Medical Malpractice: An Empirical Examination of the Litigation Process

New data on tredical malpractice clai against a sinle hospital where a direct itasure of the quality of medical care is available are used to address 1) the specific question of the role of the negligence rule in the dispite settlement prss in medical malpractice, ard 2) the general question of h the process of negotiation ard disp.2teresolution in medical malpractice cçerates with regard to both the behavior of the parties ard the cutcxne of the process.We find that the quality of malical care is an extremely inportant determinant of deferdants' niical malpractice liability.re generally, we find that the data are censistent with a nel where 1) the plaintiff is not well infond ex ante ab.it the likelinood of negligence ard 2) the ex ante expected value to the plaintiff of a suit is high relative to the cests of filing a suit and getting mere information.Thus, suits are filed even where there is no cencrete reason to believe there has been negligence, and.virtually all suits are either drcçped or settled based on the information gained after filing.We cenclixie that the filing of suits that arpear, ex post, to be nuisance suits can be rational eguilibrium behavior, ex ante, where there is inoxplete information aJ.it care quality.