January 2005
There are now over 5,000 bare doctors in Florida. Thousands more are considering going bare. In our capacity as investment advisors for physicians, we work with many clients who have been self-insured since 1986. Back then, many of the asset protection techniques in use were unproven; now, they have significant real life utility. We have developed a unique strategy that has effectively helped many of our clients settle malpractice cases.
Traditional defense strategy
The huge $80,000 to $125,000 average cost of defending a mal-practice case has been an obstacle to many physicians going bare. Many defense attorneys are trained to defend claims and win cases, no matter what the cost. Of course, bare doctors care greatly about the cost of counsel.
What is the motivation of the plaintiff attorney?
As most doctors are aware, malpractice suits are not really about bad doctors or bad medicine. They involve medical mal-occurrences that offer the opportunity of financial recovery. It is logical that attorneys will not pursue cases that they feel would not result in a monetary reward.
A new strategy
Over the years, we felt there might be a better way than defending cases for years while putting the doctor through enormous financial and emotional aggravation.The evolution involved under-standing what plaintiff attorneys feared most in a lawsuit. Bankruptcy.They knew that they seldom received a dime once a defendant went bankrupt. This strategy involves retaining a bankruptcy attorney for our client as the first line of defense, rather than a defense attorney. Usually, a threat to declare bankruptcy is made, but not actually carried out. The conversation that then ensues is quite simple. The doctor's lawyer calls the plaintiff's lawyer to inform them that, even if they get a judgment years down the road, there will be no assets available and they will likely collect zero. Then they ask, "Would you like to settle?" The key to this strategy is that bankruptcy attorneys will not bluff. If you are not pro-actively and completely asset-protected, they will not stretch the truth. Having a solid functioning financial plan is foremost!
A number of doctors settled potential $1 million lawsuits for under $40,000.
Case History
Recently, one of our clients was sued on a failure to diagnose claim. The plaintiff was asking for $1 million. The average judgment nationally for this type of case is $600,000. The physician had a $1 million net worth that was fully protected. By utilizing this strategy, about 4 months into the lawsuit, a bankruptcy attorney reached a settlement for $24,900. Total legal fees to this point were under $4,000. This was significantly less than the estimated $80,000 defense costs for the case. Also, the emotional cost savings of resolving a case in months rather than years is not to be downplayed. An important footnote is that this settlement amount did not need to be reported to the National Practitioner Data Bank since it was paid directly by the physician, and not a corporation or insurance company.
Our experience has demonstrated that very favorable results can be obtained by combining innovative investment management strategies with asset protection plans such as the above strategy.
Upcoming Seminar
WHY GOING BARE IS WORKING FOR DOCTORS
Case Histories of Bare Doctors
Sponsored by BCMA
Call for dates and Locations
Singer Xenos is an established wealth management firm specializing in physicians with $500,000-plus in investments. We manage over $500 million in assets such as retirement plans, annuities and personal accounts, with an emphasis on wealth building and protection from malpractice claims. Both Worth Magazine and Medical Economics named Singer Xenos one of the Top Financial Advisors nationally for physicians. Physician Asset Advisor and Singer Xenos do not provide legal advice.
Coral gables / Ft Lauderdale / Tampa / orlando 888.289.0060
