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THERE ARE SEVERAL ways to maximize your bicycle injury settlement. One of the most effective ways is to ensure your insurance company doesn't get its hands on what is rightfully yours.
A current hot legal issue is whether you have to repay your health care insurance company from your injury settlement proceeds. The health care companies believe they have a contractual right to recovery in their plan.
They want any medical bills they paid reimbursed.
It seems odd that you have to repay your insurance company. After all, you loyally paid premiums for coverage and would expect to receive a benefit in exchange for the premiums you paid. That’s why your paid premiums in the first place.
Reimbursements are not fair and they will reduce your net settlement. But they are a fact of life.
A recent case entitled Sereboff v. Mid-Atlantic Medical Services, Inc. (2006) touched on this issue and the role of consumer friendly Federal Erisa legislation that historically exempted repayment.
Then in (2013), the United States Supreme Court reversed “Sereboff” in a case called US Airways v. McCutchen holding that the terms of an Erisa plan are paramount and that equitable defenses that are clearly waived in a plans reimbursement provision cannot be asserted.
So, the lawyer must determine if the injured bicyclist insurance plan through his employer or plan administrator are subject to Erisa because it’s a group benefit of employment with a private (vs. public) entity. If not Erisa, then the lien claim is governed by contract principles and possibly government regulations like Code of Federal Regulations.
The US Supreme Court has also held that an Erisa plan can seek reimbursement from the insured’s settlement of a lawsuit, provided it can place a lien on an “identifiable account.”
More specifically, the lien recovery companies will argue that if the injury victim or his lawyer is in possession and control of settlement funds when the lien is asserted then there is an asset to enforce an equitable right of reimbursement. So, timing and distribution of your settlement, as well as a lien reduction, are factors to consider with your experienced trial lawyer.
Having an experienced trial attorney can often help you negotiate a lien reduction based on the attorney’s rate of recovery. This savings (i.e. a 33% reduction) can be passed on to the injured client.
There’s also another lien reduction theory, called the “made whole” doctrine. If the injured party is not made whole due to low insurance policy limits by the wrong doer, it can be argued the victim should not have to reimburse settlement funds to the health insurance company. This would be inequitable. So a “waiver” of repayment may be in order. Should you have a “medical payment” coverage provision on your auto policy – these same negotiation strategies may apply.
A second form of attack on your settlement can come from a statute called Civil Code section 3045 et al. This allows a medical provider like a hospital (as opposed to a health care insurance company) to recover up to half of your recovery. I always argue their recovery begins after attorney fees and litigation costs are paid. This protects your settlement fund. (Whereas, uninsured – underinsured motorist cases can be totally exempt from repayment, it depends on the insurance contract.)
In conclusion - learning how to identify the type of lien asserted and negotiate around different types of liens requires an experienced lawyer who has studied this complex and ever-changing area of law.
Since 1983 I have watched this area of law evolve. Knowing the lien laws' nuances has helped save clients thousands of dollars. I regularly attend “lien” seminars to stay current in this fluctuating area, and consult lien experts when necessary to maximize recovery.
I take pride in maximizing your net settlement recovery by working out a reasonable settlement strategy for you and your loved ones.
©Richard L. Duquette, Esq. All rights reserved 2017 – LEGAL ADVERTISING
www.911law.com * 760-390-5234 * Podcast: Bicycling and The Law 911law.com
The information in this article is for general information purposes only. The focus of this article is on California Law. You should contact an attorney in your state for case specific advice, as details of the law and procedural requirements vary from state to state. Nothing in this article should be taken as legal advice for any individual case or situation. This information is not intended to create an attorney-client relationship; and the receipt, reading, listening, or viewing of this content shall not constitute an attorney-client relationship. Nothing in this article shall be construed as a warrant, promise, or guarantee about the outcome of your case or any other matter. This information may contain personal impressions or statements of opinion on a subject that do not apply in your case. Further, statements of law reflect the current state of the law at the time of writing and/or recording, and may not reflect subsequent changes in the law.