Insurer Group Urges Lawmakers to Block Trial Lawyers Windfall Profit Bill

The Property Casualty Insurers Association of America is urging the Illinois House to reject an attempt by the trial bar to enable plaintiffs to receive compensatory damage awards based on the amount of medical expenses billed, rather than the charges actually paid.

SB 1911 passed in the Senate as a measure to help victims of domestic violence, however in the House an amendment has been proposed that would take away the protections for victims of abuse and supplant them with language that makes an “end-run” around sound, established liability law.

“With this amendment to SB 1911, the trial bar will be taking dollars out of the pockets of every consumer,” said Greg LaCost, assistant vice president, regional manager and senior counsel for PCI. “We strongly oppose this bill because it would enable lawyers to reap huge windfall profits based on the amount of a medical bill rather than the amount actually owed. Compensatory or economic damages are designed to reimburse an injured person for the expenses that they incur. This bill on the other hand would allow trial lawyers and their clients to collect more than what the injured party owed. This is not allowed anywhere in the United States and it should not be permitted here in Illinois. While an injured person can sue for non-economic damages such as pain and suffering, economic damages are limited to actual damages. The result of this amendment would be to drive up the cost of court awards and that would mean higher insurance premiums for everyone.”

Through negotiated billing agreements with medical providers, insurers generally pay less than the amount billed. However, this amendment presumes that the amount billed is the actual amount paid. If a case goes to trial, jurors are likely to be misled into believing that they must award higher damages than what was actually paid. In essence the trial lawyers are saying that if the medical bill was for $100 and the insurer and doctor agreed on a charge of $75, then the plaintiff and plaintiff attorney should get the $25 difference.

“This bill would significantly increase the cost of insurance and be an open invitation to fraud,” said LaCost. “The Illinois General Assembly enacted meaningful tort reform measures last year, and this bill is an effort by the trial bar to seek payback. However, the ramification of this bill is far broader than just medical liability reform. It thwarts the concept of due process by preventing the defendant from presenting any evidence of payments made or benefits provided to defend the claim. The bill opens the door for unscrupulous plaintiffs, attorneys and medical providers to commit outright fraud by inflating bills to get kickbacks from oversized damage awards,” said LaCost.

PCI identifies itself as a national trade association composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association. PCI members write over $184 billion in annual premium, 40.7 percent of the nation’s property/casualty insurance.

Source: Property Casualty Insurers Association of America

Topics Carriers Legislation Profit Loss Illinois