Medical Lawsuits

An Inconvenient Reality

In an effort to stop lawsuits from forming in the first place, many medical professionals require their prospective patients sign a disclosure document “absolving” the medical professional of any medical mistake.  These documents seldom hold up in court for a number of reasons, chief amongst them is the fact that a patient cannot be expected to read and understand these documents without the legal training of an attorney. Not only is this practice ineffective, it also angers many patients and lowers their confidence in their medical professional’s abilities.

Lawsuits always have a cause and a motivation. The cause is rarely intentionally inflicted, and many times is out of control of the professional being held responsible. The motivation for a lawsuit is always going to be the assets of the person/people being sued. If those assets are controlled in such a way that they cannot be taken in a lawsuit, it eliminates the motivation for the lawsuit in the first place. Without any motivation for a lawsuit it is doubtful one will be filed.

Malpractice insurance is in place to protect the patient and take care of their needs should a medical mistake be made. Most medical professionals want their patient’s needs taken care of, yet they probably don’t have the assets needed to do it on their own. That is the true role malpractice insurance plays.

Insurance companies do not want to go to court where legal fees and time involvement become a lot more expensive than settling the case. If a medical professional’s personal assets are left unprotected, these assets will become the motivation for a lawsuit. The prosecuting attorney will name the medical professional personally in the case, where a judge is likely to pierce the corporate veil (which makes all personal assets available to the lawsuit).

IF, on the other hand, your personal assets are protected and cannot be taken in a lawsuit, a prosecuting attorney will be forced to settle with the insurance company. This will save both the insurance company and the medical professional from further damage. Protecting personal assets needs to be done correctly and according to individual state laws. Tax implications should also be taken into consideration. Asset protection entities such as LLC’s and Family Limited Partnerships can be used to protect your personal assets, but be warned that if worded incorrectly these entities will lose most, if not all of their effective benefits.

Proper lawsuit protection can be effective without the need to take assets offshore or paying tens-of-thousands of dollars in legal fees. When properly structured, medical professionals should feel more confident in seeing to a patient’s needs and worry less about protecting themselves as a part of the treatment.

Learn how to protect your business assets. Setup a free consultation with our team.

Learn how to protect your business assets. Setup a free consultation with our team.

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