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In: Operations Management

Risk Management and Insurance It is a beautiful spring day. Garret has decided to take his...

Risk Management and Insurance

It is a beautiful spring day. Garret has decided to take his vintage 1962 Corvair convertible out for a ride. He is traveling down the highway at the legally posted speed when the Corvair does what Corvairs are known for the front end lifts and Garret loses control and crosses the center line into oncoming traffic. Eric who is driving at the legally posted speed in the opposite direction sees the Corvair headed straight at him and swerves into the ditch to avoid a head-on collision. Eric’s passenger, Louise, who is wearing her seat belt sustains a minor injury to her leg. An ambulance is called.

Carly, the ambulance driver, and her crew have just ended their shift. It has been a busy day and they did not have time for lunch. On the way back to the shop they stop for a burger and a beer. Carly has consumed about half of her small glass of beer when she receives a frantic call from the dispatcher asking her to respond to the call for the injury to Louise. Carly has the only available ambulance in a 30 mile radius. After protesting to the dispatcher that her shift is over and she has consumed some alcohol she reluctantly agrees to respond to the call.

Carly arrives at the scene of the accident and Louise is placed in the ambulance. The paramedic onboard the ambulance expresses concern to Carly that although Louise’s injury appears minor the patient appears to be in a lot of distress and needs to get to the hospital quickly. The paramedic has observed Louise’s medic alert tag indicating a variety of allergies to medications and is careful to not administer any of those medications. Carly, in her desire to get to the hospital quickly, takes a shortcut and drives the wrong way down a one way street. The ambulance is involved in a fender bender causing only minor property damage but creating a 20 minute delay.

The ambulance finally reaches the hospital and is met by Dr. Brooke. Dr. Brooke fails to notice the medic alert tag and administers medication to Louise that causes a violent allergic reaction. As a result of the allergic reaction, Louise loses her leg. Louise’s career as a professional volleyball player is over as is her multi-million dollar contract.

Louise has hired the personal injury law firm of Screwem, Goode and Hart to handle her case. You are a young associate with firm and have been asked to prepare a memo discussing the potential liability of the various parties for the loss of Louise’s leg. Assume that the state where this incident occurred has a statute limiting liability for medical malpractice so Dr. Brooke and the hospital are not particularly attractive defendants. From a financial perspective Garret is an attractive defendant because he has very high insurance limits ($10,000,000). Using negligence law concepts identify the potential defendants and discuss the theories of recovery. Also discuss potential defenses.

Solutions

Expert Solution

Well in this case, Garret is completely responsible for Louise's injury and he is the first attractive and prospective defendant. Since the state has statute limiting liability for medical malpractice, and with such limitation it may take time to sue over the defendant Dr.Brooke. Hence, this is also not an attractive option for Louise, yet there is a chance if Louise tries to file medical malpractice lawsuit against the hospital before the statutory deadline. Next in line is Carly, who drove an ambulance after consuming alcohol. Although Carly drove on wrong road and went to the hospital 20 minutes late, this did not affect Louise much. So, potential and attractive defendents in this case are - Garret, and the hospital.

Now, considering the financials, Garret has a very high insurance limit for his Corvair. As far as hospital is concerned, it can be sued for the medical negligence over one of their doctors who failed to recognise the medical alert tag on the patient, which lead to loss of Louise's leg. Therefore, Hospital and Garret are directly responsible for the Louise's loss of career and million dollar contract.

So, Louise can throw charges against Garret, who holds high insurance and the hospital whose would generally earn in millions. So, potential defendants in this case are the attractive defendants - Garret who could be sued for the accident and can be demanded huge for the accident and the hospital where Louise can demand lifelong free medical service.


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