Tort Law: The Detriments of Arbitration

Simon D. Murray, MD: Do you think our system could be better if we had arbitration? The way this is set up now, a case is brought and there’s an extensive period of discovery, right?

Glenn Bergenfield: Right.

Simon D. Murray, MD: It’s expensive, it’s time-consuming, and it drags everything out. And then, if you go to court there’s a chance the jury doesn’t know anything about the case, they may so ill-informed that they can’t make a good decision. You would disagree maybe.

Glenn Bergenfield: No, I told you my story of how the jury made that decision.

Simon D. Murray, MD: But wouldn’t it be easier if we had arbitration where cases went before a panel of a lawyer, a doctor and a judge, and it was binding? Or maybe it was not binding. Maybe it could be not binding. That’s how the case would be adjudicated. It could be done quickly. It could be done more efficiently. It could be done without a lot of expense. And then if the client didn’t like it, they could opt for a trial. Maybe in this scenario if they opted for a trial and lost, they might have to pay for the legal costs. That’s how I would see it.

Glenn Bergenfield: OK, you done?

Simon D. Murray, MD: Yes.

Glenn Bergenfield: I think that the arbitration of tort cases is the devil’s work. It’s the worst thing. It’s happening, not so much in medical malpractice cases, but it’s happening across the nation now. There’s the 1925 Federal Arbitration Act that’s been interpreted by the Supreme Court to say, “If you put an arbitration clause in anything in a contract, it’s enforceable, and nobody gets a jury trial.” And it’s under the Supremacy Clause of the United States Constitution; it’s something that means that state tort law is completely subverted.

And that’s where we’re headed. and we may be headed there with doctors. I’m familiar, and I have a case in the Appellate Division right now where lawyers in their retainer agreement put an arbitration clause. It says, if I do anything wrong, I’ll try to work it out with you, but if I can’t, we’re going go to arbitration. You waive your jury trial rights. And by the way, the arbitrator is the place I always do these arbitrations in. It’s people who I know and you don’t. And I’ve got that case in the Appellate Division. I say that’s a breach of the lawyer’s duty to the client when they first meet them to say, “Sign the retainer agreement, pay me the $5,000. Oh, and by the way, if I commit malpractice a year from now, you’ve agreed to waive your jury trial rights.”

It’s a monstrous thing for a lawyer to do on meeting a client, to be thinking about that and protecting him or herself from the client, from their mistake that they haven’t even made yet. I think the same for doctors. And I think regarding arbitration results, they’re faster but they’re not good. There’s a lot of data on this, and the results favor institutions. They’ll favor doctors if the lawyers get away with this, if the Supreme Court in New Jersey doesn’t say no to this. It’s going to favor lawyers.

Simon D. Murray, MD: That has been studied?

Glenn Bergenfield: It’s been studied a lot because it’s in lieu of tort reform. We may as well just get rid of the tort system, that’s basically what arbitration is going to do. And for plaintiffs and for people who are injured, it’s a monstrous change.

Simon D. Murray, MD: Well it bypasses the whole courtroom system.

Glenn Bergenfield: It does. And then let’s suppose that, like in the case I was talking about with lawyers, all of the cases go to arbitration. All the cases of a lawyer doing something wrong go to arbitration. How would we know what the standard of care is for lawyers?

Simon D. Murray, MD: Well there would be a lawyer on the arbitration panel.

Glenn Bergenfield: Right. But these are private arbitrations. There would be no published decision. There wouldn’t be the Supreme Court of New Jersey saying, “When lawyers do this, it’s a conflict; when lawyers do that, it’s malpractice.” There wouldn’t be that. There would be private arbitration. You won, you lost, here’s $500. Whatever it was, it would have no precedential value. So lawyers wouldn’t be able to know what the standard of care is, and the Supreme Court of New Jersey would no longer know what the standard of care is because they’d have no cases coming. That’s how the law develops, the law of medical malpractice as well. If the cases are sent into this private system, where the doctors are in charge of the medical malpractice arbitration system, because if you could do that, no offense, you’d pick an arbitrator who had a pretty good feeling about doctors. And the lawyers are doing the same thing. And if they can do that and get away with it, that will be the end of the system. And the New Jersey Supreme Court won’t be in charge of lawyers. Private arbitrators will be in charge of lawyers, and that’ll be the end of control of lawyers. And under our constitution the New Jersey Supreme Court is in charge of lawyers. And you have bodies and the tort system that you have to answer to right now, and that might change with arbitration.

Simon D. Murray, MD: Couldn’t the Supreme Court appoint these arbitration panels though based on people who are law experts, professors in medicine or law, and all that?

Glenn Bergenfield: Right. We have a really different view of how it is that we’re supposed to establish the standard of care for a lawyer. We have trials, we have discovery, we argue about it, we put it in front of the jury, a verdict is reached, it goes to a higher court, an appellate court or a supreme court, and then the standards are set through this rigorous process. Let’s say it’s very inefficient. But that’s the process by which we get standards of care for lawyers, and it’s the same for doctors. And if you just say, “Let’s just go to private arbitration,” first of all, it’s a corrupt system, the arbitration system, in my opinion.

And secondly, it’s private and you’re not going to have any precedential value, you’re not going to have anything to learn from, even if the Supreme Court appoints the arbitrator, which they’re not going to. They don’t want to outsource their responsibility over lawyers. But if they did, you still have the same problems.

Simon D. Murray, MD: It sort of would be like workmen’s compensation perhaps, right, which is arbitrated.

Glenn Bergenfield: Workmen’s comp, is it arbitrated?

Simon D. Murray, MD: Well there’s some sort of....

Glenn Bergenfield: You mean they have a workers’ comp court.

Simon D. Murray, MD: If you lose a finger, you get so much. If you lose....

Glenn Bergenfield: Right, there’s standards of how much money you get.

Simon D. Murray, MD: Yet, 58% of the money that’s paid in malpractice cases goes to administrative costs, not to injured parties, and that’s highly inefficient.

Glenn Bergenfield: It is inefficient, there’s no question about it. And a lot of it goes to lawyers defending doctors. And then the plaintiff’s lawyers at the end.

Simon D. Murray, MD: And the contingencies that lawyers got.

Glenn Bergenfield: Yes, definitely.

Transcript edited for clarity.