INSIGHTS On Massachusetts Personal Injury Law

Welcome to the SUGARMAN blog. We'll be sharing our perspectives on the state of the law and current legal issues in Massachusetts personal injury law. Issues relating to medical malpractice, construction site injuries, premises liability, product liability, motor vehicle accidents, insurance, and more will all be reviewed here by our team of lawyers who have prosecuted some of the most complex cases in Massachusetts personal injury law.

Articles Posted in Compensatory Damages

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In virtually every personal injury case, there is a claim (often called a lien) by a third party to be repaid out of the case settlement.  Most frequently this lien is for the amount of medical benefits paid because of the injury.  How this lien for repayment relates to the attorney’s contingent fee usual in a personal injury case is important to the net amount that the injured victim actually receives from a settlement.  Clients often express the concern that after health insurance or other third parties are repaid and after the percentage is paid for attorney’s fees, there will be little left to compensate them as injured victims.  This concern is well-founded where the settlement in a personal injury claim has to be discounted for reasons such as insufficient insurance, inability of the guilty party to pay or disputed liability.

The relationship between liens and fees depends on the type of lien.  Workers’ compensation insurers are required by law to pay attorney’s fees and expenses in the same proportion as their claim bears to the total injury settlement.  In essence, workers’ compensation insurers pay part of the attorney’s fees and expenses.  Medicare liens operate the same way, with Medicare reducing its right to repayment by its proportionate share of attorney’s fees and expenses.

The story is different for health insurers in Massachusetts.  Health insurance liens are entitled to repayment in full without having to take a reduction for attorney’s fees and expenses.  This was the result of a Supreme Judicial Court case, Pierce v. Christmas Tree Shops.  This rule has the potential for creating the situation where the insurer and the attorneys receive most of a settlement with the injured victim receiving little.  Attorneys representing personal injury victims should attempt to negotiate a lien reduction with the health insurer to avoid this.  Health insurers often, but not always, are willing to give some credit for attorney’s fees and expenses where collecting their full lien will deprive the injured victim of compensation. 
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1.  What happens when your lawyer refers you to another firm?

Suppose your local lawyer wants to refer your personal injury case to another firm. This often happens when the case requires specialized expertise or the size and complexity of a case is too big an undertaking for a solo practitioner or small firm. An obvious question is what effect this referral has on fees. Clients often wonder if they will have to pay two different contingent fees. The most usual arrangement is for the referring lawyer and the new firm to split the agreed contingent fee. Thus if the fee agreement is for a fee of 1/3, that is the total fee to the client with the referring lawyer and specialty firm splitting this 1/3 fee. If this happens, Massachusetts requires that the contingent fee agreement say that the fee will be split. Our rules also require that the client specifically acknowledge and agree to this fee splitting. Our rules also require the lawyers to disclose the details and percentages in the fee splitting arrangement if asked by the client. For this reason, a referral from a local or general practice lawyer of a personal injury or wrongful death matter to a firm concentrating in these areas only can benefit the client. For the same percentage fee, the client receives the services of both lawyers and firms.
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The U.S. House of Representatives recently passed the so-called “Help Efficient, Accessible, Low Cost, Timely, Health Care (HEALTH) Act of 2011” (“H.R. 5”). If passed into law, this H.R. 5 bill would take away the rights of injured patients by capping all compensatory damage awards for pain and suffering in medical malpractice cases to $250,000. The bill also would severely restrict patients’ ability to seek redress against drug companies and medical product manufacturers who profit from the manufacture and sale of dangerous and defective products and medications.

Our law generally provides for compensatory awards, otherwise known as non-economic damages, to compensate injured patients for the suffering caused by their injuries, such as loss of sight or paralysis. If imposed, the cap would apply to injured children as well as adults, and would be imposed regardless of the extent of harm or disability imposed.

The one-size-fits-all cap imposed by the H.R. 5 bill would remove any incentive to improve patient safety and would leave people at greater risk for injuries due to negligent care. According to the Institute of Medicine (IOM), preventable medical errors kill as many as 98,000 people per year at a cost of $29 billion. If the Center for Disease Control classified medical errors as a category, it would be the sixth leading cause of death, killing more people annually than auto accidents or guns. 
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Many times a client will ask for a lawyer’s opinion regarding what a personal injury claim is worth. Answering this seemingly simple question can be a complex legal analysis of available parties, potential injury claims, legal liability and the unique way in which each plaintiff suffers harm. At its essence, the value of a personal injury claim is what a jury in the county where the case is filed is likely to award at the conclusion of a trial, factoring in the likelihood that the plaintiff will prevail. The first step in this analysis is understanding what damages a jury may permissibly assess.

With very limited exceptions primarily dealing with Wrongful Death claims, Massachusetts’ law allows juries to award only Compensatory Damages” to personal injury victims. Compensatory damages provide a plaintiff with the monetary amount necessary to replace what was lost, and nothing more. The purpose of Compensatory Damages is to place the plaintiff in the same position as if no wrong had been done to him/her by the defendant. Other states allow juries to award “Punitive Damages” in personal injury claims. The purpose of punitive damages is to punish a defendant for his or her conduct as a deterrent to the future commission of such act. In Massachusetts, Punitive Damages in personal injury cases are recoverable only for Wrongful Death resulting from gross negligence and/or willful, wanton or reckless acts. This means that in the vast majority of personal injury cases in Massachusetts, the focus for determining damages needs to be on what the plaintiff lost, not on the conduct of the defendant. It is the role of the attorney to determine how each individual plaintiff has been specifically harmed by the defendant’s conduct and what monetary amount would properly compensate those unique circumstances.
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