate as proof there’s not much real malpractice.

        1. That would indicate nothing about merit. A great part of it would indicate merely the extent of “go-away” insurance settlement money being paid. That is, in a system where a lawyer can with impunity file a meritless malpractice suit for say, $100K; get a quick settlement for say, $25K from an insurance company that could easily spend more defending; take the average contingency fee of 35% – and walk with nine large. Do that five or six times a year and any ambitious University of La Verne law grad can make a tidy little income.

        2. What that would indicate is that the defense lawyer, the doctor, and (potentially) the hospital viewed settling as a better cost / benefit than going to court. Given the expense of litigation, the fickleness of juries, the potentially catastrophic result an upheld claim could do to a doctor’s reputation, saying that a settlement automatically indicates a claim has merit is dubious.

          BTW, as I’ve stated here previously, I was once prescribed acetaminophen with liver enzymes about 6x normal. I’m well aware that doctors can fuck up in lethal ways.

  3. I think I found a way to cut health care costs…

  4. a proposed tax code change that would allow trial lawyers to deduct certain litigation expenses

    Is this part of some crafty plan to get the trial lawyers under the guidance and protection of SEIU?

  5. The coalition of medical groups sent [Treasury Secretary Tim] Geithner a letter Wednesday

  6. I hope that letter began “Dear Stupid.”

  7. I’m all for crafting special rules for lawyers, but something more Shakespearean.

  8. Number of deaths for leading causes of death

    Heart disease: 616,067
    Cancer: 562,875
    Stroke (cerebrovascular diseases): 135,952
    Chronic lower respiratory diseases: 127,924
    Accidents (unintentional injuries): 123,706
    Alzheimer’s disease: 74,632
    Diabetes: 71,382
    Influenza and Pneumonia: 52,717
    Nephritis, nephrotic syndrome, and nephrosis: 46,448
    Septicemia: 34,828

    How many of these deaths could be stripped out and re-bundled under the category Old Age?

    1. We’re not allowed to use old age as a cause of death anymore because that would imply that the older you get the closer to death you are.

  9. “It happens sometimes. People just explode . . . natural causes. “

  10. At what point does it become cheaper for doctors (in terms of both money and personal risk) to organize a little club that takes money from all the doctors in an area, and then helps them out by resolving their differences with particularly troublesome lawyers in a permanent and highly prejudicial fashion?

  11. I like how a bunch of libertarians are coming down on the side a bunch of people (doctors) who increase their incomes through the intervention of the state (licensing) against a type of law that is expressly common law (i.e. came into being without the state) except where the state has moved to limit it.

  12. I like how a bunch of libertarians are coming down on the side a bunch of people (doctors) who increase their incomes through the intervention of the state (licensing) against a type of law that is expressly common law (i.e. came into being without the state) except where the state has moved to limit it.

    1. Like J sub D linking to a statist organization like the CDC.

      As I posted above, there is ample evidence to support the proposition that iatrogenic death is among the leading causes of death.

    2. Filing frivolous lawsuits is a right under common law?

      1. Yes, then you lose or it gets thrown out of court. Also, the purpose of a trial is to find out what happened, thus just because something gets dropped or dismissed doesn’t mean that it was “frivolous.”

        1. Yes, then you lose or it gets thrown out of court.

          Except that the defendant has to pay a lawyer, whereas the plaintiff’s lawyer is working for a portion of the winnings. The plaintiff has nothing to lose, whereas the defendant always loses something.

          1. Do you think attorneys working on contingency fees are into charity? If they don’t think that a case has any merit, they won’t go forward with it.

            1. Of course they’re not working on charity. Their fees and court costs eat up half of victim compensation. And they go forward with merit-less cases all the time. Some 85% of malpractice cases are thrown out, which is to say, they are without real merit. After all, the marginal cost for a lawyer to file suit is low, since they’re already paying the fixed costs to keep their staff, office, etc.

    3. I like how a bunch of libertarians are coming down on the side a bunch of people (doctors) who increase their incomes through the intervention of the state (licensing)

      The practice of law is conditional upon admission to the bar. In this lawyers vs. doctors debate, this cancels…

      1. Lawyers aren’t the only ones losing out. The change would mean that they are turning away plaintiffs who may have valid cases. Especially ones with valid but complicated cases that would be expensive and time consuming to represent.

  13. Given how wealthy many trial lawyers are, I would expect Tony to be opposed to this tax break for them.

    Right, Tony?

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