Transparency is Key to Improving the Public's Opinion of Personal Injury Attorneys

When I went to law school at Savannah Law School, a branch of Atlanta John Marshall School of Law, one thing that intrigued me when visiting the open house to apply for enrollment was the Dean. I remember the Dean stating that: 

We can give you the tools to study the law, but, we cannot give you the character to be a good lawyer. You either have it or you don't. We are looking to put into the field good lawyers. The field abounds with bad examples and bad practices. We do not wish to bring members into the profession following such practices. 

As an attorney, I believe in absolute transparency when it comes to billing. For personal injury claims, the public, and the client, should be aware of certain practices that I find, arguably, unethical. The South Carolina Rules of Professional Conduct governs my ability to practice. However, these rules are standards of minimal conduct. 

Rule 1.5(c) governs contingency fee contracts that relates to the structure of billing to the client in writing and detailing disbursement. Clients should also be aware that all proceeds of personal injury claims from settlement proceeds or jury awards are taxable income and to set aside funds to pay taxes on these proceeds. Moreover, attorneys must hold the funds in a trust account for at least 5-7 business days to ensure funds clear before disbursing settlement proceeds. 

Rule 1.7, as well as sprinkled in other rules, create a duty to clients that the attorney owes a duty to clients first and foremost. However, Rule 1.15(d) requires attorneys to safeguard property in the trust account pertaining to third parties with a claim to the client's settlement proceeds.. Meaning, if the attorney receives a lien from a healthcare provider treating the personal injury claim, and a dispute arises to the portion of the lien in question such as competing liens on the proceeds, then the attorney must withhold the amount in dispute, but, the attorney may disburse amounts that are not in dispute such as unpaid legal fees and the client's net portion of the proceeds separate from the lien amount in dispute. As always, the interpretation of the rules and implementing the same in practice results in a difference of opinion on the subject.

Attorneys hotly debate this issue when receiving liens from healthcare providers. One argument is that the client should get all the proceeds less the attorney's contingency fee, and costs if applicable. However, if the attorney receives a lien on the client proceeds, and disburses the funds to the client, then the client may face liability on the client proceeds directly and creating issues for your client. Attorneys have a duty to protect the client's best interests. The other argument is that attorneys should honor the liens, as well as attorney's fees, before disbursing the net proceeds to the client to avoid claims of liability against the proceeds from lien holders. The former position might argue doing so is against the attorney's duty to the client. The latter position might argue that attorneys must abide by the interpretation of the rules holistically and recognize that the attorney must follow both rules in a cohesive manner to maintain compliance with the South Carolina Rules of Professional Conduct. 

I support the latter position and my fee contract establishes a priority of claims on the settlement proceeds to clearly explain the distribution of proceeds to the client to maintain compliance with the South Carolina Rules of Professional Conduct in a holistic matter. 

The attorney also has a duty to safekeeping of the client's property under Rule 1.15(a) of the South Carolina Rules of Professional Conduct.  The ethical question is determining what is the client's property and what is the attorney's property when attorneys have healthcare providers discount medical services. The full amount billed by healthcare providers attributes to the client's overall damages from which is the basis for sending a demand to recover the client's actual damages from the opposing party, or the opposing party's insurance company. That the healthcare providers might discount those damages is of no consequence to the client's actual amount of damages billed to the client. 

Various attorneys have been disciplined for the treatment of client proceeds from a personal injury claim bordering on both unethical as well as criminal conduct, even here in Greenville, South Carolina. First, I am very selective about the chiropractors I work with in automobile accidents. I have personally visited the facilities, met the staff, and developed relationships with the chiropractor. I choose ethical chiropractors who are also very competent in what they do in providing excellent care to my clients. Not only do I develop rapport, but I build on trust and fair dealing. I expect no less and the chiropractors I work with expect no less of me. I prefer dealing with chiropractors with a high sense of integrity and ethical practices above and beyond their skills.  

Because of the rapport and trust I have developed with certain healthcare providers, these healthcare providers in exchange inform me of general practices they have experienced with other personal injury law firms and medical billing practices without disclosure of those law firms or healthcare providers as a matter of consumer rights to their patients and the attorney's clients.   
But, once the attorney receives the settlement proceeds, the question is to determine the property interest difference between the actual bill from the healthcare providers and the discounted amount from healthcare providers. Whose property is that difference? I would interpret that the difference is the client's property as ethical matter, arguably. If you obtain savings for the client, those savings should pass to your client and not to the attorney. 

Attorneys have been disbarred and criminally prosecuted for altering bills from healthcare providers providing clients with less of the proceeds than they should have received. Some attorneys keep the difference in the billing. Now, if the difference is applied toward the attorney's contingency fee in the matter, then no ethical issue presents itself because the attorney's negotiations in a settlement agreement is a small amount leaving the client with little recovery other than to cover medical expenses and the contingency fee. Such a result represents a minimal outcome for the client and may divulge various factors under the circumstances ranging from the client did not experience much pain and suffering, the client did not adhere to the treatment plan, to the attorney's negotiation skills, and the attorney's level of zealousness representing the client in the case with a more aggressive approach. 

As part of my practice, I inform clients that, if the client does not maintain strict adherence to their treatment plan, then I will decline further representation. My fee contract also includes a provision for clients who misrepresent the facts to me as grounds for declining further representation. And, I vet my clients before accepting legal representation. I choose clients for personal injury claims who show distinct signs of pain and suffering from the accident, experience genuine issues requiring medical treatment, and have come to me hurting from the pain. The pain is real. The suffering is real. I only represent valid claims of personal injury. 

By contrast, if the attorney claims the difference from the billing instead of passing those savings to clients, and the settlement proceeds more than covers the attorney's fees and medical costs, then I am of the position that an ethical issue does arise. My position is that the difference in billing belongs to my clients. Moreover, in my disengagement letters to my clients, I provide all documentation of payments made (redacting sensitive financial information of course) along with the invoices or liens provided to me. My clients can call the healthcare providers or lien holders independently and confirm the amounts billed and the amounts paid as exactly as I have presented pursuant to Rule 4.1 of the South Carolina Rules of Professional Conduct to be truthful in statements made to others. While my manner of providing such documentation with my disengagement letter is not required by the South Carolina Rules of Professional Conduct, I believe such a practice is just good business. 

Because, my client did not just experience costs of medical treatment. My client experienced pain and suffering from the actual accident and from the subsequent treatment thereafter. The loss of sleep. The pain of movement affecting my clients' daily lives. The loss of time from work for treatments. The mileage to and from medical visits. But, it is the pain and suffering of living with the aftermath of being in an accident. No matter the amount of property damage involved in the accident, that pain and suffering is real, tangible. Quite frankly, in certain cases, you could not place a price on that pain and suffering. The inability to do what you could before. The pain, frustration, and despair that may follow. The waiting of doctors to fully diagnose your condition and the true extent of your injuries. 

My client did not ask for this pain and suffering. My client was not at fault. Yet, my client has to endure it. Damages from the medical costs of treatment is one thing. Placing a price on pain and suffering: Priceless. No amount of money could change or make up for that loss in certain circumstances, or the money offered is in no way comparable to what my client experienced. A certain hell exists for enduring pain and suffering, and my client must walk through the fires of hell. Perhaps my client may fully recover like a phoenix reborn. Perhaps my client may never fully recover from being scorched through the fires of hell having to live with those scars for the rest of my client's life. And, when negotiating settlements with insurance companies in pre-litigation, the recovery is limited to the policy amount for the opposing party or the client's uninsured motorist policy. In litigation, the jury will determine the awards, and the client is at the mercy of the jury, which is more favorable in some counties and less so in others. 

One alternative I have considered using more in my practice, should my client wish to do so, and the client has sufficient coverage in medpay under my client's automobile insurance, is for my client to file a medpay claim with their insurance company and instruct the insurance company to send me the notice of lien. The billable amount of actual damages remain the same regardless of the client's insurance company discounting medical bills. Insurance companies representing my clients do a very good analysis of medical bills from healthcare providers and adjusting correct medical codes accordingly. As an added monkey wrench into the healthcare system, some healthcare providers working with health insurance companies may be billing higher in some regards when the client's healthcare insurance involved to where the medpay claim may actually reduce the medical billing, combined with the client's health care insurance (and whatever agreement for discounting exists between the two), to merely reimburse the client for what the client has paid out of pocket. And, that presents a whole separate matter for a later discussion. I would rather have my client's medpay insurance claim do the math for my client than the opposing party's insurance company at the end of the day because my client's insurance company is acting in the best interests of my client whereas the opposing party's insurance company is not. Nonetheless, those savings pass to the client in my practice, if applicable. I never guarantee an outcome, but, being a skillful negotiator is essential to obtaining a maximum recovery for my clients. This option, if applicable under the circumstances, may be a wiser approach to consider in personal injury claims from a practice standpoint that personal injury attorneys might consider employing more.  

Whenever the client reaches a settlement agreement, the client must understand that the client is waiving the client's rights to future claims of personal injury that may not be discoverable at that time. Therefore, it is imperative that the client pay attention to the client's body to ensure that all can be done to rule out long-term injuries to clients as well that do not have a boomerang effect. Of course, this principle does not mean that attorneys should seek additional medical costs for the sake of driving up the amount of damages. The need must be real. The injury must be real. The pain must be real. The client's welfare to fully recover from the accident, and acting in the client's best interests, is paramount so that the client may recover accordingly. 

Another issue is facing insurance companies. For automobile accidents, many insurance companies use the MIST formula, which stands for Minimal Impact Soft Tissue, to reduce the amount of injuries in minor property damage impacts for automobile accidents. This formula has been debunked at least ten years ago by sheer laws of physics known to chiropractors, the medical profession, engineers, and other professions. In certain cases, even with minimal property damage to my client, the soft-tissue damage can be equally as bad or worse than those suffered in serious property damage to the vehicle because the body absorbs the impact and not the vehicle. The settlement offers from insurance companies often prove to be ludicrous that would be laughable in a sense if it were not so detrimental to my client's best interests. I find no humor in such displays of bad faith settlement negotiations pre-litigation. Enraged would be an euphemistic description followed by a string of expletives.  

From a standpoint of consumer advocacy, I believe more must be done than being aggressive with insurance companies on a client-by-client standpoint. Understandably, insurance companies want to protect against unmeritorious claims. Alternatively, insurance companies have a contractual duty to pay valid claims on the insured's insurance policy. Insurance companies are notorious for low-balling clients in settlement offers to the point of absurdity. What insurance companies do not account for is the client's pain and suffering. As I said before, if my client has to walk through hell to endure pain and suffering from something done to my client, that pain and suffering has no price tag. All an insurance company or jury can do is valuate such pain to try and place my client would have been had the accident not happened. I believe further legislation is necessary to corral insurance companies toward a more ethical approach for good-faith settlement negotiations in pre-litigation. That issue is a war of which I am willing to wage, and I am patient to fight that war one battle at a time. Good faith is an increasingly important area of developing law. 

Another issue plaguing the practice of personal injury is attorney advertising pursuant to Rule 7.2 governing attorney advertising under the South Carolina Rules of Professional Conduct. In my opinion, some of these advertising practices are misleading to the public. The client deserves a realistic expectation of what the client would receive from each settlement offer. When a client on the attorney advertisement claims that the client received $100,00.00 in a settlement, the representation does not necessarily reflect the actual numbers and accounting as to the net proceeds the client actually received. For example, if a client received a $100,000.00 settlement, then the contingency fee, including costs if applicable, is deducted first. Using a standard contingency fee rate pre-trial of 33 1/3%, the attorney's contingency fee (not including costs), would be $33,333.33. Then, let's say the client had $50,000.00 in medical bills, lost wages, and mileage expenses. The client's net proceeds would be $16,666.67 plus the amount of lost wages and mileage expenses (which could be a nominal amount in many cases or more significant in others). $100,000.00 is a far cry from $16,666.67 of what the client actually received. When in settlement negotiations with clients, I use an excel spreadsheet to calculate the net proceeds to my client when discussing settlement offers and net proceeds from settlement offers so the client is fully apprised of the decision to accept or decline the settlement offer. I may advise the client, but only the client has the right to make the choice to accept or decline the settlement offer pursuant to Rule 1.2(a) that the client has sole province to accept or decline a settlement offer and Rule 1.4 to communicate with the client of the South Carolina Rules of Professional Conduct. The bottom line is that the net proceeds to the client may not fully cover the client's damages. And, the net proceeds may be a far cry for the actual pain and suffering the client experienced. 

But, the client has to assess the risk of moving forward with litigation that may result in no recovery at all. Most clients do not want to take that risk with medical bills looming over their heads. Thus, the insurance company essentially is, usually,  offering a deeply discounted amount to the cost of litigation and the potential jury verdict against the insured. 

In conclusion, good ethical personal injury attorneys are vital when insurance falls short, the law falls short, and clients are left in between. Tort law, which encompasses personal injury, has a role to play to protect clients in limbo. The South Carolina Rules of Professional Conduct merely represent a minimal standard. Personal injury attorneys, generally, have a bad reputation in the public's eyes. The public myopia against personal injury attorneys is real, and, regrettably, understandable. More than just being an attorney, I believe in changing the hearts and minds of people I meet--one person at a time. Yes, members of the profession may have discredited our profession affecting the public view of personal injury attorneys. But, those of us who love the law, are passionate about the law, and enjoy helping others, we strive to honor the profession. To honor the profession, we also must be transparent about the issues that plague certain practices, acknowledge these practices, and choose not to perpetuate the cycle of those before us. Good personal injury attorneys exist fighting for each client's cause and honor the profession in doing so. I have the highest and most profound respect for these members of the profession. As an attorney, these attorneys are the quintessential role models that every attorney should strive to emulate, including myself. 

One of my professors, who used to prosecute attorneys for disciplinary conduct, once stated: 

Being an ethical attorney is a choice you make everyday. You have to choose to be one everyday in all that you do. You have to think about the rules before you act. Attorneys are human and make mistakes. But, the intention to do the right thing must be what governs all that you do. 

Above all, I believe that every attorney must strive to honor the profession. We owe it to our fellow colleagues, our clients, and the public. Ultimately, this outlook is a direct reflection of the words the Dean of Savannah Law School inspired in me. We can learn the tools of the law, but, it is the manner in which we choose to apply them and demonstrating strong character that define us as great attorneys honoring the profession. And, that ideal is one I aspire to live by every day.