Malpractice Law and Psychiatry: An Overview

Medical malpractice litigation serves three important purposes: to deter unsafe practices by physicians, compensate persons injured through negligence, and exact corrective justice (1). Although not immune from medical malpractice claims, psychiatrists are much less likely to be sued for medical malpractice than physicians in other medical specialties, especially those medical specialties that are procedurally based. Additionally, in malpractice cases against psychiatrists, most plaintiffs (those making the complaint) do not prevail. According to data from the National Practitioner Data Bank (NPDB), psychiatrists account for approximately 4% of all active physicians but account for only 1% of all paid medical malpractice claims in the United States (2, 3). Each year, 2%–3% of all psychiatrists in the United States face a malpractice claim, compared with 19% of neurosurgeons and 7% of all physicians (4). Although rates of malpractice actions against psychiatrists are relatively low compared with rates for other specialists, psychiatrists are more likely than other specialists to be the recipients of disciplinary actions from state medical boards (5, 6).

This article reviews the common legal principles underlying malpractice lawsuits against psychiatrists, the lengthy litigation process and different stages of a malpractice suit, and the common allegations of negligence brought against psychiatrists. Finally, this article provides an overview of the different types of malpractice liability insurance, provides recommendations for liability prevention, and outlines the proper response of the psychiatrist/defendant to limit a plaintiff’s chance of success in a malpractice action.

Elements of a Malpractice Action: The Four “Ds”

Medical malpractice laws vary from state to state, but all are grounded in the legal concepts of tort law. A “tort” is a civil wrong for which a remedy may be obtained, usually in the form of damages (7). Medical malpractice involves a legal claim of negligence, with the additional requirements that negligence took place in the context of a doctor-patient relationship and that the doctor did not uphold a “professional” standard in the provision of care (8). In general, in any malpractice action, four elements must be proven. These elements have been commonly referred to as the “4Ds”: duty (to the patient), dereliction (i.e., negligence) of that duty, damages, and direct causation (9).

Duty

The “duty” in medical practice begins at the time a doctor–patient relationship is established. Although states vary as to how the doctor–patient relationship is defined, it is generally formed when a physician examines, diagnoses, treats, or agrees to treat the patient. Once established, the physician is obligated to continue to treat or to properly terminate the relationship (10). Once a physician–patient relationship has been established, improper termination of the relationship could constitute abandonment. Therefore, termination must be reasonable in view of a patient’s need for, and access to, further or alternative medical care (11). Finally, psychiatrists may also have a duty to patients who are harmed through the actions of their employees (e.g., psychotherapists, counselors, supervisees, or trainees) under the legal doctrine of respondeat superior (“let the superior make answer”). Under this doctrine, an employer or principal may be held liable for an employee’s or agent’s wrongful acts committed within the scope of employment (7). This concept also applies to attending physicians who supervise residents in training. In malpractice actions against residents, the attending physician is typically the party who may be held liable.

Dereliction

In establishing that a dereliction of duty exists, a plaintiff must prove that the psychiatrist’s action fell below an acceptable standard of care. Psychiatrists need not be perfect or exceptional in their treatment. They are simply held “to such reasonable care and skill as is exercised by the ordinary physician of good standing under like circumstances (12, p. 919).” Typically, to prove dereliction, the plaintiff usually provides an expert witness from the same or similar specialty who provides testimony (in a deposition and/or in court) about the appropriate standard of care for a given clinical situation. The expert witness then provides an opinion as to whether such care was rendered by the defendant psychiatrist. In cases alleging damages from egregious actions on behalf of the psychiatrist (e.g., sexual activity with a patient, assaulting a patient), expert witness testimony is not needed to establish that such actions fell below an acceptable standard of care (13), under the concept of res ipsa loquitor (i.e., “the thing speaks for itself”). In these cases, a jury can form a reasonable belief that the actions were derelict without hearing from an expert witness. However, in such cases, an expert may be used to assess damages suffered by the patient.

Damages

Even if a psychiatrist fails to provide an acceptable standard of care, a malpractice suit will not be successful unless the plaintiff can prove that he or she was damaged in some way by the psychiatrist’s acts or omissions. Damages in malpractice cases can be divided into two categories: compensatory (or actual) and punitive (14). Compensatory damages compensate the injured party for actual loss or injury, including quantifiable losses such as past and future medical bills and lost wages. Compensatory damages also cover noneconomic losses, such as pain, mental anguish, aggravation of a preexisting mental condition, and a loss of enjoyment of life. They can also include a claim for someone else who is suffering because of the physician’s negligence, such as a loss of consortium claim by a spouse. Because of tort reform efforts at the state level, recovery for noneconomic damages (i.e., pain and suffering) has been limited. Many states place caps on noneconomic damages ranging from $250,000 to $500,000 (15). As of 2019, 30 states have passed limitations on noneconomic damages (16). Punitive damages, on the other hand, are only assessed against a defendant when the defendant’s negligent conduct was egregious, reckless, malicious, or intentional. Punitive damages are usually not assessed against defendants whose negligent conduct was merely accidental. Fortunately, punitive damages are not common in psychiatric malpractice cases, except sexual misconduct, because negligent behavior is more likely accidental rather than grossly reckless or intentional. Clinicians should be aware that malpractice insurance may exclude coverage for punitive damages.

Direct Causation

Finally, a plaintiff must prove that the damages suffered were a direct result of the psychiatrist’s negligent conduct. This could prove difficult, because defendants may attribute a plaintiff’s alleged damages to a preexisting medical condition. For this reason, many courts have adopted a “relaxed causation” rule, which prevents defendants from escaping litigation merely because a patient’s preexisting condition complicates the causation issue. In these cases, a psychiatrist may be found negligent if their actions “increased the patient’s risk” of illness or injury (17).

The Litigation Process in Medical Malpractice Cases

Most civil litigation matters, including medical malpractice cases, are decided in state courts after a lengthy legal process. In one study of 10,000 malpractice claims, the mean time required to close a malpractice claim was 19.0 months: 11.6 months for nonlitigated claims and 25.1 months for litigated claims (18). Although the rules of civil procedure vary somewhat among jurisdictions, there is a common basic process. This process begins with the plaintiff filing a summons and complaint with the court (and the defendant). The complaint generally outlines, point by point, the alleged facts of the case as well as the alleged specific acts that constitute negligence and the specific damages that resulted. In some jurisdictions, the complaint must be accompanied by an affidavit from a plaintiff expert witness who has reviewed the records and determined that the care rendered by the defendant psychiatrist was likely negligent. The next step is for the defendant to file an answer, which contains a point-by-point response to all of the allegations contained in the summons and complaint. The summons and complaint require a response within a certain period, or a default judgment could be entered against the psychiatrist. Following the complaint and answer, the process of discovery begins. During the discovery process, both parties obtain facts and information about the case from each other. This is done in various ways, including, but not limited to, production of documents, interrogatories (written questions formally put to one party in a case by another party and that must be answered), and depositions of witnesses involved in the case. A deposition is a formal question-and-answer session in which one party asks a witness oral questions under oath. In discovery, depositions usually start with the parties involved and fact witnesses, followed by expert witnesses regarding the standard of care, and, finally, causation and damages experts.

Following the discovery process, the parties may negotiate a settlement. Over 90% of medical malpractice cases are settled out of court. The average court settlement for all medical malpractice cases (regardless of specialty) is about $425,000, whereas the average jury award tops $1 million (19). Therefore, there are sometimes economic advantages to settling the case and avoiding a malpractice trial. However, out-of-court settlements (as well as jury awards) are subject to mandatory reporting to the NPDB (20).

If a malpractice claim does not settle, then pretrial motions are made, a jury is selected, and a malpractice trial ensues. To find the psychiatrist negligent, the jury must find by a preponderance of the evidence (e.g., more likely than not) that the provided treatment fell below an acceptable standard of care, that there were subsequent damages, and that the negligent treatment likely caused or contributed to the damages. There are tremendous differences in malpractice awards among jurisdictions. For example, according to the NPDB, in 2016, the average malpractice damages payout for each state ranged from a low of $1.39 per capita in North Dakota to $35.49 per capita in New York (21).

Common Allegations of Negligence in Psychiatric Malpractice Claims

Data from 30 years of psychiatric malpractice claims administered by a prominent psychiatric malpractice insurer reveal that the most common cause of a malpractice claim is suicide or attempted suicide (Table 1). This is closely followed by claims for alleged incorrect treatment. Additional articles in this issue of Focus cover special issues in malpractice claims for suicide, breaches of confidentiality, failure to assess risk for violence, boundary violations, improper psychopharmacology, and failure to complete mandatory reporting of child abuse.

Malpractice Liability Insurance

Medical liability insurance is required in almost all jurisdictions and many medical systems as a requirement to practice medicine. Malpractice insurance is available through traditional insurance carriers or from a medical risk retention group, a mutual organization of medical professionals organized to provide liability insurance (sometimes sponsored by state medical societies) (22). There are two main types of medical liability insurance policies: claims-made and occurrence.

In claims-made policies, coverage is provided only for claims that both occur and are reported while the policy is in effect (9). If the incident giving rise to the claim occurred while the psychiatrist had coverage but is reported after the policy has expired, the insurer does not provide coverage. Because a considerable amount of time can elapse between when potential negligence occurred and when a claim is filed, coverage must extend for a significant period to provide adequate protection. As a result, some claims-made policies are written to provide a period of coverage referred to as a “tail” that extends coverage for a set amount of time after the policy expires; tail coverage only applies to negligent acts that occurred during the time of the original policy (9, 22). If not offered as part of the original policy, tail coverage (also referred to as extended reporting period coverage) can be purchased at the time of policy expiration. Tail coverage is essential to ensure continued malpractice coverage during transition periods when the insured has been covered with a claims-made policy but is making adjustments such as changing insurance carriers or changing jobs. Claims-made policies are renewed annually (23). If the insured plans to continue practicing and is only changing insurers, the insured could obtain “nose” coverage (also referred to as prior acts coverage) from a subsequent insurer (24).

An occurrence policy provides coverage for an incident giving rise to a claim that occurs while the policy is in effect, regardless of when the claim is reported to the insurance company and even if the claim is reported after the policy expires (9). These policies ensure coverage for the life of the patient and the insured and remain in effect even if the insured makes certain transitions such as changing jobs, retiring, and so forth. Because it is considered the broadest form of coverage, this type of policy usually does not require tail coverage. Modified occurrence policies are a combination of claims-made and occurrence policies. Coverage is provided on a claims-made basis with an included tail coverage; the tail coverage applies for a limited time after expiration of the last policy issued (24). At the end of the included tail coverage, the insured may have the option of buying an unlimited tail (24).

Provider specialty, type of policy, limits of liability, location of practice, and history of settlements are examples of factors that affect the cost of a policy (23). Malpractice policies have several elements: coverage dates, liability limits, deductibles, premiums, defining coverage, endorsements (written amendments that take precedence over the original policy), exclusions that can diminish or eliminate coverage (e.g., criminal and sexual acts), and “consent to settle” provisions (9, 23). The language of “consent to settle” provisions include the following: the insured alone decides whether a case can be settled; the insurer alone decides when a case will be settled without input from the insured; the insured is allowed to accept or reject a settlement, with the caveat that the insured would be personally responsible for amounts in excess of the previously rejected settlement amount; or the insured and insurer agree to arbitration to come to a decision if either party does not agree on settling a claim (9).

Punitive damages usually are not covered by malpractice insurance policies; however, these companies may have to cover punitive damages if their policies do not explicitly exclude punitive damages (9). If a judgment exceeds the limits of the policy, the psychiatrist is personally liable for the difference. At this point, an umbrella insurance policy (coverage beyond a primary policy), if purchased, would kick in; this policy would provide psychiatrists with an important safeguard.

Liability Prevention and Defendant Response to a Malpractice Action

Being served with a lawsuit is a stressful experience for many psychiatrists (25). The accusation that psychiatrists’ actions or omissions have brought harm to patients is hurtful but does not necessarily mean that psychiatrists have engaged in wrongdoing. If named in a lawsuit, psychiatrists should immediately call their malpractice insurance provider and speak with a claims examiner. Not contacting the insurer immediately could be grounds for voiding the policy (i.e., this could be considered a breach of contract) and may result in the insurer’s refusing to pay the judgment or challenging a default judgment. Psychiatrists should not attempt to answer the summons and complaint alone. Most policies require psychiatrists to cooperate with their insurance provider in the defense of their suits. It is imperative for psychiatrists to be honest with their attorneys and not withhold or misrepresent facts. Psychiatrists should not attempt to alter the records (including attempts to recreate missing records); in many states, altering medical records is a crime. In addition, altering medical records could serve as a basis for revocation of a medical license and for voiding the policy.

Psychiatrists should not contact the plaintiff’s attorney(s), because statements made to the plaintiff’s attorney(s) can be used against the psychiatrist in court. They also should not discuss the case with colleagues, family members, or friends, because these conversations are usually not protected by attorney–client privilege and could be discoverable. Psychiatrists should not contact a potential expert witness, because such communications may be discoverable by the plaintiff as well. Answers to interrogatories must be accurate and complete; the court can impose sanctions if information is misleading, incomplete, or withheld.

Psychiatrists should prepare for deposition testimony by reviewing the treatment records and discussing their anticipated testimony with their attorney. Transcribed deposition testimony will be scrutinized by the plaintiff’s attorney for inconsistencies and inaccuracies. Psychiatrists should assist their attorneys with formulating questions for the experts and other witnesses, if possible. Should the case go to a jury trial, the psychiatrist should attend the trial, because this is interpreted positively by the jury as meaning that the case is more important than business outside the courtroom. Psychiatrists should assist the attorney by listening for discrepancies and incorrect statements as well as suggesting questions for expert witnesses.

There are actions that psychiatrists can undertake to reduce their risk of liability. Good documentation and clear treatment records are crucial. Typewritten notes are usually better than handwritten notes, especially if the handwriting is illegible. Detailing a patient’s symptoms and mental status, explaining how diagnoses were reached and why certain treatment modalities were used, and documenting medication dosages and amounts could reduce the risk of erroneous assumptions being made by individuals reading these records. For patients with a mood disorder, suicide and/or homicide risk should usually be assessed and documented at each encounter. Ensuring appropriate follow-up for patients, especially when transferring patients to other providers or discharging them from the hospital, is crucial to reducing the risk of a bad outcome. Psychiatrists should consider discussing challenging cases with colleagues. Regular communication with other treating providers, good communication with patients, and practicing good psychiatry can provide a solid foundation to support a defense in the event of a lawsuit. Finally, psychiatrists should keep abreast of evolving standards of treatment in the profession, practice guidelines, new advances, and new research that guides appropriate treatment. This is best accomplished through participation in an active continuing medical education program.