Quantifying the Economics of Medical Malpractice - A View from a Civil Law Perspective

Life is full of uncertainties. Legal rules should have a clear intention, motivation and purpose in order to diminish daily uncertainties. However, practice shows that their consequences are complex and hard to predict. For instance, tort law has the general objectives of deterring future negligent behavior and compensating the victims of someone else's negligence. Achieving these goals are particularly difficult in medical malpractice cases. To start with, when patients search for medical care they are typically sick in the first place. In case harm materializes during the treatment, it might be very hard to assess if it was due to substandard medical care or to the patient's poor health conditions. Moreover, the practice of medicine has a positive externality on the society, meaning that the design of legal rules is crucial: for instance, it should not result in physicians avoiding practicing their activity just because they are afraid of being sued even when they acted according to the standard level of care. The empirical literature on medical malpractice has been developing substantially in the past two decades, with the American case being the most studied one. Evidence from civil law tradition countries is more difficult to find. The aim of this thesis is to contribute to the empirical literature on medical malpractice, using two civil law countries as a case-study: Spain and Italy. The goal of this thesis is to investigate, in the first place, some of the consequences of having two separate sub-systems (administrative and civil) coexisting within the same legal system, which is common in civil law tradition countries with a public national health system (such as Spain, France and Portugal). When this holds, different procedures might apply depending on the type of hospital where the injury took place (essentially whether it is a public hospital or a private hospital). Therefore, a patient injured in a public hospital should file a claim in administrative courts while a patient suffering an identical medical accident should file a claim in civil courts. A natural question that the reader might pose is why should both administrative and civil courts decide medical malpractice cases? Moreover, can this specialization of courts influence how judges decide medical malpractice cases? In the past few years, there was a general concern with patient safety, which is currently on the agenda of several national governments. Some initiatives have been taken at the international level, with the aim of preventing harm to patients during treatment and care. A negligently injured patient might present a claim against the health care provider with the aim of being compensated for the economic loss and for pain and suffering. In several European countries, health care is mainly provided by a public national health system, which means that if a patient harmed in a public hospital succeeds in a claim against the hospital, public expenditures increase because the State takes part in the litigation process. This poses a problem in a context of increasing national health expenditures and public debt. In Italy, with the aim of increasing patient safety, some regions implemented a monitoring system on medical malpractice claims. However, if properly implemented, this reform shall also allow for a reduction in medical malpractice insurance costs. This thesis is organized as follows. Chapter 1 provides a review of the empirical literature on medical malpractice, where studies on outcomes and merit of claims, costs and defensive medicine are presented. Chapter 2 presents an empirical analysis of medical malpractice claims arriving to the Spanish Supreme Court. The focus is on reversal rates for civil and administrative decisions. Administrative decisions appealed by the plaintiff have the highest reversal rates. The results show a bias in lower administrative courts, which tend to focus on the State side. We provide a detailed explanation for these results, which can rely on the organization of administrative judges career. Chapter 3 assesses predictors of compensation in medical malpractice cases appealed to the Spanish Supreme Court and investigates the amount of damages attributed to patients. The results show horizontal equity between administrative and civil decisions (controlling for observable case characteristics) and vertical inequity (patients suffering more severe injuries tend to receive higher payouts). In order to execute these analyses, a database of medical malpractice decisions appealed to the Administrative and Civil Chambers of the Spanish Supreme Court from 2006 until 2009 (designated by the Spanish Supreme Court Medical Malpractice Dataset (SSCMMD)) has been created. A description of how the SSCMMD was built and of the Spanish legal system is presented as well. Chapter 4 includes an empirical investigation of the effect of a monitoring system for medical malpractice claims on insurance premiums. In Italy, some regions adopted this policy in different years, while others did not. The study uses data on insurance premiums from Italian public hospitals for the years 2001-2008. This is a significant difference as most of the studies use the insurance company as unit of analysis. Although insurance premiums have risen from 2001 to 2008, the increase was lower for regions adopting a monitoring system for medical claims. Possible implications of this system are also provided. Finally, Chapter 5 discusses the main findings, describes possible future research and concludes.

The Effectiveness of the Clean Development Mechanism – A law and economics analysis

Climate change has been acknowledged as a threat to humanity. Most scholars agree that to avert dangerous climate change and to transform economies into low-carbon societies, deep global emission reductions are required by the year 2050. Under the framework of the Kyoto Protocol, the Clean Development Mechanism (CDM) is the only market-based instrument that encourages industrialised countries to pursue emission reductions in developing countries. The CDM aims to pay the incremental finance necessary to operationalize emission reduction projects which are otherwise not financially viable. According to the objectives of the Kyoto Protocol, the CDM should finance projects that are additional to those which would have happened anyway, contribute to sustainable development in the countries hosting the projects, and be cost-effective. To enable the identification of such projects, an institutional framework has been established by the Kyoto Protocol which lays out responsibilities for public and private actors. This thesis examines whether the CDM has achieved these objectives in practice and can thus be considered an effective tool to reduce emissions. To complete this investigation, the book applies economic theory and analyses the CDM from two perspectives. The first perspective is the supply-dimension which answers the question of how, in practice, the CDM system identified additional, cost-effective, sustainable projects and, generated emission reductions. The main contribution of this book is the second perspective, the compliance-dimension, which answers the question of whether industrialised countries effectively used the CDM for compliance with their Kyoto targets. The application of the CDM in the European Union Emissions Trading Scheme (EU ETS) is used as a case-study. Where the analysis identifies inefficiencies within the supply or the compliance dimension, potential improvements of the legal framework are proposed and discussed.

Legal presumptions in national tax systems (Italy and Belgium) and in EU law

The thesis deals with the concept of presumptions, and in particular of legal presumptions, in the context of national tax systems (Italy and Belgium) and EU law. The purpose was to investigate the concept of legal presumption under a twofold comparative perspective. After having provided a general overview of the common core concept of presumption in the European context, an insight in the national approach to legal presumptions was given by examining two different national experiences, namely the Italian and Belgian tax systems. At this stage, the Constitutional framework and some of the most interesting and relevant at EU level presumptive measures were explored, with a view to underlining possible divergences and common grounds. The concept of (national) legal presumption was then investigated in the context of EU law, with the attempt to systematize under a uniform perspective a matter which has been traditionally dealt with either from the merely national point of view or, at EU level, through a fragmented form. In this instance, the EU law relevant framework and the most significant EUCJ case-law, in particular in the field of customs duties, VAT, on the issue of the repayment of taxes levied in breach of EU law and in the area of direct taxation, were examined so as to construe the overall EU approach to national legal presumptions. This was done with the finality of determining if and to what extent a common analytical framework may be identified, from which were extracted certain criteria governing the compatibility of national legal presumptions with EU law.

A Law and Economics Analysis of Lobbying Regulation Towards an optimal structure through the Cost Indicator Index

This research primarily represents a contribution to the lobbying regulation research arena. It introduces an index which for the first time attempts to measure the direct compliance costs of lobbying regulation. The Cost Indicator Index (CII) offers a brand new platform for qualitative and quantitative assessment of adopted lobbying laws and proposals of those laws, both in the comparative and the sui generis dimension. The CII is not just the only new tool introduced in the last decade, but it is the only tool available for comparative assessments of the costs of lobbying regulations. Beside the qualitative contribution, the research introduces an additional theoretical framework for complementary qualitative analysis of the lobbying laws. The Ninefold theory allows a more structured assessment and classification of lobbying regulations, both by indication of benefits and costs. Lastly, this research introduces the Cost-Benefit Labels (CBL). These labels might improve an ex-ante lobbying regulation impact assessment procedure, primarily in the sui generis perspective. In its final part, the research focuses on four South East European countries (Slovenia, Serbia, Montenegro and Macedonia), and for the first time brings them into the discussion and calculates their CPI and CII scores. The special focus of the application was on Serbia, whose proposal on the Law on Lobbying has been extensively analysed in qualitative and quantitative terms, taking into consideration specific political and economic circumstances of the country. Although the obtained results are of an indicative nature, the CII will probably find its place within the academic and policymaking arena, and will hopefully contribute to a better understanding of lobbying regulations worldwide.

Judges and Mass Litigation - a (Behavioural) Law and Economics Perspective

Judicial duties have for decades extended far beyond the scope of traditional adjudication, judges being progressively called upon to occupy the role of social engineers. Meanwhile, contexts in which judges evolve have transformed: mass damage nowadays tends to multiply and create new challenges not only for legal actors, but also for society at large. In spring 2011, the replies received by the European Commission to its public consultation on collective redress indicated European stakeholders’ strong interest in seeing judiciaries play prominent and leading roles in the supervision and monitoring of procedures which enable groups of claimants to seek together compensation for damage caused by mass events. Judges are thus expected to be neutral and robust agents while assuming heavy responsibilities under a considerable burden. Insights from social sciences however invite us to revisit policymakers expectations and may shed new light on current debates about mass litigation.

A Law and Economics Analysis of Trade Secrets: Optimal Scope of Law, Misappropriation and Alternative Damages Regimes

This thesis is primarily based on three core chapters, focused on the fundamental issues of trade secrets law. The goal of this thesis is to come up with policy recommendations to improve legal structure governing trade secrets. The focal points of this research are the following. What is the optimal scope of trade secrets law? How does it depend on the market characteristics such as degree of product differentiation between competing products? What factors need to be considered to balance the contradicting objectives of promoting innovation and knowledge diffusion? The second strand of this research focuses on the desirability of lost profits or unjust enrichment damage regimes in case of misappropriation of a trade secret. A comparison between these regimes is made and simple policy implications are extracted from the analysis. The last part of this research is an empirical analysis of a possible relationship between trade secrets sharing and misappropriation instances faced by firms.

Fighting corruption with pyramids: A Law and Economics approach to combating corruption in post-socialist countries

Corruption is, in the last two decades, considered as one of the biggest problems within the international community, which harms not only a particular state or society but the whole world. The discussion on corruption in law and economics approach is mainly run under the veil of Public choice theory and principal-agent model. Based on this approach the strong international initiatives taken by the UN, the OECD and the Council of Europe, provided various measures and tools in order to support and guide countries in their combat against corruption. These anti-corruption policies created a repression -prevention-transparency model for corruption combat. Applying this model, countries around the world adopted anti-corruption strategies as part of their legal rules. Nevertheless, the recent researches on the effects of this move show non impressive results. Critics argue that “one size does not fit all” because the institutional setting of countries around the world varies. Among the countries which experience problems of corruption, even though they follow the dominant anti-corruption trends, are transitional, post-socialist countries. To this group belong the countries which are emerging from centrally planned to an open market economy. The socialist past left traces on institutional setting, mentality of the individuals and their interrelation, particularly in the domain of public administration. If the idiosyncrasy of these countries is taken into account the suggestion in this thesis is that in public administration in post-socialist countries, instead of dominant anti-corruption scheme repression-prevention-transparency, corruption combat should be improved through the implementation of a new one, structure-conduct-performance. The implementation of this model is based on three regulatory pyramids: anti-corruption, disciplinary anti-corruption and criminal anti-corruption pyramid. This approach asks public administration itself to engage in corruption combat, leaving criminal justice system as the ultimate weapon, used only for the very harmful misdeeds.

Privacy Tradeoffs in Information Technology Law

The thesis aims to make the dynamics of the tradeoffs involving privacy more visible; both theoretically and in two of the central current policy debates in European data protection law, the right to be forgotten and online tracking. In doing so, it offers an explanation for data protection law from an economic perspective and provides a basis for the evaluation of further data protection measures.

Essays on the Economic Analysis of Tort Law

The analysis of tort law is one of the most influential and extensively developed applications of the economic approach in the study of law. Notwithstanding the exhaustive number of contributions on tort law and economics, several open questions remain that warrant further investigation. The general aim of this research project is to refine the traditional model of tort law in order to make it more realistic, updated with the recent technological progress and in line with the experimental results concerning prosocial behavior. This book is divided into six chapters: Chapters 1 and 6 provide an introduction and conclusions, respectively, while the remaining chapters are written in the form of separate yet related articles.

Law, Informal Institutions and Trust: an Experimental Perspective

This dissertation has studied how legal and non-legal mechanisms affect the levels of trust and trustworthiness in an economy, and whether and when subtle psychological factors are crucial for establishing trust and even for recovering trust from a breach of contract. The first Chapter has addressed the question of whether formal legal enforcement crowds out or crowds in the amount of trust in a society. We find that formal legal mechanisms, especially formal contracts backed by a powerful authority, normally undermine trust except when they are perceived as legitimate, or when there are no strong social norms of fairness (i.e. the population in a society is considerably heterogeneous), or when the environment in which repeated commercial relationships take place becomes highly uncertain. The second Chapter has examined whether the endogenous adoption of a collective punishment institution can help a society coordinate on an efficient outcome, characterized by high levels of trust and trustworthiness. The experimental results show that the endogenous introduction of collective punishment by means of a majority-voting rule does not significantly improve coordination on the efficient equilibrium. Not all subjects seem to be able to anticipate the change in behavior induced by the introduction of the mechanism, and a majority of them vote against it. The third Chapter has explored whether high-trustors adapt their behavior in response to others’ trustworthiness or untrustworthiness more quickly, which in turn supports them to maintain higher default expectations of others’ trustworthiness relative to low-trustors. Our experimental results reveal that high-trustors are better than low-trustors at predicting others’ trustworthiness because they are less susceptible to the anticipated aversive emotions aroused by the potential betrayal and thereby have a higher willingness to acquire the valuable information about their partner’s actions.

Reparation and enforcement of judgments : a comparative analysis of the European and Inter-American human rights systems

The inter-American human rights system has been conceived following the example of the European system under the European Convention on Human Rights (ECHR) before it was modified by Protocol No 11. However, two important differences exist. First, the authority of the European Court of Human Rights (ECtHR) to order reparation has been strictly limited by the principle of subsidiarity. Thus, the ECtHR's main function is to determine whether the ECHR has been violated. Beyond the declaratory effect of its judgments, according to Article 41 ECHR, it may only "afford just satisfaction to the injured party". The powers of the Inter-American Court of Human Rights (IACtHR) were conceived in a much broader fashion in Article 63 of the American Convention on Human Rights (ACHR), giving the Court the authority to order a variety of individual and general measures aimed at obtaining restitutio in integrum. The first main part of this thesis shows how both Courts have developed their reparation practice and examines the advantages and disadvantages of each approach. Secondly, the ECtHR's rather limited reparation powers have, interestingly, been combined with an elaborate implementation system that includes several of the Council of Europe's organs, principally the Committee of Ministers. In the Inter-American System, no dedicated mechanism was implemented to oversee compliance with the IACtHR's judgments. The ACHR limits itself to inviting the Court to point out in its annual reports the cases that have not been complied with and to propose measures to be adopted by the General Assembly of the Organization of American States. The General Assembly, however, hardly ever took action. The IACtHR has therefore filled this gap by developing a proper procedure to oversee compliance with its judgments. Both the European and the American solutions to ensure compliance are presented and compared in the second main part of this thesis. Finally, based on the results of both main parts, a comparative analysis of the reparation practice and the execution results in both human rights systems is being provided, aimed at developing proposals for the improvement of the functioning of either human rights protection system.

European Union Trade Policy after Enlargement: Larger Crowds, Shifting Priorities and Informal Decision-Making

The article focuses on the effects of Eastern enlargement on EU trade policy-making. On interest constellation, the article makes a case that protectionist forces have been strengthened relative to liberal forces. This slight protectionist turn is mostly witnessed in the area of anti-dumping and with respect to the Doha trade round. On preference aggregation, guided by a principal–agent framework, it is argued that the growth in the number of actors (principals and interest groups) has not constrained the role of the European Commission (agent). However, it has led to an increase in informal processes and has empowered large trading nations vis-a`-vis smaller and less ‘comitology-experienced’ member states.