Monthly Archives: April 2013

US Supreme Court Helps Insurance Companies, Screws Injured People

The US Supreme Court decided US Airways v. McCutchen today, allowing insurance companies to write their way around the common fund doctrine and similar law, and taking money away from injured people.

Make no mistake – this is a big deal.

See, the world used to work like this:

  1. Step 1: Person gets injured.
  2. Step 2: Health insurance company pays medical bills.
  3. Step 3: Injured person hires attorney, spends time, money and effort to settle case with tortfeasor. 
  4. Step 4: Injured person pays insurance company back, but keeps a fair percentage (typically 1/3 of the lien) for the time, money effort and attorneys fees spent in obtaining the settlement to pay the insurance company back. Without that effort, the insurance company would have gotten nothing.

Now things are different.

Step 4 now reads “Injured person pays insurance company back the full amount, so long as the insurance company requires them to do so.”

In some cases this won’t be a big deal. For many, many cases, liens and attorneys fees will eat up much or all of a potential settlement – especially in tougher cases, smaller cases, or cases with inadequate insurance. This is a lot of cases.

Bummer.

(Howard Zimmerle is a personal injury attorney in the Quad Cities of Iowa and Illinois. He has offices in Davenport and Rock Island. He can be reached at 309-794-1660 or hzimmerle [at] mjwlaw.com).

 

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