ABC11 Investigates

Should NC limit secret court settlements?

Thursday, February 21, 2013

They're called "secret settlements" or "confidentiality agreements." People sign them when they settle lawsuits. But they can prevent consumers from ever finding out that a product manufacturer, doctor, or hospital paid to settle claims that their products or services caused serious injury or even death.

Laurie Sanders lost her son Christopher at the age of 6.

"He was extremely healthy. He'd never been to the doctor sick in his life," she recalled. "And he went into the hospital with a diagnosis of croup, but he ended up dying of oxygen deprivation."

Sanders filed a medical malpractice lawsuit against the North Carolina hospital and the doctors who worked on her son.  They wanted to settle her case and have her sign a confidentiality agreement to keep her quiet.

"I didn't know how everything would end as far as the lawsuit, but I did know that it wouldn't end in this way. And that would be Christopher's mommy taking hush money and saying, 'I won't talk about what happened to my son,'" said Sanders.

Sanders did not want to keep quiet. Her lawyers say they found out an employee at the hospital's emergency room where her son died had complained before about medical safety issues there.

"I wanted to make a difference," said Sanders. "To try to prevent people from ever experiencing preventable medical errors."

Sanders refusal to sign a confidentiality agreement is highly unusual. Legal experts say the majority of lawsuits end with the injured plaintiff signing a secret settlement for an undisclosed amount of money. That means we may never hear all the details of the case, and we may not have the information we need to keep our families safe.

"The plaintiff's right to speak, their First Amendment right, is something that they can give up," explained Duke law professor Don Beskind. "In effect, they're getting paid to give up that right."

"If you take a defective product, somebody who's been injured by a product, if all those cases are settled with confidentiality agreements, the public won't be aware that a particular product is dangerous," Beskind continued.

Legal experts point to the Firestone tire case more than a decade ago as an example. Years before Firestone decided to recall its tires, the company used confidentiality agreements when it settled lawsuits that claimed injuries and deaths caused by failing tires on ford SUVs.

Those secret settlements prevented people who claimed they were impacted by the tires from disclosing the dangers to other consumers - dangers a federal investigation linked to more than 270 deaths.

Years later, Firestone admitted to the defect in its tires.

"A defendant generally doesn't want disclosure," said Beskind. "They don't necessarily want people to know that this product is having problems and that they should be sued again for it. In the case of an individual, say, health care provider, they're concerned about their reputation."

Wilson Hayman is an attorney at a Raleigh law firm which represents hospitals and doctors. He said he believes secret settlements have a place in the legal system.

"Because most plaintiffs want to move on, and this gives them an avenue. I suppose you could say it would be a price of doing business," he said.

But is it the price of doing business at your expense and right to know?

"I think they are good to the extent they encourage settlement of claims that can be resolved without overly taxing the courts," said Hayman.

The I-Team discovered that in South Carolina, California and Florida authorities have either banned or put restrictions on secrecy orders in federal courts and other state regulatory matters.

And when Florida did away with secrecy orders in settlements, some legal scholars claim it did not overly tax the courts there.

So, the I-Team wondered: is it time for North Carolina to let sun "shine" on the dark secret of confidentiality agreements?

"I think if we can take it in a bipartisan way, looking out collectively for the public good, bring in the State Attorney General's Office, bring in the Bar Association, and jointly sit down around a table and say, 'What is workable? What is feasible? What's in the public interest?' while at the same time protecting the interest of private parties," said lawyer and state legislator Floyd McKissick Jr.

McKissick said he'll take up the cause and sponsor a new bill limiting secrecy orders. He said it's a way to protect our families from potential dangers.

"It certainly is, and I think it's a very thoughtful, reasonable way of doing so. And it's incumbent upon us to do all that we can to protect our families," he offered.

Laurie Sanders says her decision to speak out was easy. She didn't want her tragedy hidden from public view.

"To me, what was important was to be able, in Christopher's memory, to make a difference," she explained. "I wanted to speak out for those people who have no choice."

As a result of her tragedy, Sanders became the executive director for the NC Coalition for Patient Safety. She started a consulting company called Legacy in her son Christopher's honor to help others who are faced with the medical and legal consequences of medical malpractice cases.

We will be following Senator McKissick's bill once it is introduced in the legislature and report back to you on it.

In the meantime, we want to hear from you on this important issue.

Tell us what you think about confidentiality agreements. Should the legislature ban them, restrict them, or leave the law alone?  Click here to contact me on Facebook.

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