The purpose of any personal injury lawsuit against a careless party is to recover monetary damages for an injured person. The monetary amount is intended only to compensate the person, or restore them to the position in which they would have been had the injury not happened.
Monetary damages may be awarded to a person for a number of different types of harms. In most cases, the most concrete of these categories of damages is compensation for medical bills related to treatment caused by the carelessness.
The medical bills of many people are initially paid by the health insurance company. During the course of a trial, jurys often become aware of the fact an injured person is covered by health insurance. Usually, testimony about lost work, or from coworkers is offered, and the fact an injured person is employed is elicted during the testimony. It is not hard for people to figure out the person is covered by insurance even if evidence about it is excluded by a judge. Moreover, many defense lawyers suggest the presence of health insurance or otherwise elicit evidence to increase a jury's awareness of the presence of it. Defense lawyers know that a jury's awareness about a person's health insurance coverage tends to result in reduced damages awards.
Why are verdicts lower when juries assume that the person's medical bills were paid for by the health insurance company? Juries are simply resistant to awarding compensation when they believe doing so creates what they percieve to be a double recovery, an injustice. They figure why should we award this person the full amount of her medical expenses when her bills were already paid by her insurance company? They figure, even if we do make such an award, the the full award of medical expenses is overcompensating and the verdict must be reduced in other areas, such the amount of her compensation for pain and suffering.
However, when juries speculate about the impact of insurance paying medical bills they make a wrong assumption. They assume the compensation in the verdict will be given to the injured peson and that the health insurance company will not get any of money awarded. This assumption is very, very wrong.
It is wrong because almost all health insurance plans now have the right of reimbursement from any verdict. Check out your own policy and look for a paragraph often called "subrogation." Subrogation provisions give the health insurance company a form of super lien. Subrogation means the health insurance company is paid first from any verdict, sometimes even before the person can pay her attorney or the costs of prosecuting the lawsuit.
Therefore, when a jury resists awarding full medical expenses to an individual because of a reluctance to give the person a double recovery, it actually creates a windfall for the careless defendant and undercompensates the injured person.
More will be written about the right of subrogation in this blog. However, as an inital matter, we will just introduce this idea of subrogation and address the specifics of this phenomenon at a later date.
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