Pay to Play

Last year the New Jersey legislature came up with what appeared to a stopgap solution to the rising cost of medical malpractice premiums for doctors. The answer was to assess lawyers, specialty doctors, dentists, chiropractors and other businesses a $75 annual fee for a few years. The funds collected (about $26 million a year) would go into a temporary fund to help doctors pay for their medical malpractice insurance.

It’s perhaps not surprising that of all those targeted by the special fee, only the lawyers have decided to sue. The New Jersey State Bar Association has estimated that the fee will costs its members a total of about $4 million. The group has argued that the fee is unfair and inappropriate because it affects all lawyers, not just those involved in medical malpractice cases.

The NJSBA complaint alleges that the assessment denies equal protection, impinges substantive due process rights under both the federal and state Constitutions, is special legislation prohibited by the New Jersey Constitution, and amounts to using public money for a private purpose.

The lawyers may have a point in arguing that the $75 fee is too broad. It may also be too low. Perhaps lawmakers should have hiked the fee but restricted it to law firms that take on medical malpractice cases. Let the court decide.

Meanwhile in the court of public opinion, even if the fee is restricted by specialty, New Jersey may have come up with an idea that could be deserving of expansion.

For instance, why not assess a fee on lawyers for the rising cost of auto insurance, sort of an entry fee for the right to go after insurance companies? This fee, which could not be taken out of any settlements with insurers, would go into a fund to lower the cost of insurance for good drivers. Maybe auto body shops should also be assessed, with their funds going to cover the difference between original manufacturers’ parts and cheaper aftermarket parts.

How about another fee on product liability lawyers with the monies forwarded to consumer product safety groups? Homeowners should get a break, too. Real estate and personal injury lawyers could be assessed to create a fund to help pay premiums charged to owners of coastal and urban properties.

Maybe there should also be an annual mandatory contribution from attorneys who handle employment liability and workers compensation cases. The funds could help nonprofits afford their liability insurance.

Any annual fees against attorneys could be indexed to the overall rise in insurance premiums in their respective line of insurance. The more they profit from the system they love to bash, the more they would end up paying as a group.

Many in the insurance industry are quick to point to lawyers as the problem behind rising costs. As New Jersey has suggested, maybe these same attorneys can be part of the solution, too.