Category Archives: torts

How a Lawyer Can Maximize Your Injury Case’s Value: the Collateral Source Rule and Healthcare

This post will answer the common question, “Do I need a lawyer?” in connection to an accident case. It might be a small accident with minimal medical expenses, such as a doctor’s visit or trip to the ER. With no lingering injuries, it would look like the case is small and you can handle it by yourself without a lawyer. If you already took the initiative to call the other person’s insurance company, there’s a good chance they asked some questions about your medical treatment and offered to pay your bills. Sounds easy enough. Why bother getting a lawyer? Won’t a lawyer just take 1/3 of what? I can get 3/3 without a lawyer. That is correct and insurance companies will love you for just wanting your bills paid. While it’s true that we lawyers take our fees out of your recovery (known as a contingency fee), there is a good chance that we can the increase in recovery that we can obtain for you greatly outweighs the fee. How do we do that? Most succinctly: we know what we’re doing.

Lawyers experienced in accident cases know how to value a case and how to obtain that amount from the insurance company. For one example, my last post highlighted the diminished value claim, a cause of action in a motor vehicle accident case in addition to the personal injury and property damage. This is not a well-known claim and may be overlooked by many people. An attorney can look into it. I certainly do when I handle my clients’ cases. A client’s case is almost always worth more than his or her out-of-pocket medical bills. One reason for that is collateral source reduction.

The collateral source reduction rule in Connecticut holds that a plaintiff cannot recover what his or her health insurance (with some exceptions, notably ERISA plans) pays in medical expenses. It would appear that a case really is worth only out-of-pocket payments. Further understanding of the collateral source rule proves otherwise. Although a plaintiff cannot usually recover what the insurance company pays, the plaintiff can recover what he or she pays to to secure the healthcare (the collateral source), which are healthcare premiums and can be worth quite a deal. The true value of a case can therefore have economic damages far greater than what you paid out in healthcare expenses. When insurance adjusters offer to settle a case with you directly, they’re not including this number.

The movie Collateral is an allegory of the collateral source rule. Tom Cruise’s psychotic hitman character represents the insurance industry. Jamie Foxx’s everyman working stiff character represents plaintiffs and policy-holders.

There are many other advantages lawyers have over self-represented parties including experience in prosecuting and settling injury cases. Knowledge of the law and procedure is the biggest advantage. This is an example on how that can make your case more valuable. Dealing with an insurance company yourself might sound easy enough but the adjusters are more likely slapping five with one another after you hang up rather than making arrangements to send a Brinks truck to your house.

Even if you have no out-of-pocket expenses, your case still has value.

Diminished Value Claims for Auto Accident Cases — Maximizing Your Recovery

I recently settled a client’s auto accident case. Not only was she injured, her car was damaged as well. In many auto accident cases, the plaintiff handles the property (car) damage case directly with the insurance company, whether his or her own or the defendant driver’s, and leaves the personal injury component to the attorney. Auto property damage is usually not litigated because there is often not a lot of question about the value and the plaintiff needs the car repaired quickly. Assuming insurance covers the damage and repairs to the car, the plaintiff is still not fully compensated for the loss. The reason is that a car, no matter how well repaired, is worth less after it is involved in a collision. Should the plaintiff attempt to sell the car, he or she would not be able to receive as much had the car not been involved in the collision. In a situation in which another driver is responsible for the accident and the ensuing personal injuries and property damage, it follows that the defendant driver should be responsible for the reduction in the car’s resale value.

Connecticut and many other states have a cause of action under common law that addresses this issue. It is known as a diminished value claim. The DV claim (not to be confused with domestic violence on the criminal side) entered Connecticut case law in 1944 with the case Littlejohn v. Elionsky, 130 Conn. 541 (1944). Littlejohn and its progeny, which includes Stults v. Palmer, 141 Conn. 709 (1954) and Damico v. Dalton, 1 Conn. App. 186 (1984), hold that a defendant is liable for the diminished value of a plaintiff’s vehicle which is calculated as the difference between the vehicle’s value before the accident and the value after the accident. Market value is used.

I owe it to myself to tell you, if you’re looking for a car that will decrease in value, the Wagon Queen Family Truckster…You think you hate it now, wait ’til you drive it.

My client and her car were rear-ended on I-95. Liability was clear. My client recovered from her injuries. The car did not. Although the body was repaired, the frame was bent. Damages were extensive but the car was not totaled. Frame damage makes a car difficult to sell and often at only a fraction of its pre-accident value. The way we prosecuted the DV claim was to have an auto appraiser appraise the car and then submit the DV demand with our personal injury demand to the defendant driver’s insurance company. We were able to resolve the case without filing suit. Such cases however can be litigated in court with the personal injury case. It is important to note that even though the client accepted an insurance payment for the repairs of the car, she was still able to recover the diminished value afterward. Diminished value claims are only available against a defendant (and through his or her insurance) and not a plaintiff’s own collision policy.

Not only did the Blues Brothers go to jail for their exploits, they were hit for a huge diminished value judgment for all of the police cars that were damaged in their car chase. That included both actual damages and bribes to Cook County officials.

The DV claim is one of many examples of why it helps to have a lawyer handle your accident case. An attorney will know what claims are available and maximize your recovery. It is true that a person can settle his or her own case with the opposing insurance company. Insurance companies love that. Your damages in a case are always more than your bills and you should be compensated for them. In my next post, I will explain that concept as it relates to insurance premiums.