A lesson in law and economics that they don't teach at the University of Chicago

-- Or --

There is more to the tension between doctors and lawyers than professional negligence cases

That case I didn't try at the end of April because my health would not permit it was supposed to come up for trial again this week.

Instead, it settled on Friday afternoon.

And now the case can provide a useful illustration of the intersection between law and economics that Judge Posner never taught.

My client was a cab driver in his mid-40's, a Muslim, born in Pakistan -- but a naturalized American citizen. He was injured when the defendant's SUV came tearing out of an alley in the Loop, clipping the right rear quarter-panel of my client's cab, rotating the cab clockwise into a concrete barricade.

It wasn't a life-threatening injury. My client was taken by City ambulance to a hospital near the Loop; his ER charges were approximately $1,150.

My client had a pre-existing condition: His left knee was arthritic before the accident. This condition did not cause him any problems before the accident; it had not even been diagnosed.

But my client had pain following the accident. Increasing pain. Pain to the point where sitting, with his knee bent as one would while driving a cab, became increasingly difficult. He sought help from a chiropractor. The knee pain did not respond to the chiropractor's ministrations -- which the chiropractor billed at a cost of about $2,300.

So my client was referred for an MRI to find out why the knee wasn't getting better. The MRI cost another $1,000. And the pre-existing degenerative arthritic condition was discovered at this time -- as were tears of the medial meniscus and the left anterior cruciate ligament. My client was sent to a surgeon.

The surgeon tried a steroid injection; it didn't relieve my client's pain. The surgeon next evaluated whether surgery might help: It didn't make sense, the surgeon said, to repair the ACL tear; my client was not an athlete and he already had degenerative joint disease. However, the surgeon believed that a left knee arthroscopy for the meniscus tear would provide my client with a measure of relief.

The bill for the surgeon's services came out to about $1,600. This did not include the cost of surgery, which my client can not afford. According to my client's surgeon, the total cost of that procedure would be somewhere between $20,000 to $30,000 -- surgeon's fee, anesthesiologist, operating room, follow-up therapy, etc.

If you've been following along, adding on your fingers, you see that the total "medical specials" -- bills actually incurred as opposed to those, like the knee surgery, which might happen -- were about $6,000. Lost time would be hard to prove with a self-employed cab driver.

From the defense perspective, there was another important fact: Our cab driver did not immediately seek out additional medical (or chiropractic) treatment following his visit to the ER. He 'gutted it out' for a period of a few months, as his pain increased. The argument would be that the accident may have been a momentary aggravation, but the real cause of the plaintiff's pain was his deteriorating arthritis... a condition he had before the accident.

And then the defendant's insurer went one better. The insurance company found its own surgeon who, after reviewing the records, decided that both tears were caused by the arthritic condition, not by any trauma from an auto accident, and, moreover, the proposed surgery was inappropriate and would not alleviate the cab driver's pain. In fact, the defense expert opined, the proposed surgery would be "ludicrous."

These opinions were reached without examining my client. Or reviewing an accident report. Indeed the defense surgeon was insistent that actually examining the patient about whom he was rendering these strong opinions was entirely unnecessary.

One final fact: The defendant had a $50,000 liability policy.

Some of the problems with this case you've already figured out for yourself: Juries may not like foreigners, even foreign-born naturalized citizens. You can ask about a prospective juror's prejudices in voir dire, but you can't guarantee that the prospective juror will be willing to share them with a room full of people... or even admit them to him or herself. But how would it color a juror's evaluation of damages? And our man would require an interpreter -- he can speak English well enough to take you where you need to go in his cab, but he would flounder if forced to try and cope with the specialized jargon of the courtroom on his own. I don't think that's an unforgivable sin -- but a juror might. And, to top it off, our man's doctors all happen to be foreign-born, too.

But these are mere quibbles in comparison to the economic realities.

You've heard of contingent fees. That means the lawyer gets paid if the client gets a recovery. That doesn't always happen.

In Chicago, the standard contingency fee is one-third of the total recovery. So, to look at our case, if the defense coughed up the entire policy, there would be $33,333.33 for the cab driver... and the chiropractor (whose bill was not yet paid)... any other unpaid bills... plus the costs of the suit.

The cost of filing the suit and getting the defendant served is a few hundred dollars -- that's not money for the lawyer, you understand, it's money for the Clerk of the Circuit Court and the Sheriff or maybe the private process server who has to be engaged. But that's just the beginning of the costs: When depositions are taken, the court reporter must be paid. The party at whose instance the deposition is taken pays for the court reporter's attendance and for the original transcript -- but the other party must pay for a copy, too, and the court reporter charges by the page. There's also a cost for obtaining the medical records.

But the really big cost is the cost of getting the doctors' testimony. If our cab driver had broken his leg in the accident, as opposed to tearing one or two ligaments, perhaps the medical testimony would not be so important. A plaintiff has the burden to prove that his or her injuries were proximately caused by the defendant's negligence. In our case we needed the doctors' testimony to show what the injury was -- the tears -- and that these injuries were traumatically caused.

Each side has to pay for its own doctors. My co-counsel was frugal; the doctors' discovery testimony cost about $2,000 -- just twice more than all the other costs put together. But, still, the amount our cab driver can recover is reduced by a further $3,000.

And the surgeon would expect to be paid for his testimony at trial, too: In Illinois, we can either bring in the doctor live or take an "evidence deposition" -- which can be read in court in lieu of the doctor's actual appearance. The surgeon wanted $1,000 an hour for his evidence deposition. He wanted $1,500 an hour to come to court.

And either way he expected payment in advance. The surgeon wanted $3,700 up front -- just as a down payment -- to agree to come to court. These amounts, whether for an evidence deposition or live testimony, would also have to come out of the client's recovery. And remember: the client's maximum recovery, if the defendant's insurer offered its entire policy, was $33,333.33.

You've already realized that the defense was not going to cough up its entire policy: In fact, since the suit was filed, until Friday afternoon, the defendant's insurer had offered exactly what the little boy shot at -- nothing. And if their doctor didn't win the day for them, the defense still hoped to hold our recovery down to the ER bill and a little something for the cab driver's trouble in the few days thereafter.

Believe it: Juries know about King Solomon and cutting the baby in half. If jurors in their collective wisdom see merit in both sides of a story, they will try and come in somewhere in between the extremes suggested by the warring parties. We would almost certainly have received a verdict in our favor in this case... but would it be for $5,000? (That would probably be somewhere around the amount that the defense would suggest to the jury.) For $10,000? $20,000? The defense would argue that the cost of future surgery was a ruse to give plaintiff a windfall: After all, he'd gone without this surgery now for some years. Why wouldn't he go on indefinitely... and just put any money the jury gave him for this procedure into his own pocket? A verdict for $50,000 was not impossible... merely unlikely, given all the facts.

The only thing I know for certain is that, once we paid our surgeon, we'd have to recover $6,000 more at trial -- at least -- to put the same amount of money in my client's pocket. And if I and my co-counsel won a verdict, the defense could take an appeal... potentially tying up the payout for another year or two.

So we settled. And I think we did the right thing. But the single biggest deciding factor was the surgeon's fee... for testimony. And, that, I submit, is a problem.

I'll take your questions now....