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New Jersey doctors who blame their high insurance premiums on plaintiff-friendly jurisprudence will love the state supreme court’s latest interpretation of medical-malpractice law. A unanimous court ruled June 18 that fraud is not a cause of action against doctors who lie about their credentials, a decision that prevents punitive damage awards against doctors who botch operations. The court said there is enough scope for recovery in the three traditional causes of action against doctors: deviation from standard of care, lack of informed consent and battery. Justice Jaynee LaVecchia’s opinion in Howard v. University of Medicine and Dentistry of New Jersey, A-100, instructs trial courts how to fold evidence of doctor misrepresentation into claims of lack of informed consent. The decision is a victory for the Medical Society of New Jersey, particularly because it reverses an Appellate Division ruling that had created a fraud cause of action. Had the Appellate Division decision stood, doctors would have been exposed to claims that are not covered by their insurance policies, exposing their personal assets to compensatory and punitive damages, says the society’s counsel, Joel Silverstein, a partner in Roseland, N.J.’s Stern Greenberg & Kilcullen. That, in turn, would have forced doctors to settle questionable claims, he says. The disappointed plaintiffs’ lawyer, Bruce Nagel of Livingston, N.J.’s Nagel Rice Dreifuss & Mazie, says last week’s decision is not fair. “You can win damages for fraud from a salesman who lied about the capabilities of a refrigerator or a car,” he says. “But you can’t sue a doctor for fraud when you hire him because he lies about his credentials and you become a quadriplegic.” Nagel’s client, car crash victim Joseph Howard, sued UMDNJ and several staff physicians, including Dr. Robert Heary, a neurosurgeon who performed a delicate spinal operation called a corpectomy. The operation was unsuccessful, and Howard is now a quadriplegic. According to the fraud complaint filed in Essex County, N.J., Howard and his wife consented to the surgery only because Heary told them he was a board-certified neurosurgeon who had performed about 60 corpectomies a year for 11 years. Heary, who was board-eligible but not certified at the time and had performed “a couple of dozen” corpectomies, testified he never made the inflated claims the Howards said he made. The trial judge threw out the fraud claim, saying the plaintiff would have scope for recovery in a malpractice case. But the appeals court agreed to an interlocutory review and reversed, saying the plaintiff did not have to prove negligent performance of the surgery to recover damages. Just as plaintiffs can win damages for battery in cases where a doctor other than the one selected by the patient performs an operation that ends badly, they can try to prove the deceit caused the damages, the appeals court said. In reversing, the New Jersey Supreme Court said claims like Howard’s could be resolved as informed-consent cases. In effect, a patient who decides to have an operation because a doctor lied about credentials has not given informed consent and needs not resort to a fraud cause of action. But the court didn’t stop there in its pro-defense ruling. It said that a misrepresentation does not give rise to an informed-consent-type claim unless the plaintiff can show that a reasonable person would have forgone the treatment knowing the truth about the doctor. In Howard’s case, for example, “plaintiff must prove that the additional undisclosed risk posed by defendant’s true level of qualifications and experience increased plaintiff’s risk of paralysis from the corpectomy procedure,” the court said. Under the procedure established by the court, a judge armed with expert testimony would decide whether the doctor’s true credentials substantially increased the plaintiff’s risk from undergoing the operation. Nagel says the procedure creates too difficult a hurdle because it focuses on the doctor’s credentials, not on what the plaintiffs would have done if they had known the truth. He says, for example, that if a doctor claimed to have performed 2,000 operations but really had done only one, a judge could determine that the one operation made the doctor sufficiently capable. The testimony alleging lies would never get to a jury. Silverstein and Matthew Schorr, one of the partners at Springfield, N.J.’s McDonough, Korn & Eichhorn who represented the defense, say that making judges the gatekeepers of such determinations will prevent unfair testimony from going to juries. In a fraud case, with both sides offering conflicting stories of what the doctor said, it would be up to the jury to decide who was telling the truth. Under the procedure outlined by the New Jersey Supreme Court, it’s the actual credentials that matter, not what the doctor might have said. Schorr says academic studies presented to the court by the defense show that a large percent of patients have faulty recollections of what doctors told them about credentials. Howard would prevent such recollections from getting to a jury, he says.

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