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Hep C suits might not tap 'deep pockets'

New Hampshire Sunday News

June 23. 2012 8:50PM

Concord lawyer Peter McGrath speaks to the media Thursday while his unnamed client, an Exeter Hospital patient with hepatitis C, looks on. 

Exeter Hospital could face millions of dollars in damages from lawsuits filed by cardiac patients who were infected with hepatitis C while undergoing procedures there. But some experts say even if those patients win in court, the hospital may not have to pay the full bill.

Personal-injury attorneys interviewed last week point to a state law that could keep infected patients from tapping the 'deep pockets' of the hospital and its insurance carrier if a jury decides someone was more at fault than the hospital - such as an employee acting criminally.

The law, which took effect in 1990, requires courts to instruct jurors to determine the 'proportionate fault' of each of the parties responsible for a death or personal injury. If any party is found to be less than 50 percent at fault, 'he shall be liable only for the damages attributable to him,' according to RSA 507:7-e.

The state Supreme Court in 2006 interpreted that law to include even 'parties' who are not named in a particular lawsuit. In DeBenedetto v. CLD Consulting Engineers Inc., the court found that the Legislature intended 'to alleviate the burden imposed ... upon 'deep pocket' defendants targeted because of their potential financial resources rather than their degree of culpability.'

The state's public health director has said that an Exeter Hospital employee misusing syringes meant for patients is the likely cause of the hepatitis C outbreak that to date has infected 19 patients of the hospital's cardiac catheterization lab.

Mike Noonan, managing partner of Shaheen & Gordon, said the DeBenedetto ruling means Exeter Hospital could ask a judge to put its employee's name on what's known as a 'special verdict' form. 'So even though that guy's not here, didn't participate in the trial, isn't named in the case, didn't have a lawyer to defend him, didn't put in any evidence ... (the jury can) apportion blame between the hospital and the rogue employee.'

And that could mean the hospital would pay only a portion of any damages the jury awards. 'It's a far-flung, unintended consequence of the DeBenedetto case - but I bet it comes up,' said Noonan, who spoke to the newspaper before he learned that another attorney in his firm was representing one of the hepatitis C victims.

Michael Pignatelli headed the criminal justice bureau at the Attorney General's Office in the 1980s and is now in private practice. His work includes defending doctors and hospitals in medical malpractice cases.

Pignatelli said one key legal issue likely to arise is: 'Can an employer be held civilly responsible for damages that are caused by the criminal conduct of an employee?'

Pignatelli, who stressed he doesn't know the facts of what happened at Exeter Hospital, said typically an employer can be held responsible for negligent or careless acts of an employee. However, he said, 'There are legal cases out there that say ... the employer is not responsible if its employee caused damages through intentional criminal conduct.'

The hospital could raise the DeBenedetto issue and argue its employee is at fault for the outbreak, he said. But the other side will likely raise questions about procedures and safeguards the hospital had in place to prevent such contamination.

'Probably there's going to be responsibility laid on the hospital for what happened, and that's why the hospital probably is going to work hard to resolve these cases soon,' he said.

The financial implications of the Hepatitis C outbreak have been largely overshadowed by the public health aspects of the case. At least 19 people have been infected with a liver disease that can cause debilitating, chronic illness. More than 1,000 people have waited anxiously for the results of blood testing, and many will have to be tested again to make sure they weren't exposed.

Still, some have speculated that potential damages from legal actions could be financially crippling for Exeter Hospital.

Noonan said it's possible the hospital's insurance coverage would not cover all the damages that could come from lawsuits. 'If there's $100 million in verdicts and $10 million ... or $20 million in coverage, they're going to come up obviously very short, and it could close them down,' he said.

Last week, Exeter Hospital President and CEO Kevin Callahan stressed in a written statement, 'The hospital's future sustainability is not in question.'

'As an organization with more than a 100-year history, we have taken all reasonable and prudent precautions to prepare for circumstances even as difficult as this,' he said.

Mark Abramson, a Manchester lawyer who is representing seven infected patients so far, has filed motions to attach the hospital's assets to cover possible damages in those cases. He said the hospital will have to prove it has sufficient insurance to cover potential damages; if it does so, he'll withdraw the motions.

Callahan said the ongoing situation at his hospital is 'not about economics.'

'It's about focusing our efforts on the care needs of our patients now and in the future. It is about understanding what happened, how it could happen, learning from it and continuing to earn the trust of the tens of thousands of people we care for each and every year.'

Abramson said the hospital could go a long way toward restoring trust by contacting him and other attorneys who are representing patients to try to arrange a settlement. He said that's what happened in the clergy child-abuse settlement he worked out with the Diocese of Manchester on behalf of victims a decade ago.

In this case, Abramson said, what's in the best interest of the patients is also in the best interest of the hospital and community. 'Why not just try to get it resolved, take care of the people (who were) hurt and move on with the community?' he said.

Brett St. Clair, a partner in Louis Karno & Company Communications in Concord, said in a crisis, he counsels company officials to 'do the right thing.'

He likens it to the Catholic church's sacrament of reconciliation, in which someone confesses a sin, does penance and is forgiven. 'The playbook in crisis communication is centuries old,' he said.

It all goes back to the golden rule, he said: 'What would you, if you had been affected like that, want a health care organization to do?'

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