BUSI 561 Week 6 DB Forum 2: Replies Example

Discussion Board Forum 2: Replies

BUSI 561 Legal Issues in Business, Discussion Board Forum 2: Replies

Thread by [Student Name]

The two classmates and their threads are composites; the cases, the research and the Scripture cited are real, and the requirements follow Liberty's public course guide for BUSI 561.

Reply to Megan

Megan, your thread argued that punitive damages should be capped at a fixed dollar amount because a single runaway verdict can bankrupt a small business, and your example of a restaurant facing a seven-figure punitive award was sobering. I agree that unpredictability is the real problem, but the research suggests a cap may not be the best answer.

Polinsky and Shavell (1998) offered an economic account of when punitive damages make sense. If a wrongdoer will be held liable for only some of the harms it causes, because victims do not sue or cannot prove their case, compensatory damages alone will under-deter. Total damages should then equal the harm divided by the probability of being held liable: if a company is caught only a quarter of the time, damages should be four times the harm. On this view, punitive damages are justified mainly when wrongdoing is likely to escape detection, not simply because conduct is outrageous.

The evidence on actual verdicts is also less alarming than headlines suggest. Eisenberg et al. (1997) studied jury trials in 45 of the most populous counties and found that juries rarely award punitive damages, especially in product liability and medical malpractice, and that punitive awards were strongly correlated with compensatory awards. They also found no evidence that juries award punitive damages more readily against businesses than against individuals.

Where unpredictability arises is in translating outrage into dollars, which is a different problem from the one a cap addresses. Sunstein et al. (1998) found in experiments that people largely agreed on how outrageous conduct was and how much it deserved punishment, but varied widely when asked to express that judgment as a dollar amount. That finding suggests a remedy different from a flat cap: give juries guidance, such as ratios to compensatory damages, which the Supreme Court has encouraged by suggesting that single-digit ratios generally satisfy due process.

Scripture's restitution laws offer a parallel. Exodus 22:1 (English Standard Version Bible, 2001/2016) required a thief who slaughtered or sold a stolen ox to repay five oxen, and a stolen sheep with four sheep. The law scaled the penalty to the harm and set a multiple in advance, so it was both punitive and predictable. A punishment tied to the harm by a known ratio deters wrongdoing without exposing the innocent to a lottery. A flat cap also has a cost your thread did not mention: for a large corporation, a fixed maximum may be so small relative to its profits that it no longer deters at all, while for a small restaurant the same cap may still be ruinous. A ratio scales with the harm and the conduct rather than with the defendant's size. Would a ratio approach address your concern about the restaurant more effectively than a flat cap?

Reply to Tyrone

Tyrone, your thread argued that hospitals should encourage physicians to apologize when medical errors occur, rather than following the old advice to admit nothing. Your point that many patients sue because they cannot get an honest explanation of what went wrong matched what I have read, and I want to add evidence that supports your argument.

First, most states have enacted apology statutes, under which a doctor's expression of sorrow cannot later be offered in court as proof of negligence; a few go further and shield admissions of fault. Ho and Liu (2011) used the timing of these laws across states to study their effects on malpractice claims and found faster resolution and lower payments in some categories of cases, particularly those involving more severe injuries, where patients' desire for acknowledgment may be strongest.

Second, the form of the apology matters. Robbennolt (2003) ran experiments in which participants evaluated settlement offers after an injury. A full apology that accepted responsibility made participants more willing to accept an offer, while a partial apology that only expressed sympathy had weaker or even negative effects in some conditions, apparently because it seemed evasive. Apology laws that protect only expressions of sympathy may therefore encourage the least effective kind of apology.

Third, a real program has been evaluated. Kachalia et al. (2010) examined the Michigan academic health system that, in 2001, began disclosing its mistakes to patients, apologizing and offering compensation promptly whenever its review found the care unreasonable, and compared its claims experience across the two periods. New claims per patient encounter dropped by roughly a third, lawsuits by about two thirds, claims closed months sooner and the system's spending on compensation and legal fees went down. Honesty, in other words, did not increase the hospital's exposure; it reduced it.

Scripture connects confession with healing in a way that fits your argument. In James 5:16, confession and prayer for one another are linked directly to healing. An apology for a medical error is not only a legal strategy; it is a step toward the healing of a relationship that the error has damaged, both for the patient and for the clinician who carries the weight of the mistake.

The research also suggests a practical caution for hospitals. An apology works only if it is sincere and paired with a real change, such as a review of how the error happened and what will prevent it next time; patients quickly recognize a scripted statement drafted by risk managers. Training physicians to disclose errors well, and supporting them emotionally afterward, may matter as much as the legal protection itself. Do you think hospitals should go further than apology laws require, as Michigan did, by pairing disclosure with early compensation?

References

Eisenberg, T., Goerdt, J., Ostrom, B., Rottman, D., & Wells, M. T. (1997). The predictability of punitive damages. The Journal of Legal Studies, 26(S2), 623-661. https://doi.org/10.1086/468010

English Standard Version Bible. (2016). Crossway. (Original work published 2001)

Ho, B., & Liu, E. (2011). Does sorry work? The impact of apology laws on medical malpractice. Journal of Risk and Uncertainty, 43(2), 141-167. https://doi.org/10.1007/s11166-011-9126-0

Kachalia, A., Kaufman, S. R., Boothman, R., Anderson, S., Welch, K., Saint, S., & Rogers, M. A. M. (2010). Liability claims and costs before and after implementation of a medical error disclosure program. Annals of Internal Medicine, 153(4), 213-221. https://doi.org/10.7326/0003-4819-153-4-201008170-00002

Polinsky, A. M., & Shavell, S. (1998). Punitive damages: An economic analysis. Harvard Law Review, 111(4), 869-962. https://doi.org/10.2307/1342009

Robbennolt, J. K. (2003). Apologies and legal settlement: An empirical examination. Michigan Law Review, 102(3), 460-516. https://doi.org/10.2307/3595367

Sunstein, C. R., Kahneman, D., & Schkade, D. (1998). Assessing punitive damages (with notes on cognition and valuation in law). The Yale Law Journal, 107(7), 2071-2153. https://doi.org/10.2307/797417