The Ohio State Medical Association’s Frivolous Lawsuit Committee defended 3 frivolous medical negligence suits against members and funded counterclaims by the defendant doctors against the plaintiff’s solicitors for bringing hopeless claims. The doctors succeeded.
The settlement of litigation may, as a general rule, be in the best financial interests of insurers. But settlement of cases which should not have been brought is corrosive of public confidence in the litigation system, infuriating for some insureds (not all, since many professionals want nothing more than to avoid the glare of court), and in my opinion bad for insurers in general.
I favour spending money on cases at the outset, lodging a beautifully pleaded, kick-arse defence, making early offers, and identifying by a proper letter of advice what the legal issues in the case are, and making educated guesses about whether the other side will prove its case. Paying lawyers to go through the interlocutory motions and then settle at a nice long mediation late in the proceedings is to give them very easy money. Then, when the mediation fails, preparation of the case begins, and inevitably something comes out and everything changes direction.