Professional Liability and Risk Management: A Resource for Obstetrician– Gynecologists in Training and in Practice ©
Abandonment: Termination of a physician–patient relationship without reasonable notice and without an opportunity for the patient to acquire adequate medical care, which results in some type of damage to the patient.
Admissibility (in evidence): A characteristic of evidence that may properly be introduced in a legal proceeding. The determination as to admissibility is based on legal rules of evidence and is made by the trial judge or a screening panel.
Admissions: Statements by a party that are admissible in evidence as an exception to the hearsay rule. In a professional liability proceeding, an admission would typically be a statement of culpability by the defendant.
Affidavit: A voluntary, written statement of facts made under oath before an officer of the court or before a notary public. May be used at trial.
Affirmative Defense: An answer to a complaint that asserts a legal basis to excuse or foreclose liability (eg, expiration of statute of limitations, contributory negligence).
Allegation: A statement of a party to an action, made in a pleading, setting out what the party expects to prove.
Americans with Disabilities Act (ADA): Federal law which prohibits certain employers from discriminating against disabled persons when making decisions to hire, promote, or take other employment-related actions.
Answer: A legal document that contains a defendant’s written response to a Complaint or Declaration in a legal proceeding. The Answer typically either denies the allegations of the plaintiff or makes new allegations as to why the plaintiff should not recover.
Appeal: The process by which a decision of a lower court is brought for review to a court of higher jurisdiction, typically known as an appellate court.
Appellate Court: The court that reviews trial court decisions. Appellate courts review the trial court proceedings and determine whether there were errors of law committed by the trial court. The appellate court does not make determinations respecting disputed questions of fact.
Bailiff: An officer of the court who is in charge of courtroom decorum, directs witnesses to the witness stand, and attends to the jurors.
Battery: The unauthorized and offensive touching of a person by another. In medical professional liability cases, battery is typically contact of some type with a patient who has not consented to the contact. Battery can be either a civil or a criminal offense.
Burden of Proof: The necessity or duty of affirmatively proving a fact or facts in a dispute. The plaintiff typically has the burden of proof.
Captain-of-the-Ship: A doctrine whereby the physician in charge of a medical team is liable for the negligent acts of all the members of the team.
Case: An action or cause of action; a matter in dispute; a lawsuit.
Case Law: Legal principles derived from judicial decisions. Case law differs from statutory law, which is enacted by legislatures.
Causation (or Cause): In negligence actions, a reasonable, proximate connection between a breach of duty and an injury sustained by the plaintiff.
Cause of Action: A set of alleged facts that a plaintiff uses to seek legal redress.
Clerk of the Court: The person who is responsible for the administrative functions of the court. During a trial, the clerk administers the oaths to the witnesses, receives and marks exhibits into evidence, and requests the verdict from the jurors.
Collateral Source Rule: A rule of law that prevents a court from subtracting any payments that the plaintiff has received from such sources as workmen’s compensation, health insurance, government benefits, or sick pay benefits from the damage award.
Common Law: That body of case law that was passed down to the American colonies by the British court system and has been interpreted and refined by judicial decisions (or court decisions), as distinguished from statutory laws enacted by legislatures.
Comparative negligence: An affirmative defense that compares the negligence of the defendant with that of the plaintiff. The plaintiff may recover damages from a negligent defendant even if the plaintiff and defendant are equally at fault. It is only when the plaintiff’s negligence is greater than the defendant’s that there can be no recovery. The plaintiff’s damages are decreased, however, by the percentage that his or her own fault contributed to the overall damage.
Contributory negligence: An affirmative defense that prevents recovery against a defendant when the plaintiff’s own negligence contributed to the injury, even though the defendant’s negligence also may have contributed to the injury.
Complaint: A legal document that is the initial pleading on the part of the plaintiff in a civil lawsuit. A Complaint is sometimes known as a Declaration. The purpose of this document is to give a defendant notice of the alleged facts constituting the cause of action. The Complaint usually is attached to the Summons.
Compliance Program: A process designed to decrease or eliminate violations of federal requirements (eg, fraud and abuse, ADA, OSHA, EEOC).
Contingency Fee: A fee agreement between the plaintiff and the plaintiff’s attorney, whereby the plaintiff agrees to pay the attorney a percentage of the damages recovered.
Counterclaim: A defendant’s claim made in opposition to a claim made by the plaintiff (eg, malicious prosecution).
Court Reporter: A professionally trained stenographer who transcribes deposition or trial testimony.
Court Trial: A trial without a jury, wherein the judge determines the facts as well as the law.
Culpability: Being at fault, deserving reproach or punishment for some act or course of action. Culpability connotes wrongdoing or errors of ignorance, omission, or negligence.
Damages: The sum of money a court or jury awards as compensation for a tort. The law recognizes certain categories of damages. These categories often are imprecise and inconsistent. Variations exist among jurisdictions, and all are not strictly adhered to by the courts. The major categories are general, punitive, exemplary, and special damages.
- General damages: Typically intangible damages (eg, pain and suffering, disfigurement, interference with ordinary enjoyment of life).
- Punitive or exemplary damages: Damages awarded to the plaintiff to punish the defendant or act as a deterrent to others (eg, in cases of intentional tort or gross negligence).
- Special damages: Out-of-pocket damages (eg, medical expenses, lost wages, rehabilitation).
Declaration: See Complaint.
Deposition: A discovery procedure whereby each party may question in person the other party or anyone who may possibly be a witness. Depositions are conducted before the trial under oath and are admissible at trial under certain circumstances.
Directed Verdict: Ruling by the trial judge that, as a matter of law, the verdict must be in favor of a particular party. A verdict usually is directed because of a clear failure to meet the burden of proof, sometimes referred to as a failure to establish a prima facie case.
Discovery: Pretrial procedures to learn of evidence to minimize the element of surprise at the trial. These typically include Interrogatories and Depositions but also can include Requests for Admission of Facts and Requests for Genuineness of Documents.
Dismissal: A final disposition of an action, suit, motion, etc. To dismiss a motion is to deny it; to dismiss an appeal is to affirm the judgment of the trial court.
Due Care: The level of observation, awareness, and care owed by a physician to a patient.
Due Process: Legal procedures that have been established in systems or jurisprudence for the enforcement and protection of private rights. It often means simply a fair hearing or trial.
Duty: An obligation recognized by the law. A physician’s duty to a patient is to provide the degree of care ordinarily exercised by physicians of the same or similar specialty practicing in the same community, or, increasingly, in the same country.
Evidence: Facts presented at trial through witnesses, records, documents, and concrete objects, for the purpose of proving or defending a case. Some examples of evidence are:
- Circumstantial evidence: Facts or circumstances that indirectly imply that the principal facts at issue actually occurred.
- Demonstrative or real evidence: The use of articles or objects rather than the statement of witnesses to prove a fact in question.
- Direct evidence: Evidence that is based on personal knowledge or observation and that, if true, proves a fact without inference or presumption.
- Material evidence: Evidence having some logical connection with the consequential facts.
- Opinion evidence: Testimony of an expert witness based on special training or background, rather than on personal knowledge of the facts in issue.
- Prima facie evidence: A level of proof that is sufficient to establish a fact, and if not rebuffed, becomes conclusive of the fact.
Expert Opinion: The testimony of a person who has special training, knowledge, skill, or experience in an area relevant to resolution of the legal dispute.
Federal Court: Federal courts are another system of trial and appellate courts like state courts. However, federal courts only accept certain types of cases. Medical professional liability cases generally are not filed in the federal courts unless a patient is from one state and the health care practitioner is from another state.
Fraud: An intentional misrepresentation of the truth or concealment of fact. Examples in medicine would be to exaggerate one’s professional credentials to induce a patient to undergo tests or procedures or to misstate (upcode) diagnoses or treatment codes to maximize reimbursement.
Good Samaritan Statute: State laws enacted to encourage physicians, and others, to aid emergency victims. Statutes vary from state to state but generally grant immunity from liability for negligence when a caregiver acts gratuitously at the scene of an emergency and provides care in good faith. Because good samaritan laws are state-specific, physicians are urged to familiarize themselves with the law in effect in their jurisdiction.
Health Insurance Portability and Accountability Act of 1996 (HIPAA): Federal regulation affording some protection to individuals covered under group health insurance plans when that individual changes insurers. The object is to afford those insureds with preexisting conditions some protection against denial of coverage. Regulations concerning electronic claims transactions and privacy of patient information under HIPAA were finalized in 2001.
Hearsay: Testimony that is given by a witness who relates not what he or she knows personally, but what others have said. Hearsay generally is not admissible. There are, however, exceptions to the hearsay rule, such as an admission against interest.
Hostile Witness: A witness whose position or viewpoint is adverse to that of the attorney who called him or her to the stand.
Hung Jury: A jury that cannot come to a decision that constitutes a verdict in its jurisdiction, frequently after lengthy deliberation. A hung jury results in a mistrial, which in most circumstances means the case will be retried before a new jury.
Hypothetical Question: A question that solicits the opinion of an expert witness at a trial or deposition based on a combination of assumptions and facts already introduced in evidence.
Impeachment: To challenge the validity of; try to discredit. An attack on the credibility of a witness.
Impeachment Evidence: Evidence used to undermine a witness's credibility.
Informed Consent: A legal doctrine that requires a physician to obtain consent for treatment to be rendered or an operation to be performed; without an informed consent, the physician may be held liable for violation of the patient’s rights, regardless of whether the treatment was appropriate and rendered with due care (see Battery).
Interrogatories: A discovery procedure in which one party submits a series of written questions to the opposing party, who must answer in writing under oath within a certain period. The answers are admissible at trial under certain circumstances.
Joint and Several Liability: A legal doctrine whereby each individual defendant is independently responsible for the entire amount of damages awarded against all defendants.
Judgment: The official decision in the record of a case, which is binding on the parties unless it is overturned or modified on appeal. A judgment typically consists of a finding in favor of one or more of the parties and an assessment of damages and costs.
Jury Trial: A trial in which 12 or fewer registered voters are impaneled to hear the evidence, determine the facts, and render a verdict. In most states, the verdict must be unanimous.
Litigation: The process of a court trial to determine legal issues.
Loss of Consortium: A claim for damages by the parent, child, or spouse of an injured party for the loss of care, comfort, society, and, when applicable, interference with sexual relations.
Maloccurrence: A bad medical outcome that is totally unrelated to the quality of care provided, ie, non-negligent.
Malpractice: Professional negligence. In medical terms, it is the failure to exercise that degree of care used by reasonably careful physicians in the same or similar circumstances of like qualifications. The failure to meet this acceptable standard of care must cause the patient injury.
Motion: Written or oral court plea requesting that a court or judge make an order or ruling affecting the lawsuit.
Negligence: Legal cause of action involving the failure to exercise due care expected of a reasonable person under the same or similar circumstances.
Party: A person or legal entity involved in a legal transaction or court proceeding (eg, a party to the contract or a party to the lawsuit).
Peer Review Organization (PRO): A government agency or an independent joint contract with a private group to review medical necessity, quality of care, or cost issues for Medicare and Medicaid patients, generally in connection with observation or inpatient hospital care or both.
Periodic Payments: Damages paid to a plaintiff over a period of time instead of in a lump sum all at once. If permitted by state law, periodic payments may be ordered when the damages exceed a certain amount.
Pleadings: Written documents filed in a lawsuit, through which the issues in dispute are identified and clarified, including the plaintiff’s cause of action and the defendant’s grounds of defense. Pleadings include the complaint, answer, and motions.
Preponderance of Evidence: The greater weight of evidence, or evidence that is more credible or convincing to the mind.
Prima Facie Case: A plaintiff’s case with sufficient evidence to survive a motion for a directed verdict or a motion to dismiss by the defendant.
Privileged Communications: Confidential communication between individuals that attains a special legal status because of the nature of their relationship. Privileged communications include communications between attorney and client, husband and wife, physician and patient, and priest and penitent.
Proximate Cause: An act or omission that, unbroken by any intervening cause, produces an injury. In a medical professional liability case, failure to adhere to the standard of care must be the proximate cause of the injury to the patient.
Rebut: Refute; present opposing evidence or arguments.
Res Ipsa Loquitur: “The thing speaks for itself.” A doctrine under which it can be demonstrated that the injury was caused by means under the defendant’s exclusive control and would not have occurred in the absence of negligence. In medical professional liability cases, it allows a patient to prove his or her case without the necessity of an expert witness to testify that the defendant physician violated the standards of care. It is applicable only in those instances in which negligence is clear and obvious even to a layman, such as foreign object cases in which a surgeon leaves a sponge in the patient following surgery.
Reservation of Rights: An insurance term that refers to a carrier’s conditional commitment to undertake the defense of a matter when there is a question as to the existence of coverage for an incident.
Respondeat Superior: “Let the master answer.” The legal principle that makes an employer liable for civil wrongs committed by employees within the course and scope of their employment. In medical professional liability cases, this theory often is used to hold hospitals liable for the negligence of the staff employees and attending physicians responsible for residents.
Risk Management: Activities and strategies aimed at improving medical care while decreasing exposure to professional liability and financial loss.
Settlement: An agreement made between the parties to a lawsuit or a claim, which resolves their legal dispute.
Standard of Care: A term used in the legal definition of medical professional liability. A physician is required to adhere to the standards of practice of competent physicians, with comparable training and experience, in the same or similar circumstances.
Statute of Limitations: The period in which a plaintiff may file a lawsuit. Once this period expires, the plaintiff’s lawsuit is barred if the defendant asserts the affirmative defense of the statute of limitations.
Stipulation: An agreement made by both parties to the litigation regulating any matter related to the case, proceeding, or trial. For instance, litigants can agree to extend the period for pleadings or to admit certain facts into evidence at trial.
Structured Settlement: Settlement agreement between the parties to a lawsuit or a claim in which the damages are paid to the plaintiff over a period of time, instead of in a lump sum all at once. These settlements usually are financed through the purchase of an annuity.
Subpoena: Court order requiring a witness to appear at a certain proceeding to give testimony or produce documents or both.
Summary Judgment: Granting of a judgment in favor of either party before trial. Summary judgment is granted only when there is no factual dispute and one of the parties is entitled to judgment as a matter of law.
Summons: A legal document that is attached to the Complaint or Declaration in a lawsuit. It orders the defendant or the defendant’s attorney to file an Answer within a specified period.
Tort: A civil wrong, for which an action can be filed in court to recover damages for personal injury or property damage resulting from negligent acts or intentional misconduct. Four elements must be established to successfully litigate a tort claim: 1) a duty owed; 2) a breach of that duty; 3) an injury caused by the breach; and 4) damages.
Trier of Fact: The jury or, in the case of trial without jury, the judge.
Utilization Review or Utilization Management: A technique or program that evaluates the appropriateness, quality, and medical necessity of services provided to plan members. Can be administered by the hospital, health maintenance organizations, or insurance carriers. It can involve precertification of procedures and admissions, concurrent inpatient review, or retrospective review of patient medical records.
Verdict: The formal decision or finding made by a jury or judge. The verdict is in favor of the plaintiff or defendant, and damages usually are awarded when the verdict is in favor of the plaintiff.
Vicarious Liability: Civil liability for the actions of others. Physicians may be vicariously liable for the negligent acts of their employees committed within the scope of their employment (see Respondeat Superior). In the hospital setting, a surgeon may be vicariously liable for the negligent acts of all members of the surgical team (see Captain-of-the-Ship).
Work Product: Materials prepared by or for an attorney in anticipation of litigation. These materials are not subject to discovery.
Wrongful Birth: An action brought by parents who seek damages after the birth of an impaired child. The parents assert that they received inadequate medical care that led to the birth of a handicapped child and that if they had received proper genetic counseling or testing, the child’s birth could have been avoided.
Wrongful Conception/Wrongful Pregnancy: An action brought by parents who seek damages for a healthy, but unplanned and unwanted child born as a result of failed sterilization, birth control, or abortion.
Wrongful Life: An action brought by an impaired child who contends that if his or her parents had been correctly counseled about likely birth defects, he or she would have never been conceived or would have been aborted.
Professional Liability Insurance Definitions and Terms
Captive Insurance Company: A company owned and controlled by those it insures, as when a hospital, hospital association, medical society, or medical specialty society establishes its own medical professional liability insurance company.
Claims-made Insurance Policy: A policy that covers only those claims that happen and are submitted during the term of the policy. Insurance coverage ceases on the date the policy is terminated unless extended reporting endorsement (tail) coverage is purchased. It is desirable that a claims-made policy includes a guarantee for purchase of an extended reporting endorsement and waiver of premium for the extended reporting endorsement in the event of death, disability, or retirement (an insurance company’s definition of retirement may vary).
Commercial Insurance Company: A for-profit insurance company owned and controlled by stockholders (stock company) or policyholders (mutual company). Commercial or traditional insurance carriers are regulated by state law.
Extended Reporting Endorsement (Tail): A supplement or endorsement to a claims-made policy that provides coverage for any incident that occurred during the term of the claims-made policy but had not been brought as a claim by the time the insurer–policyholder relationship terminated. Tail coverage is purchased from a physician’s existing carrier on termination or cancellation, and typically is provided on death, disability, or retirement.
Guaranty Fund: Established by law in every state, these funds usually are maintained by a state’s insurance commission to protect policyholders in the event that a licensed insurer becomes insolvent or otherwise unable to meet its financial obligations. The funds usually are financed by assessments against all property and casualty insurers regulated by a state.
Joint Underwriting Association (JUA): A state-sponsored insurance company that has been created to make insurance available in tight market conditions. A JUA may or may not be required to provide professional liability insurance to all licensed physicians in the state, depending on state law. The solvency of the JUA typically is supported by assessments on insurance carriers licensed to do business in the state.
Liability Limits: The maximum sum or sums that an insurance company is obligated to pay for a settlement or judgment against an insured party. In medical professional liability policies, these limits generally are written with a limit per claim and a limit of aggregate liability for each year of coverage.
Occurrence Insurance Policy: An insurance policy that obligates the insurer to pay for claims which took place during the period covered by the policy, regardless of when the claim is filed. This type of policy does not require that the policyholder purchase an extended reporting endorsement (tail) on termination.
Physician-owned Insurance Company: A company typically owned and controlled by physicians, but not required to be a nonprofit corporation. It may be a captive insurance company.
Prior-acts (Nose): A supplement or endorsement to a claims-made insurance policy that may be purchased from a new carrier when a physician changes carriers and previously had a claims-made insurance policy. A prior-acts policy covers incidents that happened before the beginning of the new insurance relationship but that have yet to be reported or a claim brought forward. Prior-acts can be an alternative to an extended reporting endorsement (tail).
Reinsurance: Insurance purchased by a primary insurance carrier to reimburse it for settlements and judgments in excess of a specified limit.
Reservation of Rights: An insurance term that refers to a situation arising when there is a question as to whether there is coverage for an incident of medical professional liability.
Risk Purchasing Group (RPG): A group of people or entities with similar liability risks that are permitted under federal law to organize across state lines to buy insurance. The carrier that sells insurance to the group must be licensed in at least one state but need not be licensed in every state where a member of the group resides. The purchasing group itself does not have to be licensed in any state and thus are not subject to financial examination by state insurance departments nor are they covered by a state’s guaranty fund.
Risk Retention Group (RRG): A special insurance entity that is limited to individuals or organizations engaged in similar activities with similar or related liability exposures; members must share a common business, trade, or profession. A RRG only is required to comply with state insurance laws in its state of incorporation. Once a group is licensed in one state, it can then sell insurance nationwide without fulfilling each state’s licensure requirements. A RRG is allowed to contribute to a state’s guaranty fund.
Self-insured or Self-funded Plan: A trust fund established to pay defense costs and liability losses on behalf of participants, typically established by a hospital, hospital association, or hospital corporation.
Underwriting: The selection process by which an insurance company evaluates the risk of loss and determines which of the risks (applicants) should be accepted. On an individual basis, underwriting also would determine the amounts and limits of coverage for individual applicants.