New damage laws will impact your wallet

New damage laws will impact your wallet

Changes to calculating damages because of pet deaths will change your insurance premiums soon
Aug 01, 2011
By staff

When I get together with friends who work in other healthcare professions, the conversation often turns to malpractice insurance coverage. I amaze everybody else in the discussion with how reasonably priced mine is. The cost for good coverage is fair and not a major expense like it often is for physicians, dentists, podiatrists and others. But that may soon change.

No money for sadness, no money for pets

There are two primary reasons why veterinarians don't pay the high premiums borne by human healthcare professionals. First, courts in most U.S. jurisdictions don't permit recovery of money damages for the pain and suffering of animals when they've been harmed by the negligence of a veterinarian. Second, these same jurisdictions don't provide pet owners with noneconomic damages resulting from veterinary negligence. This means courts don't award money for a pet owner's sadness, depression, loss of companionship and so on.

There's another factor that helps keep malpractice rates low. While insurers can count on modest awards after a verdict against a veterinarian for malpractice, they can also expect few malpractice claims to go to trial. The reason is, personal injury attorneys are compensated on a percentage of the damages recovered—a contingency basis. While a 25 percent or 33 percent chunk of a human personal injury award is a big incentive for an attorney to battle through a human medical case, it can be pretty tough to get one to pursue a veterinary case with a relatively small potential verdict or insurance settlement.

But there's a new twist is on the horizon. A number of state legislatures are considering two new categories of damages that could be sought through the courts in veterinary malpractice lawsuits. These are referred to in the law as "noneconomic damages for wrongful injury to or death of companion animals." I call it "The Personal Injury Lawyer's Full Employment Act of 2011."

Pets aren't beasts of burden

The thinking of the legislators who support this new legal theory goes something like this: For 1,000 years of jurisprudence, animals were considered private property, and injury or destruction of animals was considered a tort against property. In a lawsuit against a person or company for the impairment or loss of an animal, financial recovery was limited to replacement value or some similar valuation of property lost. If a motorist negligently runs into a sheep in Scotland, his insurance pays market value—maybe auction value—for the sheep.

Pretty much the same rule continues to exist for large animals in the United States. If a gas pipe explodes and kills a race horse or half a dozen dairy cows, the insurance companies resolve the amount of the payment needed to make the animal owner financially whole with a few quick phone calls. And for the time being, even companion animal malpractice cases revolve around the issue of liability, not the determination of damages. Damages are most often found to be the value of the pet or the cost of correcting an improperly handled medical procedure.

Enter the new damages paradigm. State lawmakers are now looking with a critical eye at the common law classification of companion animals as property.

Because pets are becoming more like family members and less like beasts of burden, the theory goes, perhaps the law should consider injury to them differently than it has in the past. Further, if a pet is the victim of medical malpractice, wouldn't it make sense to use the same system in the calculation of damage awards as would be used for a human family member? A growing number of people think so, especially many tort lawyers.

Now, I'm not saying that the personal injury bar is the only mover and shaker in the effort to support this new view of how to establish awards in companion animal malpractice cases. But use your imagination as we look through the eyes of two ambitious lawyers in imaginary adjoining states.