Thanks to Clayton Griessmeyer for this post. Clayton is a recently-elected member of the Bike Fed’s Board of Directors, and he happens to be an attorney who specializes in defending people injured while riding bicycles. In this post, Clayton examines how the proposed 2013 Senate Bill 22 would benefit drunk, texting, and uninsured people driving motor vehicles at the expense of those they injure. Thanks for volunteering on our board Clayton, and thanks for this insightful post.
Wisconsin currently follows the “collateral source” rule. If a person riding a bicycle is injured and goes to trial, the lawyers at trial cannot provide the jury with details of the injured person’s health insurance or how much of the bills were paid by the person’s health insurance.
A group of Wisconsin lawmakers are trying to change the law to allow lawyers at trial to provide juries with details about how much money a victims’ health insurance corporation pays for his or her bills. Current supporters of the bill include: American Family Insurance, American Petroleum Institute, Wisconsin Manufacturers and Commerce, and other various organizations that generally favor corporations over individual persons. https://lobbying.wi.gov/What/BillInformation/2013REG/Information/9681
Several of the supporters use scare tactics via their websites to suggest things like, “As the Nation’s legal system continues to spiral out of control and billion dollar lawsuits become the norm,” National Federation of Independent Business, “We live in a society characterized by a growing see you in court mentality, ” Wisconsin Defense Counsel. When looking at the statistics for Wisconsin personal injury auto cases, the scare tactics do not match up with reality. For example, in 2009 there were 4,059 cases opened with 144 jury trials; in 2010 there were 4,209 cases opened with 135 jury trials; in 2011 there were 3,889 cases opened and 138 jury trials; in 2012 there were 3,720 cases opened and 115 jury trials. See Wisconsin Civil Disposition Summaries: http://www.wicourts.gov/publications/statistics/circuit/circuitstats.htm
Health insurance payments are considered a “collateral source.” The collateral source rule has been around in the U.S. for over 100 years. The rule was created to prevent a “tortfeasor,” from injuring someone and then going to trial and telling the jury that the damages claimed by the injured person have already been paid. If the jury hears that the injured person’s damages have already been paid, they may feel inclined to not award anything. This would result in a benefit to the tortfeasor-the person who injured the bicyclist.
As time has passed, the collateral source rule has become complicated. Health insurance corporations now have agreements with various hospitals and medical providers for reduced fees. For example, if a hospital bill is actually $100,000, the hospital may only receive payment of $80,000 from a health insurance corporation. The health insurance corporations agree to send the people they insure to certain hospitals and in return, the hospitals agree to give discounts back to the health insurance corporations.
Applying the current collateral source rule to current law goes like this: A person is hit and injured while riding a bicycle, and his or her hospital bills are $100,000. Since the the injured person has health insurance, and since his or her health insurance corporation has a side agreement with the hospital, the amount actually paid to the hospital is $80,000. If there is a jury trial, the victim’s lawyer informs the jury that the hospital bills were $100,000. The insurance corporate defense lawyer cannot tell the jury that the bicyclist’s health insurance corporation only paid $80,000 because that money came from a “collateral source.” Thus if the jury includes $100,000 in their verdict for past medical bills, an argument can be made that the person injured while riding the bike is getting something for nothing. Insurance corporate defense lawyers tend to call this, “phantom damages.”
Based on the above example, it seems unfair that the victim in the crash can claim $100,000 in medical bills when only $80,000 were paid by his health insurance corporation. However, one needs to keep in mind the rationale for the collateral source rule in the first place. In the above example, the injured person cannot control whether or not his health insurance corporation has side agreements with hospitals. There is no dispute that the actual bills are $100,000 not $80,000. Thus, there is going to be a benefit of $20,000 going to somebody. The question is, should the benefit go to the injured while riding his bike, or should it go to the “tortfeasor” the person who hit the the person on the bike?
In considering who should get the benefit, keep in mind these points. The injured person is likely contractually obligated to pay his or her health insurance corporation back any money they paid. Say the health insurance company paid $80,000 and the jury includes $80,000 for past medical bills, the victim would get nothing. Keep in mind that lawsuits take a very large amount of time and expense. To even get to a jury, the victimt has likely had to spend thousands to tens of thousands in costs before the trial even happens. Not all of these costs are recoverable. Also keep in mind that health insurance company already received the benefit of $20,000. They received this because they promised to send the people they insure who are injured to certain providers. Keep in mind that the insurance company expects the people they insure to pay monthly premiums, but the jury will not get to hear about the monthly premiums or how much they are. Consider that after a serious injury, the person’s health insurance monthly premium will likely go up. The jury will not hear this or how much it goes up and will not be able to include any money in their verdict to offset the increase in premiums.
Why not just tell the jury the past bills were $80,000 and then there is no benefit to anyone? Under this scenario there would still be a benefit to the health insurance corporation, benefit to the tortfeasor, and detriment to the innocent person who was injured riding his or her bicycle. If the jury were only told about the $80,000, the amount paid, the health insurance corporation keeps its benefit of $20,000 plus the premiums it collected from the person they insure who was injured in the crash. It also gets the $80,000 back that it paid. The tortfeasor is not responsible for $20,000 in necessary medical care. The innocent person who pays the insurance company every month does not get any of his or her premiums.
Consider this scenario. A driver chooses to drive drunk and chooses to drive without insurance. The driver hits a person riding a bike who is responsible and has health insurance. The drunk, uninsured driver saves $20,000 because he hit a someone with health insurance. If the person on the bike did not have health insurance, the drunk uninsured driver would have to pay $100,000-the cost of the medical bills. Simply because the person riding the bike pays for health insurance, the drunk, uninsured driver gets a benefit of $20,000. Thus, if Senate Bill 22 passes and you are hit by a car, the person driving the car is better off at trial if you have health insurance.
Senate Bill 22 seeks to tell juries about information that helps save the insurance corporations money. It does not include any proviso to instruct juries about the monthly premiums that we have paid throughout our lives. In short, the proposed law benefits everyone except the person actually injured.
Interestingly, the exact proposal in Senate Bill 22 has been specifically rejected multiple times by the Wisconsin Supreme Court. See Leitinger v. Acuity, 2007 WI 84.
Under our current system with differences between the amount billed by a hospital and the amount paid by a insurance companies, there will always be a benefit going to one of the parties at trial. Last year there were 115 jury trials involving personal injury/auto in Wisconsin. If each of those cases involved a difference of $20,000 that would be $2.3 million. That $2.3 million can either go to the innocent people who are injured by drunk, texting, uninsured, and otherwise negligent driver of a motor vehicle, or it can go to the drunks and insurance companies. According to their website, in 2011, American Family had $17.3 Billion in assets in 2011. http://www.amfam.com/2011-report/financials.html
I say give the benefit to the people who are injured instead of ultra rich corporations. Note that I am biased as a bicycle injury lawyer who does get a portion of my fees from helping injured bicyclists fight against corporations.
If you would like to contact your representatives to tell them to vote against this absurd law that benefits those who injure other people: the text of the proposed law is: https://docs.legis.wisconsin.gov/2013/related/proposals/sb22
You can find your senator here: http://legis.wisconsin.gov/Pages/leg-list.aspx?h=s
You can find your representative here: http://legis.wisconsin.gov/Pages/leg-list.aspx?h=a
Bicycle Injury Lawyer (and Bike Fed Board Member)
403 Venture Court Suite 2
Verona, WI 53593
The above article is not legal advice nor is it an advertisement. The above article is the personal opinion of Clayton Griessmeyer. Comments are appreciated. If you feel there are any inaccuracies, please contact me at the email above and I will respond accordingly