Most settlements, especially those involving doctors and hospitals, involve confidentiality provisions. They are almost always a condition of settlement and the defense will refuse to settle a case without one.
The California Supreme Court on July 11, 2019 held in Monster Energy Company v. Schechter (Case no. S251392) held that such confidentiality provisions in settlements are valid and not only prohibit parties from discussing the terms of settlements, but their attorneys as well. The underlying case was a wrongful death case that resulted in a confidential settlement involving an energy drink company. The energy drink company sued the opposing attorney when that attorney boasted about the settlement on his website even though he did not disclose the settlement amount. The California Supreme Court held that the trial court appropriately denied the attorney’s motion to dismiss under California anti-SLAPP statute.
These confidentiality provisions create a real conundrum in the medical malpractice context. Unfortunately, it is not uncommon to see the same hospitals make the same mistakes or have the same systematic failures over and over and over again. It seems like these hospitals are unable (or do not care to) learn from their mistakes. These mistakes often have fatal consequences, such as failing to inform a patient that a laboratory or radiology report confirms a cancer diagnosis.
Many of these hospitals are part of huge multi-million dollar corporations. A corporation or company can own and/or manage dozens (and sometimes hundreds) of hospitals. Due to the 44-year old California MICRA cap of $250,000 that has not risen a cent for inflation since 1975, there is simply no incentive for these hospitals to spend extra money on training nurses and staff, implement quality control changes, or risk an uncapped employment-based lawsuit in terminating the privileges of bad doctors. In short, it would cost these corporate hospitals far more to implement the necessary patient safety changes than to simply pay out on lawsuits unfairly capped by California law.
The only possible counter to this is public being made aware of these systematic and deadly failings. However, confidential settlements protect these hospitals and allow the wrongful conduct to repeat itself unchecked. As attorneys, however, our ethical obligation is usually to our single client and not a hypothetical, potential future victim. As such, we are often forced into these confidential settlements, keeping the hospital and/or doctor’s wrongful conduct hidden and (unfortunately) prone to be repeated.