Carl Coleman

The American system of medical malpractice has long been criticized for failing to achieve either of the two primary goals of tort law: compensating victims or deterring misconduct. For victims of medical error, “[t]he malpractice liability system provides little compensation overall, and what infrequent compensation it provides it does so inefficiently with high transaction costs.” As for deterrence, researchers have found “no association between greater risk of malpractice liability and health care quality.” There has been no shortage of proposals to replace the system with potentially more effective alternatives, ranging from the use of specialized health courts to broader systems of enterprise liability to a wholesale replacement of the system with a no-fault compensation regime. In a provocative new article, Aggregating Liability for Medical Malpractice, Omer Pelled of Bar Ilan University School of Law enriches the debate by introducing a novel new approach he calls “strict liability for unreasonable harm” (SLUH), a creative mashup of negligence and strict liability that shifts the focus from discrete medical injuries to the pattern of outcomes resulting from a provider’s acts and omissions over a specified period of time.

Pellad uses the problem of hospital-acquired infections as a paradigmatic case for the application of SLUH. Some level of such infections is expected even in hospitals that engage in reasonable infection-control measures, but a higher level will occur in hospitals that fail to exercise due care. Suppose that a non-negligent hospital of a particular size and with a particular patient profile can be expected to have 100 infections per year, but one such hospital experiences 150 infections over the same time period. Under existing malpractice law, a patient seeking damages would have to show that her infection was more likely than not one of the 50 that would not have occurred had the hospital acted more reasonably. Because this is often an impossible hurdle, few injured patients even seek compensation through the tort system, and the hospital is therefore under-incentivized to invest in reasonable care. Pelled argues that the hospital’s liability should instead be established in the aggregate for all 150 affected patients, without any need to determine precisely how each of those injuries happened to arise. Each patient would be entitled to partial compensation based on the proportion of the total harm caused by the hospital’s failure to exercise reasonable care over the relevant time period, which in this example would be 50/150, or 1/3 of the total amount.

The SLUH approach is “strict” in that it results in the payment of some damages to all injured patients, regardless of whether their individual injuries were more likely than not the result of the hospital’s negligence. However, on an aggregate level, it is consistent with a negligence-based system because it requires the hospital to pay only for that portion of the harm that could have been avoided with the exercise of reasonable care. The system is loosely similar to other proportional approaches in tort law, including the loss-of-chancedoctrine and market share liability, which also dispense with traditional approaches to breach and causation as a means of ensuring that defendants do not escape liability for the increased risks they impose on the world.

An advantage of this system is that it does not depend on plaintiffs’ ability to uncover evidence of misconduct in their individual cases. As such, hospitals would no longer have an incentive to hide information about errors or to adopt costly and potentially harmful defensive tactics such as ordering unnecessary tests and procedures in an effort to minimize their litigation risk. (Physicians report that they frequently engage in such practices, although “the true costs of defensive practice, and the extent to which it is driven specifically by litigation risk rather than by broader dynamics, remain somewhat unclear.”) In addition, the approach avoids the problem of underenforcement inherent in the existing medical malpractice system; like class action lawsuits, all it would take is one patient to bring a lawsuit to call into question all the harms experienced in the hospital over the time period in question. Once the share of those harms attributable to the hospital’s lack of due care has been established, anyone who suffered harm during that period would be entitled to seek their proportionate share of compensation, even if they were not involved in the initial litigation establishing the hospital’s fault.

Initially, Pelled argues, legislators could experiment with his proposed approach by giving hospitals the opportunity to opt-into it as an alternative to standard malpractice liability. In addition, its use could be limited to hospital units that already report information about adverse events to surveillance registries, which would facilitate comparisons between the level of injuries in one unit with those of similarly situated units over time. Ideally, he argues, the system would operate alongside an insurance system that provides compensation for any injuries not attributable to the hospital’s negligence, which would combine with the partial compensation granted by the SLUH approach to make patients whole. Pelled argues that this insurance system should not only compensate patients for non-negligent harm but also provide subsidies to hospitals that manage to bring injuries below the level that would be expected if reasonable care were provided. These “negative damages” would ensure that hospitals neither under-nor over-invest in harm-prevention methods (i.e., that they take only those precautions that would be taken by reasonably prudent hospitals), even if courts sometimes make mistakes in determining the proportion of harm attributable to the hospital’s lack of reasonable care.

While Pelled develops the case for the SLUH approach in the context of medical malpractice, he argues that it could also apply to other contexts in which the goals of compensation and deterrence are not well served by the existing negligence regime. He identifies three conditions that would make the use of this approach appropriate: “(i) the total harm across cases is verifiable; (ii) it is possible to determine the reasonable harm for the injurer across time; and (iii) the injurer causes enough harm to justify a statistical inference.” As an example of such a context, he points to “artificial intelligence (AI) devices and products which, despite reducing accident rates, are involved in accidents that reasonable humans would avoid.”

The defects in our existing system of medical malpractice, while widely acknowledged, have long eluded effective solutions. Pelled’s analysis offers fresh insights into this intractable problem and is worth careful attention not only by health law scholars but by anyone with an interest in tort liability and alternative compensation regimes.