Dallas Personal Injury Attorney Blog

As a trial lawyer who handles many types of suits, I see a lot of people with their hands out looking for a piece of any judgment or settlement which I obtain for my clients. Most people think that the plaintiff either gets to keep all of the money in a judgment, or that the plaintiff may have to pay a contingent fee to his lawyer, but otherwise gets to keep all the money.

That almost never happens. In the cases I handle, where the person is seriously injured, there are also serious medical bills to be paid. If a judgment is entered or a settlement is reached, usually the people who paid the medical bills caused by the conduct that led to the suit being filed are right there demanding to be paid back.

Private insurers, such as health insurers, often have contractual rights called "rights of subrogation" which state basically that if they pay damages caused by the negligence of somebody else, and you recover money from that person, you have to pay them back. Even where the insurance contract doesn't state this expressly, there is some law in Texas to indicate that private insurers may have this "subrogation right" anyway.

Hospitals are required by state and Federal law to accept and care for emergency patients if they wish to be part of the Medicaid and Medicare systems. It can happen, of course, that hospitals spend thousands or even tens of thousands of dollars caring for horribly injured patients who are uninsured and have no means to pay for their own care. Texas, like many other states, has a "hospital lien" statute, which provides that a hospital can take out a lien on any recovery made against the person who caused the care to be necessary - the other driver, a manufacturer of a bad product, etc. This lien must be paid out of any settlement or judgment, and it has to be paid first.

Likewise, if a plaintiff has had medical bills and lost wages paid by worker's compensation insurance, the worker's compensation insurer has a lien on any recovery the worker makes against a third party for the same injuries, and must be paid before any other claims are paid - including the plaintiff and his attorney. Finally, the Federal and state governments have a "superlien" on recoveries in civil suits to the extent that they have paid Medicare or Medicaid benefits. These liens last forever, there is no statute of limitations on them, they exist whether or not anyone knows they exist, and there are stiff civil and criminal penalties if they are not paid - and the penalties are imposed not only on the plaintiff, but also on his lawyer.

Of course, we can all agree that no plaintiff should get a "windfall" by being paid for medical bills which have already been paid. Unfortunately, the size and amount of these liens often result in a plaintiff actually recovering nothing, or a suit never being brought against someone clearly responsible. For example, I have several cases in my office now where there are liens by either the government or by hospitals which are well over $100,000. If the clearly negligent drivers in those cases (one of whom was drunk and the other jumped a median into oncoming traffic) have less than $150,000 in insurance, there will be no point in pursuing the cases, because after payment of the liens and the costs of litigation, my clients will end up with nothing. Some insurance carriers love this result—particularly the insurers of bad drivers with small insurance limits, who end up never having to pay a dime for the terrible injuries caused by their customers.

Often, an agreement can be reached with the holders of the liens to reduce their claims so that the case can go forward. Equally often, particularly in the case of some government liens, the lienholder either will not, or by statute cannot, reduce the size of their claims. I'm sure that this sort of thing sounds like a great idea when one Senator or another is complaining about "those evil trial lawyers", but when the result is that neither the injured, innocent plaintiff or the government gets their money back, and the drunk driver who caused all the pain and expense is never required to pay anything, it sure looks like bad public policy to me. The government loses tens of millions because of its insistence on getting all (or none) of its money back and its refusal to either reduce the size of its claim or pay any of the costs of asserting the claim.

I cannot advise a client to file a suit and pay all the costs of that suit with the certain knowledge that the government is going to take any money that we recover. And of course I am not willing to spend hundreds of hours of my time and thousands of dollars to get money for the government in exchange for nothing. The result? Taxpayers foot the bill, no suits are filed, and neither the guilty parties nor their insurers pay a dime.

Nationally, over 90% of lawsuits settle before they go to trial. This is true in Texas as well. Usually money changes hands, but often not: sometimes cases settle for an apology, an agreement to change the terms of a contract, or even an agreement to enter into another contract which is lucrative to both sides.

So what about the other ten percent? What makes cases go to trial instead of settling? There are a lot of reasons for that, but they can be distilled into three general categories.

In the first category are the cases in which one side or the other is being unreasonable and unrealistic. For example, a plaintiff who wants a million dollars for a car crash in which he received only a broken leg is going to have to try his case, because no insurance company is going to pay that to settle his case. Equally often, an insurance carrier offers to pay almost nothing for serious injuries, hoping that the plaintiff or his lawyer will be too afraid to take the case to trial, or will lose the trial because of an error. Juries see cases with either frivolous, unreasonable claims by plaintiffs or equally frivolous, unreasonable defenses by defendants every day - and sometimes they see both a frivolous claim and a frivolous defense in the same trial.

Almost every case I have handled in 25 years of litigation has involved settlement discussions. With few exceptions, the lawyers for the parties had a good understanding of the "market value" of the case, that is, whether the plaintiff was likely to win, and if so, what a jury would be likely to award. Part of the lawyer's job is to advise the client on the settlement value of the case. Cases go to trial primarily because either my client or the other lawyer's client doesn't take our advice. That's fine, of course: it is the client's case, not mine, and if my client wants to take a chance on what a jury might decide, that is their choice.

Another type of case that goes to trial is the "matter of principle" case. If one side or the other believes totally in their position and is unwilling to compromise and unable to see the other side's argument at all, the case is going to trial. Settlements obviously have to be agreed upon, and if one side or the other is unwilling to compromise, only a jury can resolve the dispute. This type of thing almost never happens in a car wreck case or a contract case because the issues are not that personal: very few people are going to feel personally humiliated, or that they have sold out their principles, by settling a case over whether a stop light was red or green at the time of an accident. Corporations arguing over which one of them owes shipping charges don't worry much about whether anybody will be embarrassed: they worry about the bottom line. That isn't true when a professional has been sued for malpractice, or where someone has been accused of ethical or moral misconduct, or where the case involves religious practices or racial discrimination. In those type of cases, while it may be economically reasonable to settle a case, it can often be emotionally impossible for a defendant to settle, or equally impossible for a plaintiff to accept a reasonable amount in settlement without getting to "tell their story" to a jury. Indeed, it sometimes happens that one side or the other does not care about money at all, and the only goal is to get a court judgment which says that they were right.

The worst reason for a case to go to trial is because the parties to a case haven't really thought about what they are doing until they have spent so much money in litigation that they feel they have to go ahead and finish the dispute in a trial. I think this is always the fault of the lawyers involved, who have a duty to sit down with their clients early on and discuss what the litigation is going to cost, and what results the clients can reasonably expect. Texas courts now routinely order cases to mediation fairly early on in litigation, for the specific purpose of forcing the parties to get together and seriously think about what they are doing with the aid of an impartial mediator appointed by the court. The mediator always discusses the risks with each side very bluntly, and many cases get settled as a result.