Did CNN miss the real injustice?

[Slik Geek]

Did anyone else see the irony in this story:

http://www.cnn.com/2008/US/03/25/wal...tle/index.html

Wal-Mart's health insurance plan sued to recover the $470,000 in medical expenses that were reimbursed by the trucking company which was apparently deemed liable for this woman's injuries. The article bashes Walmart for pursuing their rights under the plan for recouping medical expenses if an employee collects damages in a lawsuit.

While I understand their feelings in this situation, and can't even imagine their hardship, I'm puzzled that the more significant injustice in their plight is ignored.

They were awarded about $1 million in their lawsuit against the trucking company involved in the crash. After legal fees were paid, $417,000 was placed in a trust to pay for the medical care.

The attorney(s) charged more than half of the award in legal fees????!!! Over $500,000? Instead of CNN asking why Wal-Mart pursued the reimbursement, shouldn't they first be asking the law firm that gouged the couple why they aren't giving them a break?

[docrowan]

It seems to me there is not any real competition in the trial lawyer market. If I have a legitimate lawsuit I wish to pursue, then the contingency fees should be based on how good a case I have and how likely I am to win. I understand if the trial lawyer takes my case on contingency, he is taking all the risk, if he loses my case, HE's out his time and money, not me. But shouldn't the percentage be based on how good a case I've got? In other words, if I've got a poor chance of winning, contingency fees may need to be 40 to 50 percent of the awarded amount. But if I've got a very good case, with a bus full of nuns as witnesses, contingency fees should only be 10 to 20 percent of the awarded amount. Also, it seems to me the contingency percentage should be cut at least in half if we settle out of court. The trial is where the risk really comes in.

[Uncle Cracker]

Many attorneys set up a fee structure that is dependent on the settlement. By agreeing to work in a speculative capacity, and taking the burden of financial risk from the client, the attorney will earn a much larger fee than he would if he was paid up front without regard to the outcome. Larger risk (for the attorney), larger reward. There are also fees and costs, investigative and other expenses, fees charged by doctors and other "expert" witnesses brought in to support claims, and costs for other resources, all of which are underwritten by the attorney in these cases, and often for years leading up to a settlement or award. And then there is the wait for actual payment of the damages. This arrangement is the only way many less affluent people can afford to pursue a lengthy legal action to its ultimate conclusion.

In contrast, how many doctors do you think would pay for your hospitalization if your medical outcome is not successful? Or agree to waive their fee if you are not cured of whatever it is you are treated for?

Now, before you flame me, let me say that this is only an explanation of how and why these things happen and appear the way they do. Personally, I can't stand lawyers, nor the litigious society we live in today.

And, in this particular case, I think the lawyer erred in not discovering that Wal-Mart could potentially come in and add additional financial liability to his client by taking back the paid insurance benefits in the event that a judgment was won. This eventuality should have been factored into the amount of the claim, and eventually the settlement. If the purpose of the legal action was to provide for this poor woman's long-term care, then somebody (presumably the attorney) totally dropped the ball. This cannot be the first time that this legal loophole has been exploited by Wal-Mart (or somebody else), so there is no reason that the attorney did not have it on his radar. Something is rotten in Denmark. Hopefully, the public exposure this case is getting will lead to a more amicable solution.

[ironhat]

Couldn't the attorney be sued? OTOH, I've never heard of it happening.

[ejs1097]

Lots of things to consider here. First it sounds like Walmart isn't suing but the company Walmart contracts with to provide health insurance. The article can be interrupted either way. A convenience store here called Sheetz had an e coli incident with chopped tomatoes in sealed bags they used for sandwiches, several stores in several locations were effected. The media always referred to it as Sheetz's e coli, but it was traced to the supplier, but Sheetz gets the bad name and rap.

Different companies contract with insurance providers in different ways. My company for example (maybe like walmart) pays for the network and management of healthcare but pays every "approved to pay" penny, not the insurance company. So it might be Walmart's loss.

I've never read in my insurance booklets that says the insurer can sue for court cases. But basically, you hold a contract with an insurance company to pay for your bills. If someone else ends up paying, such as in this case that contract should be exclusive of the insurance companies...but the article states it was in the fine print. Insurance won't typically co-ordinate with auto accidents as well.

I would also think the lawyer should have not sued for medical bills but Pain and Suffering or something that wouldn't be linked directly to already paid medical bills, this was for long term care, she probably isn't insured anymore through Walmart.

Everyone likes to complain about Walmart and their hold on the market, but they played in the same arena under the same rules as everyone else. Not always nice though. I get tired of the NY Yankees and their record and payroll and how no one else can compete (except for a few teams), but they play within the rules so I can't fault them.

[Warren]

My younger brother, as an attorney, specialized in suing incompetent attorneys. Happens all the time. He wasn't all that popular with the other members of the bar.

Much as I dislike his choice of profession, as a practising attorney he was always ethical and put the needs of his clients at the fore. I suspect that why he drives Subarus and lives in a nice little tract house.

Now he's a judge. Everybody dislikes him now. I told him, "Welcome to the club." He's now in the position I was as a cop.

[Anna]

Eric, I think it is common for insurance companies to sue to recoup their expenses if someone else offers to pay for your medical expenses. This is true especially in auto accidents. I think there is a common clause in the contracts that specifically state so. If you get into an accident, and the other party is at fault, then the other party's insurance is supposed to pay for your care. If in the meantime your insurance paid, then the monies from the other party rightfully belongs to your insurance company (at least up to the amount they've already spent).

Legally, Wal-Mart is within its rights to get the money, and that's why the Appeals Court agreed. It's a contract thing. Whether or not Wal-Mart agrees to forgo the money is up to them, but they have no legal reason to do so. I do agree with the spokesperson, though, that giving up on the money will not be fair to the other members of the group which, in this case, comprise a shared risk pool.

In reading the article, I'm not even sure if the Shanks won in court or if they agreed to a settlement. I think a jury verdict would probably have given them more money. $1M for a case like this, if the trucking company really is at fault, seems a bit small. And there is not much mention of the specifics of the accident.

If the attorney is so eager for Wal-Mart to give up its claim, maybe someone should suggest to him that he can give up some of his fees to his poor clients. Even counting the medical experts who testified, if any, they're only about $5K to $10K a pop. I don't see him calling 10 expert witnesses to the stand, especially not if it's a settlement. So instead of charging $500 an hour, the lawyer can retroactively reduce his fee to, say, only $250. That should provide the Shanks an additional $200K or so.

But that's assuming this lawyer has a heart.