Pennsylvania Injury Law Report : Accident Attorney Philadelphia: Personal Injury Attorney Philadelphia (PA), Injury Lawyer Philadelphia - Kreithen Baron & Carpey

The U.S. Airways v. McCutchen, decided April 16, 2013, case complicates the finality of any personal injury case where a lien is involved. McCutchen was injured in a car accident and his personal injury lawyer obtained a settlement on his behalf in the amount of $110,000. His employer, U.S. Airways, paid medical bills on his behalf in the amount of $66,800 through a health insurance plan under which McCutchen was a beneficiary. U.S. Airways sought full reimbursement of the $66,800. When McCutchen refused to pay the money back, U.S. Airways sued him. The case went all the way up to the United States Supreme Court. SCOTUS found in favor of the employer, U.S. Airways.

This is a horrible decision for plaintiffs. SCOTUS recognized how problematic its holding was.This is from page 16 of the opinion.

The rationale for the common-fund rule reinforces that conclusion. Third-party recoveries do not often come free: To get one, an insured must incur lawyer's fees and expenses. Without cost sharing, the insurer free rides on its beneficiary's efforts — taking the fruits while contributing nothing to the labor. Odder still, in some cases — indeed, in this case —the beneficiary is made worse off by pursuing a third party. Recall that McCutchen spent $44,000 (representing a 40% contingency fee) to get $110,000, leaving him with a real recovery of $66,000. But US Airways claimed $66,866 in medical expenses. That would put McCutchen $866 in the hole; in effect, he would pay for the privilege of serving as US Airways' collection agent. We think McCutchen would not have foreseen that result when he signed on to the plan. And we doubt if even US Airways should want it. When the next McCutchen comes along, he is not likely to relieve US Airways of the costs of recovery. See Blackburn v. Sundstrand Corp.,115 F. 3d 493, 496 (CA7 1997) (Easterbrook, J.) ("[I]f . . . injured persons could not charge legal costs against recoveries, people like [McCutchen] would in the future have every reason" to make different judgments about bringing suit, "throwing on plans the burden and expense of collection"). The prospect of generating those strange results again militates against reading a general reimbursement provision — like the one here — for more than it is worth. Only if US Airways' plan expressly addressed the costs of recovery would it alter the common-fund doctrine.

Before this decision, it was common for health insurance lien holders such as U.S. Airways to reduce their lien at least by the amount of the attorney fees and costs expended by the plaintiff's attorney in the underlying injury case. But no more. Going forward so long as the plan document states that the plan is entitled to 100 percent reimbursement employer health insurance plans will have no reason to reduce their liens.  Of course, all plan administrators will make sure that their plans demand 100 percent reimbursement from personal injury matters.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Tort reform is a buzzword for limiting the average guy's rights to the court room by big business and their supporters.  When one time Supreme Court nominee Robert Bork settled a case against Yale University last year for injuries he sustained when he fell at the alumni club, he reached the height of hypocrisy.

Bork sought $1 million in damages, claiming the Yale Club was negligent in not providing a handrail or stairs to the stage on which he was set to deliver a speech in early June 2007.  He was 79 years old at the time. His lawsuit stated  the fall caused a large hematoma to form on his leg, inflicting "excruciating pain" and requiring surgery and months of medical treatment.

He is considered one of the leaders of the tort reform movement. This is a man who spent a large part of his professional life going out of his way to limit the ability of people to seek compensation for personal injuries. I guess his own rules don't apply to him, and that's the irony. He should have and did have the right to be compensated for what sounds like pretty serious injuries. Everyone should, for legitimate claims. Taking those rights away  from people is just dead wrong. I wonder if Bork realizes that now, late in his life.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Yes, but not the way the recession is affecting everyone else.

What I’ve notice is this: Vendors I deal with are more willing to negotiate prices with me. Many of my clients are more anxious and hope that the courts will give them earlier trial dates, (they won’t). Anecdotally I’ve noticed that insurance companies are stingier with their settlement offers, and are slow in delivering settlement checks.

However, personal injury law practices are much more affected by changes in the law than the public is aware of. Washington, Harrisburg as well as the state and federal courts are constantly making changes in the law that affect the rights of injured plaintiffs. Attacks on victim’s rights are cyclical, as are changes in the economy. Those cycles usually do not go up and down at the same time. I certainly hope to ride out the recession like everybody else. What’s coming down the pike to attack my clients’ rights is as of now an unknown, but whether or not we are living through a recession; there will certainly be attacks of the rights of accident victims. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Our founding fathers did not foresee subprime mortgages, credit swaps, collateralized debt obligations, and the housing bubble, but they did foresee the need to preserve the rights of citizens to have jury trials in civil cases. The Seventh Amendment to the U.S. Constitution reads as follows: 

Amendment VII: Rights in Civil Cases

In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law. 

In today’s legal community are citizens getting their day in court in front of a jury of their peers? The answer is generally no. There are several reasons for the lack of use of the jury trial as a means to resolve dispute is civil cases. 

• Rise of contractually mandated arbitration clauses. For example, take a look at the typical automobile insurance policy. It usually contains a clause to the effect that in uninsured or underinsured motorist cases, each party will choose an arbitrator, and the two arbitrators will select a neutral. (In Pennsylvania, since the holding in Insurance Federation vs. Koken, auto carriers are no longer required to have arbitration clauses in their policies. The implications of Koken, and whether the ruling was more favorable to claimants or to insurance carriers will be left for another article.) 
• Greater use of Alternative Dispute Resolution (ADR) as a means of resolving claims for damages. 
• Court mandated settlement conferences. 
• Impossible time requirements and notice of trial imposed on litigants by the Courts. For instance, it is not uncommon in Philadelphia and Montgomery County to be on twenty four hour notice, or less, of an upcoming trial. So while litigants are made aware that their case may be called for trial in any particular month, the litigants are not given anything close to a date certain for trial. This can place severe constraints on parties, witnesses and expert witnesses. It is no surprise, therefore, that some counties impose these constraints on parties as a method of clearing their dockets of cases by forcing the parties to settle. 
• Lack of trial experience of counsel. ADR is a good way to resolve some personal injury cases. But, with the increase of the use of ADR, and mandated arbitration, fewer and fewer personal injury lawyers are gaining actual jury trial experience. 

Trial lawyers represent people who can least afford lawyers, which is why the contingent fee system in personal injury cases is so important to ensuring access to the court system. It evens the playing field. While alternative means of resolving disputes is useful, helpful and appropriate in some cases, other cases require a hearing in front of a jury as a means of maximizing a client’s claim. As long as the client is informed of the trial risks and related expenses, counsel must be ready to utilize the jury system.

• Email This
• Print
• Comments
• Trackbacks
• Share Link