New Illinois Law Helps Injury Victims
The Illinois legislature recently passed a bill to limit recovery of subrogation claimants. House Bill 5823 has passed both chambers and now goes to the governor’s desk. It is expected that the governor will sign the bill.
The bill says, to paraphrase, that subrogation claims are limited to a pro rata share of the amount recovered. The bill does not apply to workers’ compensation claims, medical provider’s lien, or to uninsured/underinsured claims.
Subrogation claims may now be reduced by a petition with the court. Claims of entities that have not made a claim may be adjudicated. The lien is now reduced by comparative fault and by the uncollectability of the full value of the claim. After reducing the claim for comparative fault or collection difficulties the party asserting the subrogation claim gets reduced by collection costs, attorney’s fees and litigation expenses.
This bill, assuming it becomes a law, will make the settlement process easier. Without this law, insurance companies claiming subrogation rights could take enough of the settlement that the injury victim would get an insufficient amount to warrant settlement. For instance, under old law, assume the following: A person gets hit from behind in her car. She suffers a neck injury requiring surgery. Her medical bills are $50,000.00, which got paid by her health insurance coverage. The full value of the claim is $100,000.00. The negligent driver has a $20,000.00 policy and no assets. Under old law the health insurer would claim the entire policy after attorney’s fees and costs. The client/victim gets $0. Why should the victim agree to settle?
Assume the same facts under new law. The court can adjudicate the claim so that there is some recovery for the client/victim. The full value of the claim is $100,000.00. The negligent driver’s policy is only $20,000.00. The insurer gets one half as much as the victim because the victim’s claim ($100,000.00) is twice as big as the insurer’s share ($50,000.00). The victim gets $13,333.00, less attorney’s fees and costs. The health insurer gets $6,666.00, less fees and costs.
This act preserves a fair split between the amount of money available. Both the insurer and the victim walk away proportionally equal. It is unfair for an insurer to take an entire settlement from an injury victim merely because there are insufficient funds to pay both. The act facilitates settlement by preserving the parties respective positions.
Injury victims are the people who seek the protection of insurers. They deserve protection. Insurers are able to spread the costs of the losses among a large amount of people who make the insurer whole by paying premiums. The injury victim has no such ability. Instead, the injury victim normally has one or very few such losses. Tort victims, whether they are the victim of a simple car wreck, or a bad product, deserve the protection the legislators have provided with this bill.
Ackerman Law Office, P.C. has been protecting victim’s rights for years. We are available to help victims on a contingent fee. We fight hard for clients, providing them with prompt action and personal attention.