BIG BUSINESS WINS........AGAIN!
Imagine you are in a car accident. You are seriously injured and require surgery. Your doctor assures you that you will make a good recovery. You consult with an attorney who tells you that the accident was the other driver's fault and that you have a solid case.
After a lengthy medical treatment, you are discharged by your doctor. You have made a good recovery, but not 100%. The doctor says that you will always have some pain and restrictions, but tells you to get on with the rest of your life.
Your lawyer submits your case to the other side. They want to settle. Unfortunately, the driver that caused the accident has only a limited amount of insurance. Despite the seriousness of your injuries and your on-going pain, the lawyer convinces you that it's best to settle for the amount of insurance available, even though your case has greater value.
At the last minute, your medical insurer notifies you that they have a lien against your recovery for the money they paid out for your treatment. Since these medical expenses exceed the amount of your settlement, they want all of the settlement funds. Although this scenario seems unlikely and unfair, it happens every day.
The question of fairness was recently decided by the United States Supreme Court. Reversing a decision of the Third Circuit Court of Appeals, the Supreme Court, in U.S. Airways v. McCutchen, said that fairness doesn't matter. Since the insurance contract between McCutchen and his employer didn't require U.S. Airways to take less than the full amount of their lien, McCutchen had to pay them his entire recovery. McCutchen also argued that U.S. Airways should be responsible for its proportionate share of his attorney's fees and costs because U.S. Airways didn't hire a lawyer and, in fact, did nothing to obtain the settlement. Since the insurance contract was silent on this point, the Supreme Court returned the case to the lower court to determine this issue based on an equitable rule known as the Common Fund Doctrine, a doctrine that they refused to apply to the entire case.
The Supreme Court didn't have to take this approach. They could have applied the rules of Equity, as the Third Circuit did, which found that fairness was more important than the terms of the insurance contract. Equitable principles are used to determine medical liens from government programs, like Medicare and Medicaid.
Imagine you are in a car accident. You are seriously injured and require surgery. Your doctor assures you that you will make a good recovery. You consult with an attorney who tells you that the accident was the other driver's fault and that you have a solid case.
After a lengthy medical treatment, you are discharged by your doctor. You have made a good recovery, but not 100%. The doctor says that you will always have some pain and restrictions, but tells you to get on with the rest of your life.
Your lawyer submits your case to the other side. They want to settle. Unfortunately, the driver that caused the accident has only a limited amount of insurance. Despite the seriousness of your injuries and your on-going pain, the lawyer convinces you that it's best to settle for the amount of insurance available, even though your case has greater value.
At the last minute, your medical insurer notifies you that they have a lien against your recovery for the money they paid out for your treatment. Since these medical expenses exceed the amount of your settlement, they want all of the settlement funds. Although this scenario seems unlikely and unfair, it happens every day.
The question of fairness was recently decided by the United States Supreme Court. Reversing a decision of the Third Circuit Court of Appeals, the Supreme Court, in U.S. Airways v. McCutchen, said that fairness doesn't matter. Since the insurance contract between McCutchen and his employer didn't require U.S. Airways to take less than the full amount of their lien, McCutchen had to pay them his entire recovery. McCutchen also argued that U.S. Airways should be responsible for its proportionate share of his attorney's fees and costs because U.S. Airways didn't hire a lawyer and, in fact, did nothing to obtain the settlement. Since the insurance contract was silent on this point, the Supreme Court returned the case to the lower court to determine this issue based on an equitable rule known as the Common Fund Doctrine, a doctrine that they refused to apply to the entire case.
The Supreme Court didn't have to take this approach. They could have applied the rules of Equity, as the Third Circuit did, which found that fairness was more important than the terms of the insurance contract. Equitable principles are used to determine medical liens from government programs, like Medicare and Medicaid.