Medical liability under limited resources: A law and economics perspective

This paper presents an analysis of how limited resources in healthcare should affect medical liability. This has become a significant intellectual question in the debate on how to construct an efficient medical liability system. The question has, moreover, received a lot of attention where healthcare systems face increasing pressure from budget constraints. This was especially the case during the COVID-19 period. In the paper an economic perspective is used to address this fundamentally normative question, being how the law should deal with the limited availability of resources in medical liability law. The paper argues that resource allocation decisions should not be made by individual healthcare providers “ at the bedside “ , but require collective decision making at multiple societal levels. The paper also argues in favor of multi-stakeholder agreements resulting in clear, guidelines which are the most appropriate mechanism for determining how resources should be allocated. Finally, the paper also argues in favor of a negligence rule with a reversed burden of proof. This is, so it is argued, preferable to strict liability in the context of limited resources. In sum, the paper argues that the legal system and more particularly the construction of medical malpractice law should take into account the limited availability of financial resources in the construction of the medical liability regime.