The More Med-Mals, the Shorter the Litigation: Evidence from Florida

Medical malpractices (med-mals) are among the most long-lasting litigations in the United States with an average duration of more than 4 years. Using the Florida database of med-mals, this study examines each physician in multiple sequential cases and documents a significantly negative correlation between the length of litigation and defendants’ numbers of past med-mals: a case closes nearly 1 year sooner if its defendant has previously experienced another claim. To explain this stylized fact, a dynamic model with the feature of “firmness of beliefs” is developed. The model assumes that the more prior litigations, the more realistic perception of the tort system and therefore a faster closure of the final dispute. I call this mechanism “learning-by-doing.” Alternative hypotheses include the following: (1) plaintiffs’ endogenous choice of filing against physicians with worse histories and (2) physicians’ reputation (career) concerns. I find no evidence in support of the first one, but the reputation concern cannot be rejected. The learning-by-doing mechanism is consistent in many robustness tests, including controlling for the reputation concerns. An earlier version of this paper was circulated under the title: Learning How to Handle Malpractice Litigation from Experience: Evidence from Florida