If there’s one thing personal injury lawyers are especially good at, it’s exploiting the misfortunes of their clients while devising new ways to line their own pockets.
Colorado House Bill 1168 is this year’s prime example. While claiming to help injured parties receive full compensation for damages caused by the fault of someone else, what it really does is guarantee that the injured person, in order to be fully compensated, must hire a lawyer.
Since most personal injury cases are handled on a contingent fee basis, that means that just when the injured party is about to be paid, the trial lawyer will extract his fee of 33 or 40 percent of the award.
HB 1168 should be titled “The Trial Lawyer Hypocrisy Act of 2010″ and its sponsors, Rep. Claire Levy (D-Boulder) and Sen. Patrick Steadman (D-Denver) should be embarrassed by the language of their own bill.
Another favorite tactic of personal injury lawyers and their lobbyists is to make the insurance company the villain. Because most everyone has had a distasteful experience with an insurance company, this task is an easy one.
“When (an insurance company) seeks repayment of the benefits provided to an injured party, the repayment reduces the amount available to an injured party to compensate … for injuries and damages,” the bill declares.
The same could be said of attorney’s fees: When an attorney takes one-third of the compensation to which an injured party is entitled, the attorney’s fee reduces the amount available to compensate the injured party.
At issue is the practice of subrogation which sounds complicated but really isn’t. Here’s how it works today:
If you are injured due to the fault of someone else and require medical treatment, your insurance company pays your medical costs according to the terms of your policy. The insurer can then sue the person at fault (or his insurance) to recover those costs. Likewise, if you decide to initiate the lawsuit and are awarded medical costs, your insurance policy states that your insurer is entitled to be reimbursed for the costs it has paid on your behalf.
Under HB 1168, your insurer would be prohibited from suing on your behalf to recover those expenses. Only you could sue the other party. So while they insurer can litigate using their staff attorneys, you, of course, must hire a private attorney who would demand 33 to 40 percent of whatever compensation you receive.
Now, who’s the real villain?
Insurance companies know that some of the medical costs they will pay for their customers must be paid from the pool of premiums collected from everyone the insure. But other costs can be recovered through subrogation.
If insurance companies can no longer subrogate — or must go to the end of the line, until the lawyers and everyone else have been compensated — then they are left with two undesirable options:
• Increase your premium to cover those additional costs.
• Or change their policies to state that if you are injured through the fault of another, they won’t pay your medical bills until you have exhausted all other remedies, including filing a lawsuit against the other party. (And even if you do file a lawsuit and win, remember that your attorney will demand 33 to 40 percent of your award for his “services.”)
So, who really stands to benefit from HB 1168? Insurance companies, whose costs will increase? Injured people, who must pay both the attorney’s fee and higher insurance premiums? Or personal injury lawyers, who can now profit from the misfortune of even more injured Coloradans?
This bill is terrible policy for everyone in Colorado — except, of course, for trial lawyers and their lapdogs at the state legislature.