So-called "high-low" settlement offers don't count as true settlement offers under an Illinois law allowing trial lawyers to tack on potentially millions of dollars to successful jury verdicts through so-called "prejudgment interest," an Illinois state appeals panel has ruled.
The ruling from the Illinois First District Appellate Court came May 7 as part of a ruling requiring hospital and health care organization Advocate to pay nearly $21 million to the family of a boy who was left severely disabled since birth, allegedly as a result of doctors' mistakes at the time of his birth.
"While we agree ... that a high-low agreement is a settlement agreement, it is not the kind of settlement contemplated in the prejudgment interest statute," the appellate panel wrote in its ruling.
"... A high-low agreement still requires that a case proceed to trial and a verdict be reached. The arrangement cannot reduce the cost of delay or the burden on court dockets, which the legislature sought to alleviate with the prejudgment interest statute. Thus, we conclude that the legislature did not intend for a high-low proposal to qualify as a settlement offer for purposes of the prejudgment interest statute."
The decision came as the latest and perhaps final step in a medical malpractice case that first landed in Cook County Circuit Court in 2016.
At that time, attorney Michael Rathsack filed suit on behalf of plaintiff Bonita Johnson and her son, identified as AJ.
According to court documents, AJ suffered severe neurodevelopmental disabilities during child birth at Advocate Christ Hospital and Medical Center. According to court documents, doctors' mistakes during labor and delivery allegedly resulted in him being left in an oxygen-deprived state for as much as 45 minutes. The plaintiffs asserted the hospital and doctors should be made to pay for allegedly not performing an emergency Cesarean section delivery sooner, which they say would have prevented AJ's brain damage.
According to court documents, after a three-week trial, a jury found Advocate liable for AJ's injuries, and ordered the hospital to pay about $20.88 million, including so-called prejudgment interest, or interest that under Illinois state law can begin accruing from the time a "meritorious" injury claim is filed.
Such interest is the result of a controversial law enacted in Illinois in 2021. At the time, critics derided the law as a "sop" and a "gift" to trial lawyers, longstanding, deep-pocketed allies of Illinois' Democratic Party which dominates Springfield.
The law has been challenged in several cases, but upheld as constitutional by judges. In the challenges, businesses said the law denies defendants their constitutional rights to defend themselves in court, as the threat of potentially being forced to pay millions more in "prejudgment interest" would pressure companies to settle even weak or frivolous lawsuits.
However, courts have said lawmakers acted within their constitutional authority to pressure settlements in the name of increasing efficiency in courts and preventing defendants from allegedly attempting to slow walk cases in a bid to wait out plaintiffs.
The prejudgment interest law, however, allows defendants to potentially avoid the interest threat by offering a written settlement within 12 months of the lawsuit being filed.
In the lawsuit against Advocate, the health care company reportedly offered a so-called "high-low agreement." Such a settlement is defined as an offer under which "a defendant agrees to pay a plaintiff a minimum recovery in return for the plaintiff's agreement to accept a maximum amount regardless of the outcome of the trial."
According to court documents, Advocate offered a "high-low" settlement with a range of $6 million to $20 million. Thus, no matter the outcome of the trial, Advocate agreed to pay $6 million, in exchange for the defendants agreeing to take no more than $20 million.
However, the defendants did not accept the deal, even after Advocate advised the Cook County judge of the offer.
Following the verdict, Advocate appealed. The health care company asserted Cook County Judge Janet Adams Brosnahan gave the jury faulty instructions, while also arguing the judge was wrong to allow the interest costs to be tacked on, given the defendants' rejection of the high-low settlement offer.
On appeal, the First District panel agreed Brosnahan had given faulty jury instructions. But they said they believed the error did not influence the verdict enough to matter.
And the panel agreed with Brosnahan's determination that the high-low offer did not qualify as a settlement offer under the state's prejudgment interest law.
The decision was authored by Justice LeRoy K. Martin. Justices Bertina E. Lampkin and Jesse G. Reyes concurred in the ruling.
Advocate was represented in the action by attorneys David C. Hall, Hugh C. Griffin, Sabina Babel and Molly E. Pankauska, of the firm of Hall Prangle & Schoonveld, of Chicago.