2 October 2009

US nursing home litigation

In recent years, the USA has seen a sharp increase in damages claims based on the mistreatment of nursing home residents. This is an ethical problem but also a significant cost factor adversely affecting the insurability of nursing homes. Is this a purely US phenomenon, or will it soon be an issue in Europe too?

In the USA, this development has already had consequences: various reforms are intended to ease the liability-risks of nursing home operators, ensure greater transparency in the nursing home industry, and thereby reduce the costs associated with their liability insurance. As nursing homes are also growing in importance in Europe, this trend could be repeated here.

Why are suits against nursing home operators in the USA a problem?

In the industrialised nations, more and more people are getting older and older. At the same time, the cohesion of the traditional extended family is disintegrating. The number of old people being looked after in homes instead of by their families is therefore steadily increasing.

And there is one more trend contributing to the growing importance of nursing home litigation: consumer rights in the USA have been steadily extended in past decades. As a result, the protection of nursing home residents has improved markedly. The legal basis for this was the (Federal) Nursing Home Reform Act of 1987, as well as numerous laws in the individual states. This regulation not only prescribes certain minimum standards for nursing homes, together with more stringent checks that these standards are being complied with, but also often makes it easier to bring claims, for example by extending the right of action to persons not directly affected, such as the children or spouses of nursing home residents.

These two developments have led to a dramatic increase in the number of suits against the operators of nursing homes in the USA since the mid- 1990s. And the chances of success of such lawsuits are good. Moreover, the average amounts of damages awarded are higher than those, for example, in medical malpractice litigation. In 2003, for instance, the average amount of damages awarded was approximately US$ 400,000. In addition, punitive damages (known as exemplary damages in the UK) are awarded considerably more often in suits against nursing homes than they are in medical malpractice cases.

What are these lawsuits all about?

Suits against nursing homes mostly involve personal injury, for which there can be many different causes: inadequate care, wrong medication, improper sedation, insufficient supervision or deliberate violence by staff against nursing home residents. The result of such irregularities can be very serious damage to health – and even the death of the person in care. The incidence of bedsores, dehydration and falls is particularly high, while inadequate nursing care may also aggravate existing medical conditions.

Nursing home residents can hardly ever claim for loss of earnings as a result of the injuries suffered. Similarly, the event giving rise to the injury will rarely lead to a substantial increase in the amount of nursing care required. Suits brought by nursing home residents and their families therefore primarily involve claims for damages for pain and suffering. On average, damages for pain and suffering account for around 80% of the total compensation awarded – in contrast to medical malpractice cases, where they account for only 35%. One of the reasons for this is that in the USA it is often a jury that decides the amount of damages. Juries often sympathise with the plaintiffs and therefore want to make the high damages awards, despite the fact that there is generally no economic loss involved.

In the case of suits against nursing homes, three aspects give rise to specific legal problems:

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  Firstly, because the perception of nursing home residents is regularly impaired by mental or physical ailments, both sides can have difficulty in furnishing proof.
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  Secondly, it is often unclear who besides or instead of the person directly affected is authorised to bring an action (children, spouse, government agencies, non-governmental lobbyists).
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  Finally, it is doubtful whether nursing home residents and their families can, initially or even exclusively, effectively be restricted to mechanisms for out-of-court dispute resolution.

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