N.J. Lawyers Sue to Scrap Med-Mal Insurance Fee

January 30, 2005

The New Jersey Legislature could have seen this coming. It enacted a law requiring the state’s lawyers, and many doctors, to pay $75 a year for three years to help doctors in high-risk specialties pay for malpractice insurance.

Now the lawyers have sued, charging it is unfair and improper.

“What the bill seems to be inferring is they are blaming lawyers for medical malpractice problems and lawyers aren’t the problem. This bill is not helping doctors or the public,” said Edwin J. McCreedy, president of the New Jersey State Bar Association, which sued on behalf of its members.

Proponents, however, maintain that lawyers should bear some of the burden, contending their malpractice lawsuits have contributed to rising insurance premiums.

McCreedy dismissed fears of runaway jury awards in malpractice cases, which are often touted as a root of spiraling insurance premiums, arguing that verdicts are decreasing.

“There really is no crisis in the first place, so there is no rational basis for the bill,” said McCreedy, who is personally handling the lawsuit, which was filed this month in state Superior Court for Union County.

He called the assessment “grossly unfair to the average attorney in New Jersey who never sees, has nothing to do with, a medical malpractice case. They’re being asked to contribute money to a fund for another profession, which is just ridiculous, for lack of a better word.”

McCreedy, who paid his $75 under protest, estimated the law applies to about 35,000 lawyers who practice in New Jersey. Malpractice cases are litigated by a small number of specialists, and account for less than 2 percent of all lawsuits, decreasing from 1,900 in 2003 to 1,600 in 2004, he said.

The Legislature should have asked insurance companies why medical malpractice premiums are rising, McCreedy said. “Had they done that, I think they would have found it was because of bad investments,” he said. “Nobody forced the insurance companies to open their books before they passed this bill.”

His cure: harsher discipline against doctors who are repeatedly negligent.

Although doctors, dentists, chiropractors and others are also being billed $75 a year, only the lawyers have sued. But the medical community is not thrilled with the law, either, questioning whether it will provide a long-lasting relief.

The law was a compromise measure was signed by then-Gov. James E. McGreevey in June following a two-year tussle between doctors and lawyers on whether limits should be placed on malpractice awards. In the end, no caps were placed on settlements.

The fund is to collect $26.1 million a year. As of Jan. 20, $19.2 million was collected.

A prime sponsor of the law, Assemblyman Loretta Weinberg, said
her motivation was to ensure that rising premiums were not pushing
doctors, particularly high-risk specialties like
obstetrician/gynecologists, out of the state.

“There are certain health care professions that we can’t live without,” Weinberg said.

She said she was “a little bit surprised” the lawyers sued. “One of the things I thought the legal profession was interested in was protecting the rights of people to sue, and this bill does that,” Weinberg said.

For $225 — $75 for three years — they get full recourse to the courts, she said: “I think that was a good trade-off.”

The Legislature is convinced that premiums were soaring, she said, but conceded, “What we couldn’t prove is that that’s tied directly to medical malpractice cases.” She added, “We think the insurance companies are playing a role in this, too.”

The lawyers’ lawsuit charges that the assessment violates the U.S. and state constitutional protections of equal protection and due process by treating them differently with and “arbitrary and capricious” law.

The suit also claims the Legislature has overstepped its authority by setting rules on how lawyers can pursue malpractice claims, which the bar association maintains is the province of the New Jersey Supreme Court.

Those rules give judges more leeway to control monetary awards and encourages mediation by imposing new restrictions on filing lawsuits.

Named as defendants are the commissioners of three state departments, Treasury, Banking and Insurance, and Health and Senior Services.

The lawsuit is being defended by Assistant Attorney General Patrick DeAlmeida, who said he will try to have it transferred to state Tax Court.

Once there, he said the law will be found valid because there is a logical nexus between reality and the Legislature’s decision to include lawyers among the pool of professionals being assessed to help solve the malpractice insurance problem.

“Insurance rates have risen in large part because of large damage award in medical malpractice litigation. The number of lawsuits filed, some of which are meritorious, some of which are not, are factored into the medical malpractice rates,” DeAlmeida said.

A precedent for such an assessment came in the 1990s, when lawyers had to pay $100 a year for three years to help finance the bailout of a state-backed auto insurance system, he said.

The Legislature’s justification for billing lawyers? It determined that personal injury cases brought by lawyers contributed to high insurance rates. Lawyers lost their challenge to that, he added.

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Latest Comments

  • February 24, 2005 at 7:18 am
    Ellen says:
    I couldn't agree more with what you are saying Bill. As a healthcare consultant (and attorney by training) here is what I can tell you: 1. Med mal attorneys make a lot more mo... read more
  • February 20, 2005 at 6:03 am
    EQUIPOSE says:
    Of all professions reputed to be created by Satan himself, I think it's great that it's now so fashionable to see the insurance industry as the whimpering fuzzy puppy in the c... read more
  • February 19, 2005 at 3:21 am
    LR says:
    I cannot believe lawyers are complaining about $75: Look at what the doctors have to contend with: 1. 3% Fee on surgi-center revenue before expenses 2. Almost 50% increase in ... read more
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