The common fund doctrine is a key rule of personal injury law that is often invoked for purposes of maximizing the net compensation that an accident victim receives. If you have auto insurance medical payments coverage or health insurance, and you were injured in a motor vehicle collision, your medical bills will likely be paid by one of those insurers. Both of them have probably reserved the right to reimbursement of any sums that they paid on your behalf through their policy language. Reserving that right of reimbursement is perfectly legal. However, after paying your insurer what it laid out on your behalf, your net proceeds are going to be substantially diminished.
You Might Not Need to Reimburse the Full Amount
The common fund doctrine is typically invoked when an insurance company fails to participate or minimally participates in the personal injury case of its insured person. In either case, it will want to be reimbursed the full amount that it paid when the insured person’s lawyer did all of the work, subsidized the case by advancing his or her own money and created the fund that the insurer seeks to recover from. That’s when the common fund doctrine is ordinarily recognized to its full extent. If that insurer only minimally participated in creation of the fund, a judge will need to determine the extent of any sums that might be awarded to the insured person’s lawyer under the common fund doctrine. In either case, the insurer must pay its fair share of legal fees and costs that were incurred in pursuing recovery of the injured person.
Physician or Hospital Liens
The common fund doctrine has no applicability when the claimant is a creditor like a doctor or a hospital. A court has no discretion to diminish such a bill or a medical lien. Only the California legislature could give a judge such discretion, and the legislature has remained silent on the issue.
Letters of Protection
Some California personal injury lawyers might offer to protect a health care provider’s bill from any sums derived from a settlement or verdict in return for treating their client. In the event that a provider acts on that letter of protection, the common fund doctrine won’t apply, especially if a proper lien notice has been previously provided.
When applicable, the common fund doctrine will lower what must be paid to an auto or health care insurance company in a personal injury case. If you or a family member were injured in an accident that was caused by the carelessness and negligence of somebody else anywhere in California, contact our California personal injury lawyer here at Maison Law for a free consultation and case evaluation. You’ll be listened to carefully, and your questions will be answered too. If we’re retained to represent you, our objective will be to obtain the highest settlement or award that you deserve. If that involves raising the common fund doctrine, we’ll work toward enhancing your net settlement or award by arguing it.
Contact a Personal Injury Lawyer
After an accident involving a serious injury in the Central Valley, contact attorney Martin Gasparian for a free consultation and case evaluation. Mr. Gasparian takes a hands-on approach to every case. He believes that every client should work directly with their lawyer, get honest advice and personalized attention to detail their case deserves.
