Cost Of Lawsuits Research Articles

Drivers of juror's malpractice assessments in auditor litigation involving offshoring and overtime: Generation and a management Mindset

The Center for Audit Quality (CAQ) estimated audit firms' lawsuit costs roughly equaled 15% of their 2008 annual revenues, and auditors still remain frequent targets of shareholder litigation today. However, settlements have declined following two critical Supreme Court rulings. Higher standards of liability in Janus v. First Derivatives have changed the landscape; audit firms are much more willing to litigate, sensing a greater likelihood to prevail. In this environment, the importance of juror perceptions of audit quality is critical. Simultaneously, juror perceptions of audit firm motives are equally important, as standards related to scienter remain ambiguous (Tellabs v. Makor). Our research manipulates variables directly germane to both perceptions of audit quality and scienter. Our research is also important because the accounting profession still provides no clear standards of audit quality. Without standardized measures, we expect jurors to seek easily understood information when tasked to assess audit quality and inferring scienter. We examine how jurors use their prior experiences to assess overtime and offshoring practices in rendering verdicts in instances of alleged “audit failures”. Specifically, we hypothesize (and find) more youthful jurors (who face more pressure to work more hours than did prior generations) interpret excessive overtime practices more negatively; and jurors with more managerial experience (who reflect a more high-level construal mindset focused on goals) interpret offshoring practices more favorably.

The Impact of Information Technology and Communication on Medical Malpractice Lawsuits

Health care organizations have substantially invested in Health Information Technology (HIT) as part of an effort to improve quality. However, many hospitals fail to generate positive returns on this significant investment, based on reimbursements for quality measures through the Affordable Care Act (ACA). Given the high cost of lawsuits, we investigate if HIT adoption reduces lawsuits, and their attendant costs, as another consideration in HIT payoffs. We use operational transparency theory to develop hypotheses on the individual and joint impact of HIT and communication quality in influencing patients’ likelihood to file a lawsuit. We combine data on 168 hospitals in the state of Florida from 2007 to 2011 in order to investigate these relationships. Analysis using a fractional response model indicates that HIT has a direct impact in reducing the number of lawsuits, this effect being higher for hospitals with higher communication quality scores. These results remain consistent irrespective of the type of caregiver (physician vs nurse) communicating with the patient or the severity of injury resulting in the lawsuit. Our results also remain robust under different operationalization of key independent variables and alternate model specifications. These results provide a better understanding of the mechanisms that reduce lawsuits.

Stochastic goal programming approach to determine the side effects to be labeled on pharmaceutical drugs

Pharmaceutical companies constantly face the challenge of providing high-quality products that maximize benefits while minimizing risks to patients. Recent years have witnessed an increase in drug-reaction-related lawsuits driving pharmaceutical companies to declare more side effects on the product label, which may negatively influence the product sales because patients or prescribing physicians may perceive the drug to be unsafe. Clearly, the objectives of minimizing lawsuit cost and potential customer loss are conflicting in nature, and therefore, it is necessary to determine the side effects to report on the label such that the best compromise is achieved between the two. A stochastic multiple criteria mathematical programming (SMCMP) model is developed to serve as a decision support system in assisting pharmaceutical companies with labeling decisions. A non-preemptive stochastic goal programming technique is used to solve the SMCMP model to attain a tradeoff solution between the two objectives. We verify the model with sample datasets and conduct sensitivity analysis by varying the lawsuit costs and number of customers lost. The results indicate that when the target value for lawsuit cost increases, fewer drug-related reactions are declared, while more side effects are labeled with an increase in target customer loss.

Estimated Cost to a Restaurant of a Foodborne Illness Outbreak.

Although outbreaks of restaurant-associated foodborne illness occur periodically and make the news, a restaurant may not be aware of the cost of an outbreak. We estimated this cost under varying circumstances. We developed a computational simulation model; scenarios varied outbreak size (5 to 250 people affected), pathogen (n = 15), type of dining establishment (fast food, fast casual, casual dining, and fine dining), lost revenue (ie, meals lost per illness), cost of lawsuits and legal fees, fines, and insurance premium increases. We estimated that the cost of a single foodborne illness outbreak ranged from $3968 to $1.9 million for a fast-food restaurant, $6330 to $2.1 million for a fast-casual restaurant, $8030 to $2.2 million for a casual-dining restaurant, and $8273 to $2.6 million for a fine-dining restaurant, varying from a 5-person outbreak, with no lost revenue, lawsuits, legal fees, or fines, to a 250-person outbreak, with high lost revenue (100 meals lost per illness), and a high amount of lawsuits and legal fees ($1 656 569) and fines ($100 000). This cost amounts to 10% to 5790% of a restaurant's annual marketing costs and 0.3% to 101% of annual profits and revenue. The biggest cost drivers were lawsuits and legal fees, outbreak size, and lost revenue. Pathogen type affected the cost by a maximum of $337 000, the difference between a Bacillus cereus outbreak (least costly) and a listeria outbreak (most costly). The cost of a single foodborne illness outbreak to a restaurant can be substantial and outweigh the typical costs of prevention and control measures. Our study can help decision makers determine investment and motivate research for infection-control measures in restaurant settings.

The lawyer as animal in American lawyer jokes

In the early 1980s a new joke cycle appeared in the USA, and has continued to flourish ever since. This is the lawyer joke cycle. The greatest anger and irritation in lawyer jokes is directed at the cost of lawsuits, the high income of lawyers, as well as their greed and stinginess, ignorance and skillful manipulation, corruption and dishonesty. In American lawyer jokes there is a long tradition of comparing lawyers to different animals, generally ones which are considered dangerous, poisonous or sly – all animals which have very negative connotations. It is not surprising that, among the parallels, one can find predators of different kinds, scavengers and parasites. The animals most frequently brought up in jokes as parallels to lawyers are sharks, vultures, tigers, snakes, foxes, ticks, leeches, and rats. The goal of this study is to concentrate only on a small segment of American lawyer jokes, namely, jokes in which lawyers are compared to animals.

Social inequalities in lawsuits for drugs

The aim of this study was to characterize the lawsuits requesting drugs considering the economic profile of their petitioners. All lawsuits (1378) accepted against Goiânia, GO from 2003 to 2007 were analyzed. Petitioners' demographic characteristics, reported diseases, requested drugs, origin of healthcare service, and lawsuit agent were described. Complainants' addresses were georeferenced and distributed into 4 regional groups classified in accordance with the population's average income. Dwellers of wealthier regions filed court actions requesting drugs more frequently, with an average rate of 1.7 lawsuits/1000 inhabitants versus 0.55/1000 in the poorer region. Lawsuit costs were 4-fold higher in wealthier regions compared with the poorest region. Chronic diseases were involved in most lawsuits, where acute and low complexity diseases predominated among complainants living in poorer regions. Thus, social differences were reflected in the granting of health rights.

Heterogeneous physicians, lawsuit costs, and the negligence rule

Real-world observations of negligent and defensive medicine challenge malpractice liability. Based on a principal-agent model with two types of physicians I show that lawsuit costs affect the patients’ decision to sue and the physicians’ level of care under the negligence rule, leading to a separated equilibrium in care. Given these conditions, punitive damages allow for a pooled equilibrium where all physicians exert first-best care. If courts cannot use punitive damages, a second-best solution arises with an optimal negligence standard that deviates from first-best care.

Adversarial Legalism and Civil Litigation: Prospects for Change

Rarely does a week go in the United States without a news report of a tort claim. The stories nearly always involve commentary from individuals who either decry or applaud the development. Examples abound. In the forefront this past summer were stories concerning medical malpractice. For example, the Washington Post published a story concerning the closing of the only medical trauma center in Las Vegas, Nevada, occasioned by the mass resignation of dozens of surgeons, who say the soaring cost of malpractice insurance and lawsuits threatened their livelihoods (Booth 2002, A2). The story reported that emergency rooms around the nation were closing and doctors were withdrawing from similar types of practice because of the costs of lawsuits. Casting the resigning doctors in the role of victims, John Fildes, a surgeon and the director of University Medical Center said, We want to be here, that's the sad thing. physicians want to take care of patients, but they are withdrawing from high-risk activities to protect their families and livelihoods. Not surprisingly, plaintiff's personal injury lawyers had a different view. They just wanted to terrorize the community with this walkout, said Jim Crockett, a Las Vegas lawyer. These doctors are holding this community hostage.1

Eventos adversos pós-vacinais e resposta social

A grande maioria das polêmicas públicas relativas a hipotéticos malefícios provocados pelas vacinas é extensão de controvérsias e discussões que surgem no próprio meio médico. Exemplos são os malefícios do mercúrio contido em várias vacinas, como a tríplice viral (MMR), provocando doença inflamatória intestinal e autismo; a vacina contra hepatite B e esclerose múltipla; o vírus SV40 em vacinas contra poliomielite e câncer; a transcriptase reversa em células de embrião de pinto e riscos de infecção por retrovírus; vacinas como causa de asma, diabetes insulino-dependente. Em algumas situações houve nítido prejuízo para a saúde da população, como aconteceu na Inglaterra após noticiários alarmantes sobre os riscos da vacina tríplice DTP na década de 1970 e, mais recentemente, com a vacina tríplice viral, contra sarampo, caxumba e rubéola, também na Inglaterra, e a vacina contra hepatite B, na França. Além disso, grupos ativistas contrários à vacina veiculam notícias alarmantes através dos meios de comunicação, especialmente pela Internet. Beneficiam-se dessa situação pessoas e advogados que, com ou sem fundamento científico para as suas alegações, buscam indenizações milionárias, o que tem causado malefícios para a população, principalmente em países como os Estados Unidos, pelo aumento no custo das vacinas, para fazer frente aos processos judiciais, e pela desistência de produção por várias empresas, contribuindo para crises de disponibilidade das vacinas. O Programa Nacional de Imunizações do Brasil tem tido êxito em lidar com os aspectos públicos dos eventos adversos, através da capacitação dos profissionais de saúde que atuam no setor, tanto nos aspectos técnicos como na comunicação social.

Cost-Effectiveness Analysis of the Ottawa Ankle Rules

Study objective: To conduct an incremental cost-effectiveness analysis of implementation of the Ottawa Ankle Rules in emergency departments in the United States and Canada. Design: A decision analytic approach to technology assessment. Clinical decision rules that allow physicians to be more selective in their use of radiography were compared with current practice in a decision analytic model. Setting: A university hospital adult ED. Participants: ED physicians instructed in the use of the Ottawa Ankle Rules for adult patients with ankle injury. Results: Radiography, waiting time, lost productivity, and medicolegal costs were calculated. In the United States, the savings varied between US$614,226 and US$3,145,910 per 100,000 patients, depending on the charge rate for radiography. In Ontario, Canada, the total savings were CAN$730,145 per 100,000 patients. One- and two-way sensitivity analyses that varied the rate of missed fractures, cost of radiography, probability of lawsuits, and cost of lawsuits did not change the results substantially. Conclusion: Implementation of the Ottawa Ankle Rules would result in significant savings of health care dollars despite the cost of missed fractures including litigation costs. [Anis AH, Stiell IG, Stewart DG, Laupacis A: Cost-effectiveness analysis of the Ottawa Ankle Rules. Ann Emerg Med October 1995;26:422-428.]

Contemporary Model of Civil Engineering Failures

The civil engineer's involvement in engineering failure litigation provides a basis for examining aspects of professional practice. Several case histories of civil engineering failures were discussed by a seminar group composed of civil engineering graduate students and engineering practitioners. The underlying theme of the seminar was the characterization of civil engineering failures in contemporary society, specifically the need for a more rational approach to the resolution of legal disputes. In the present (and likely future) system, most participants in an engineering project will probably be brought into the litigation process when a dispute arises. Recognition of this reality would lead the future practicing engineer to minimize the high transaction costs of lawsuits through active participation in efforts to resolve disputes, rather than defensively denying responsibility or blaming others. The civil engineering practitioner should understand the expectations of all the participants in a project ...

The Ending of IUD Sales in the United States: What Are the International Implications?

The decisions by Ortho Pharmaceutical in 1985 to suspend manufacture and sale of the Lippes Loop IUD and by G.D. Searle and Co. to suspend sales of the copper 7 and copper T 200 IUDs in the US have virtually eliminated the IUD as a potential contraceptive method for American women. The only remaining IUD on the US market is the little used Progestasert hormone-releasing IUD, which accounted for only 3% of the US market at the time of Searle's decision. The decisions were made as a direct result of the liability insurance crisis and the high cost of lawsuits in the US. The US legal system, unlike those of many countries, permits individuals who believe they have been injured by actions, inactions, or products of individuals, companies, or governmental organizations to sue. The number of such lawsuits rose by 680% in US federal courts between 1974-84, and the average damages awarded now exceed US $1 million. The phenomenon of joint responsibility, in which the plaintiff can sue all parties who can be defined as having had responsibility for the alleged injury, is particularly worrisome for industry. In practice this often means that plaintiffs concentrate their efforts on the party able to pay the greatest amount in damages. As the volume of lawsuits and damages awarded have skyrocketed, so has the cost of liability insurance. Some insurance companies simply refuse to insure high risk ventures at any price. Causes of the insurance crisis in the US are multiple, but one important factor is the new unwillingness of much of the public to accept any risks in return for benefits such as control of fertility. The Lippes loop has been the object of about 200 lawsuits and the Searle IUDs of about 800, 400 of which have been dismissed or settled out of court. Of those going to court, Searle won 9 and lost 2. Legal fees in 4 recent cases won by Searle exceeded $1.5 million. Alza Corp., manufacturer of the Progestasert, is now making the device available to all physicians requesting it, but Alza urges physicians to obtain informed consent and includes a 7-page pamphlet with each device. Each unit costs $84 compared to the $25 or so for copper IUDs, and each must be replaced annually. Many satisfied users and family planning personnel in the US are dismayed by the disappearance of an effective method from the market. Although there is no objective reason for the termination of IUD use in the US to affect the availability of IUDs in other countries, the continued distribution of IUDs elsewhere has aroused suspicion. The International Planned Parenthood Federation, Family Health International, other family planning organizations, and the US Agency for International Development have examined the records of the IUD and have reiterated their conviction that the method is safe and effective for appropriately selected users. They emphasize that the IUD has the unqualified approval of the US Food and Drug Administration.