Medical Malpractice Arbitration: Time for a Model Act
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Medical Malpractice Arbitration:
Time for a Model Act
I. INTRODUCTION
In the mid-1970s the health care field suffered what was termed a
medical malpractice crisis. Increasing numbers of malpractice
verdicts against doctors, hospitals, and other health service providers
resulted in rapidly escalating malpractice insurance costs2 and a gen-
eral deterioration of the medical profession's liability insurance mar-
ketplace.3 Several insurers reduced the scope of available malprac-
tice liability coverage,4 and in some regions physicians experienced
difficulty in obtaining insurance at any price. This crisis led to a
© Copyright reserved 1981 by George H. Friedman.
1. See generally HOUSE COMM. ON INTERSTATE AND FOREIGN COMMERCE, 94TH CONG.,
1ST SESS., AN OVERVIEW OF MEDICAL MALPRACTICE 30 (Comm. Print 1975); U.S. DEPT OF
HEALTH, EDUCATION & WELFARE, PUB. No. (OS) 73-88, MEDICAL MALPRACTICE: REPORT OF
THE SECRETARY'S COMMISSION ON MEDICAL MALPRACTICE 4 (1973) [hereinafter cited as HEW
REPORT]; Altman, Malpractice Rates Drive Up Doctor Fees, N.Y. Times, July 27, 1975, § 1, at
1, col. 4; Bassis, Arbitration of Medical Malpractice Disputes-Some Problems, 676 INS.
L.J. 260 (1979); Lerner, The Medical Malpractice Crisis: Response v. Reaction, in AMERICAN
ARBITRATION ASS'N, WIDE WORLD OF ARBITRATION 140 (1978) [hereinafter cited as Medical
Malpractice Crisis].
2. See, e.g., Altman, supra note 1, at 1; Heintz, Medical Malpractice Arbitration: A Viable
Alternative, 34:4 ARB. J. 12, 13 (1979); Medical Malpractice Crisis, supra note 1, at 140. See
also SENATE SUBCOMM. ON EXECUTIVE REORGANIZATION, 91ST CONG., 1ST SESS., MEDICAL
MALPRACTICE: THE PATIENT VERSUS THE PHYSICIAN 1-6 (Comm. Print 1969) [hereinafter cited
as PATIENT VERSUS PHYSICIAN].
As early as 1969, the increase in the number of medical malpractice claims and the amounts
of settlements had been reflected in sharply increased premiums. Id. at 9. Between 1968 and
1969, premiums in Utah increased by more than 1300%. Id. Meanwhile, the Nettleship Com-
pany of Los Angeles, a large southern California carrier, had increased its premiums by an
average of 110%. Id.
3. Heintz, supra note 2, at 13. See also PATIENT VERSUS PHYSICIAN, supra note 2, at 1-6.
4. See, e.g., Medical Malpractice Crisis, supra note 1, at 140-41. One change in available
coverage was the advocacy of claims made policies instead of claims occurrence policies. Id.
Under a claims made policy, coverage will be provided only for claims actually filed during
the life of the policy. Id. With a claims occurrence policy, the insurer must cover any alleged
acts of malpractice that took place during the policy period regardless of whether the policy is
still in effect when the claim is actually brought. Id. The use of a claims made policy forces
the purchase of additional or tail coverage for any claims made after the initial policy expires.
Id. at 141.
5. See id. at 140-41. Several states faced the problem of a dearth of medical malpractice
liability insurance coverage. Id. at 140. The number of malpractice carriers in California de-
creased from ten to four during the period from 1974 to 1975. Id. By January 1, 1975, high
risk physicians in Indiana had lost coverage entirely. Id. In New York, Argonaut Insurance
Co., which had replaced Employers Insurance Company of Wausau as the sponsored under-
writer for the Medical Society of the State of New York, announced that it would cease writing
policies on July 1, 1975. Id.](ViewImageLocal?handle=hein.journals/rutlr33&div=24&collection=journals&method=preview&ext=.png&size=3)
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Medical Malpractice Arbitration: Time for a Model Act
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