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Ken Margolin
Ken Margolin
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Charitable Immunity – a Failed Principle

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Most catastrophic instances of medical malpractice, are due as much to systemic failures, as to the negligence of any individual. Yet, you will never see a hospital as a defendant in a Massachusetts malpractice jury trial. The hospital – almost all in Massachusetts are non-profit corporations – will not have been named in the lawsuit, or will have been dropped before trial. Regardless of the enormity of the institution’s negligence, it is protected by Massachusetts’ charitable immunity statute. The law caps the tort liability of a non-profit corporation, at $20,000.

Massachusetts personal injury lawyers learned some years ago, the danger of leaving a charitable organization in a medical malpractice lawsuit, by learning what befell one of the state’s premiere malpractice firms, and its client. In a trial against two physicians and the hospital, the jury awarded a seven figure verdict against the hospital, and granted defendants’ verdicts to the doctors. The jury, which is not informed of the tort cap, probably felt sympathetic to both the plaintiff and the physicians, but not to the large corporation. As a result of the charitable immunity law, the verdict was automatically reduced to $20,000. No experienced Massachusetts personal injury lawyer will leave the non-profit institution as a defendant if a case proceeds to trial.

Fortunately, the charitable immunity law does not extend to individual employees. Thus, a plaintiff is not deprived of a remedy, but may be deprived of a remedy against potentially the most appropriate defendant. The law has outlived its usefulness. Many hospitals today are billion dollar entities, with CEOs earning hundreds of thousands of dollars, even millions of dollars per year. Most harmful, though, is that the charitable immunity law, defeats the role of lawsuits and the jury system in forcing needed systemic changes. It is too easy for an institution to delude itself that its procedures were adequate, if it is not directly the object of a significant plaintiff’s verdict.