RI Supreme Court upholds $1.5M med-mal verdict despite insurance coverage jury instruction

By Angela L. Carr

Upholding a $1.5 million medical malpractice verdict, the Rhode Island Supreme Court recently held that a trial court judge’s instruction to jurors admonishing them against speculating in their deliberations about a physician’s available insurance coverage did not prejudice the defendant-physician.

In Oden v. Schwartz, — A.3d — (R.I. 2013), the Court rejected the physician’s argument that the trial judge’s explicit reference to liability insurance in the jury instructions violated Rule 411 of the Rhode Island Rules of Evidence. (Rule 411 precludes evidence that a physician was or was not insured against liability.)

In support of its holding, the Court stated that “the purpose of Rule 411 is ‘to discourage inquiry into a defendant’s indemnity in a manner calculated to influence the jury.’” Distinguishing the jury instruction given by the trial justice from a party’s attempt to introduce evidence of liability insurance, the Court opined that the trial justice “simply addressed the reality that jurors often wonder about liability coverage, especially in instances where there is typically an insured risk, such as medical malpractice.”

Under the circumstances of the case, the Court held that the trial justice’s instruction was in keeping with the spirit and purpose of Rule 411. The Court further reasoned that “[t]he concept of liability insurance is a wholly familiar concept – from mandatory motor vehicle insurance coverage to the vigorous nationwide debate concerning medical insurance and medical liability[.] [I]t can hardly be said that jurors are not thinking about liability coverage in one sense or another.”

Moreover, the Court downplayed the impact of the jury instruction, emphasizing, for example, that the judge’s discussion of liability insurance comprised approximately 30 seconds of her two-hour long jury charge.

The Court did note, however, that the trial judge could have refrained from using the phrase “a physician’s insurance premiums” in her jury instruction. Nonetheless, the Court was not persuaded that the wording, in and of itself, rendered the jury incapable of reaching a fair and impartial verdict.

Tip of the iceberg?

The Supreme Court’s ruling does raise concerns among defense counsel regarding the scope of the discretion afforded to trial courts when addressing the issue of liability insurance with jurors.

It remains to be seen whether more judges will openly discuss liability insurance in their jury instructions. Given the vital role a trial judge plays in the admission or preclusion of evidence and instructing the jury on the weight of any evidence, defense counsel will need to be vigilant on this issue in order to ensure that the rights of physician clients are protected during trial.

Pre-judgment interest rate is constitutional

The Court in Oden also rejected the argument advanced by the defendant that Rhode Island’s statutorily-mandated 12 percent prejudgment interest rate in medical malpractice cases is unconstitutional because it deprives a defendant of substantive due process.

Specifically, the defendant posited that the extremely high interest rate infringes on a defendant’s fundamental right to a jury trial by putting undue pressure on a defendant to settle rather than risk losing a verdict at trial.

Applying a rational basis standard of review, the Court considered whether any reasonably conceivable state of facts could provide a rational basis for the 12 percent prejudgment interest rate in medical malpractice actions.

Ultimately, the Court ruled that even in the current environment of historically low interest rates the statutory prejudgment interest rate is rationally related to the legitimate state interest of encouraging early settlements and compensating plaintiffs for purported delays in receiving compensation.

Any reduction to Rhode Island’s prejudgment interest rate will likely have to come from the Legislature, although numerous attempts in recent years to do so have been rejected by lawmakers.

Two bills are presently in the Rhode Island General Assembly that would revise both the rate of prejudgment interest and the period during which prejudgment interest accrues. The first bill (H5284) would lower the statutory prejudgment interest rate to 6 percent. The second bill (H5289) seeks to mirror the calculation of prejudgment interest in Massachusetts by providing that prejudgment interest would begin to accrue on the filing date of the civil action.

Angela Carr is a partner at Barton Gilman LLP. She has devoted her career to the defense of clients in medical professional liability cases. Angela also advises practice groups and medical institutions on health care risk management and employment issues.