Scott M. Kuboff, Esq.
Northeast Ohio Trial Attorney

Understanding Your Rights

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Posts tagged Personal Injury
Drive Safe This Holiday Season

“It’s not you that I worry about,” said my mom when I received my driver’s license, “it’s the other drivers that concern me.”   She is right.  To a great extent, every time we get behind the wheel of a car we are putting our safety (and lives) in the hands of thousands of other people we encounter driving on Ohio’s roadways.  Even the most cautious and careful driver can fall victim to someone else’s carelessness.  

As the holiday season is upon us, many of us will be traveling to spend time with friends and family throughout the country.  According to the Ohio Department of Public Safety, there were 36,392 motor vehicle accidents in the months of November and December last year; the majority of which – 29,678 – was in December.   And for 11,578 people, an accident resulted in some type of injury. 

So, what can we do to protect ourselves this holiday season? Simple, control what you can and, hopefully, others will too:

  1. Don’t drink and drive
  2. Don’t text and drive
  3. Don’t drive if you’re tired
  4. Maintain appropriate speeds and distances in inclement weather
  5. Report unsafe driving
  6. Wear your seat belt

Enjoy your holidays and I wish you safe travel!  

If you have been injured by the negligence of another, contact me for a no cost, no obligation consultation and case evaluation; I will fight for you. 

“Profit Over People” Prevails Again

             Unfortunately, in Simpkins v. Grace Brethren Church of Delaware, 2016-Ohio-8118 the principle of “profit over people” prevailed yet again.   If there was ever a set of facts to declare as unconstitutional the non-economic damages caps of R.C. 2315.18, this was the case. 

              In Simpkins, the plaintiff brought a lawsuit against a church for its pastor’s actions in forcing oral and vaginal intercourse with her who, at the time of being raped, was 15 years old.   The jury found that the plaintiff was entitled to $3,651,378.85 in compensatory damages, which included the following: $1,378.85 for past economic damages, $150,000 for future economic damages, $1,500,000 for past non-economic damages, and $2,000,000 for future non-economic damages.   

              The trial court, in applying R.C. 2315.18(B)(2), reduced the plaintiff’s non-economic damages from $3.5 million to $350,000 and, accordingly, entered a judgment in plaintiff’s favor for $500,000; which is $3.1 million dollars less than a jury of her peers awarded her.  So why did the court do that?

              As Ohio Supreme Court noted in it’s decision in Simpkins, “[t]he General Assembly enacted R.C. 2315.18 as part of a broader tort-reform bill . . . effective April 7, 2005.  In support of those reforms, the General Assembly recognized the state’s interest in ‘a fair, predictable system of civil justice’ that preserves the rights of injured parties while curbing frivolous lawsuits, which increase the costs of doing business, threaten Ohio jobs, drive up consumer costs, and may hinder innovation.”   In other words, the General Assembly was more interested in protecting corporate interests than those harmed by them; which in Simpkins, means a child rape victim is just too much of a drain on the economy to merit a full-value award as decided by a jury of her peers. 

              Revised Code 2315.18(B)(1) does not place a cap on economic damages; meaning out-of-pocket expenses such as medical bills, loss of wages, or other expenses incurred as a result of the injury.   In Simpkins, the plaintiff’s economic damages were $1,378.85 (the jury also awarded $150,000 for future economic damages).   This is not necessarily unexpected as a rape victim’s economic injuries pale in comparison to the non-economic harm.    Revised Code 2315.18(A)(4) states non-economic harm includes “pain and suffering, loss of society, consortium, companionship, care, assistance, attention, protection, advice, guidance, counsel, instruction, training, or education, disfigurement, mental anguish, and any other intangible loss.”

              Unfortunately for the plaintiff in Simpkins, R.C. 2315.18(B)(2) caps non-economic damages that can be recovered at the greater of $250,000 or an amount that is three times the economic loss to a maximum of $350,000.   Sounds confusing, right?   If the jury only found $1,378.85 in economic loss, the plaintiff’s recovery would only be $251,378.85.   This is because 3x the economic loss = $4,136.55; so the $250,000 dollar cap would apply.  However, the jury also found $150,000 in future economic damages.  With this in mind, 3x economic damages = $454,136.55.   As that amount exceeds the $350,000 maximum, the trial court reduced the non-economic damages accordingly. 

              As you can imagine, the plaintiff in Simpkins appealed the substantial reduction of her award claiming the damage caps, as applied to her, were unconstitutional.   Quite literally, the Court found “[w]e do not consider here whether there may exist any set of facts under which application of the statutory damage caps would prove unconstitutional. We conclude only that R.C. 2315.18(B) is constitutional as applied to the facts before us . . . .”  In doing so, the Ohio Supreme Court upheld this outrageous outcome. 

              Think about this for a second: in Ohio, we empower jurors to determine whether or not an individual’s life is worth condemning for their crimes yet we do not trust them to determine the full-value of a person’s injuries.   Of course, this is because the General Assembly was more concerned about the costs of doing business, jobs, consumer costs, and innovations; and not protecting people who are harmed by wrongful and negligent conduct.

              This was not lost on Justice O’Neill, as he stated in his dissent: “[t]his child was raped in a church office by a minister, and a duly empaneled jury established an appropriate level of compensation for the loss of her childhood innocence. We have no right to interfere with that process. Shame on the General Assembly. The children are watching. And I for one do not like what they are seeing.”  

              Nor was it lost on Justice Pfeifer: “’[t]ort reform,’ however misguided and unconstitutional, was designed to protect doctors and corporate interests. . . . Today, we learn that ‘tort reform,’ not surprisingly, had unintended consequences. It turns out that ‘tort reform’ (and the justices who sanctioned it) also ensured that rapists and those who enable them will not have to pay the full measure of the damages they cause—even if they rape a child. It is past time for the General Assembly (and this court) to reconsider ‘tort reform’ and return the authority to determine damages to juries, where it rightfully and constitutionally belongs.”

            If you think this is an unjust result, contact your senator and representative and demand change.

            If you have been injured by the wrongful acts or negligence of another, contact me for a no cost, no obligation consultation and case evaluation; I will fight for you. 

Lawsuit Funding: A Horrible Idea

Personal injury and medical malpractice claims are advanced to help an individual who has been wronged or injured by the negligence or carelessness of another person to be compensated for their injuries.   That being said, personal injury and medical malpractice claims do not come with a blank check.   Liability is often disputed and can be difficult for a plaintiff to establish.   In fact, according to the most recent report from the Ohio Department of Insurance, roughly 75% of medical malpractice claims are resolved in favor of the doctors and hospitals.    

With statistics like this in mind, it easy to understand the allure of lawsuit funding: guaranteed money up-front and a promise that you can still recover money from pursing a lawsuit without any risk or obligation to repay the money back if you lose.   I guess that – not having to repay the advance if you lose – is what differentiates lawsuit funding from a loan from Bobby Baccalieri of The Sopranos.   However, make no bones about it: lawsuit funding is a horrible idea. 

In 2003, the Ohio Supreme Court in Rancman v. Interim Settlement Funding Corp., 99 Ohio St.3d 121, 2003-Ohio-2721 stopped short of calling lawsuit funding predatory but, nonetheless, made lawsuit funding illegal in the State of Ohio as it violated the doctrines of “Champerty” and “Maintenance.”   As the Rancman court explained maintenance “is assistance to a litigant in pursuing or defending a lawsuit provided by someone who does not have a bona fide interest in the case” and champerty “is a form of maintenance in which a nonparty undertakes to further another’s interest in a suit in exchange for a part of the litigated matter if a favorable result ensues.”   The Rancman court recognized that “the law of Ohio will tolerate no lien in or out of the [legal] profession, as a general rule, which will prevent litigants from compromising, or settling their controversies, or which, in its tendencies, encourages, promotes, or extends litigation.”  In finding lawsuit funding illegal, the Rancman court noted that it creates a disincentive for litigants to settle their case.    More on that in a little bit.

In response to Rancman and apparently a national clamoring for lawsuit funding – although I’m not sure who was calling for action outside the lawsuit funding industry – in 2008 the Ohio General Assembly enacted R.C. § 1349.55 thereby making lawsuit funding legal in Ohio.  As it stands, Rancman has been effectively overturned by the legislature but the Rancman facts and reasoning are still of some value as it illustrates how lawsuit funding agreements work.

In Rancman, the lawsuit funding company advanced $6,000.00.    The terms of the agreement provided that if the case settled within 12 months, the company was entitled to the first $16,800 due to plaintiff.    If it settled within 18 months: $22,200.  If it resolved within 24 months: $27,600.    Although the Rancman facts do not state what the amount would be if it settled after 24 months, it is reasonable to assume it would increase by a sum of $5,400 every 6 months.  While every agreement is unique, the numbers in Rancman are par for the course.    Let’s look at it this way:

Time Period                   Amount            Advance       Profit             % Return

1 to 365 days:                 $16,800              $6,000       $10,800          180%

12 to 18 months:             $22,200              $6,000       $16,200          270%

18 to 24 months             $27,600              $6,000       $21,600          360%

No one would think that a $6,000 loan which would be repaid at 180% interest, let alone 360%, is a wise or sound decision.   Yet lawsuit funding companies tell plaintiffs that it’s not a loan as nothing needs to be repaid if they do not recover.    Despite this, accepting lawsuit funding is not a wise decision.

Cases take time to investigate, litigate, and resolve.   Some cases require 1 to 2 years of work before they are even filed with a court.    Once in court, it can be another 2 years before the case settles or goes to trial.   Even if you are fortunate and your case is resolved shortly after you receive lawsuit funding, it still has a significant impact on your net recovery.  And the longer the case takes to resolve, the less likely settlement becomes.    Here is an illustration:   

First, let’s assume the attorney’s fee is 33.33% which is typical for pre-suit representation.    Next, let’s assume there is $250 in case costs which is typical for obtaining medical records.   Then, let’s assume your medical insurance paid $5,000 for your treatment which you are required to repay if you receive compensation.    Now, let’s assume you accept a $6,000 advance from a lawsuit funding company.   Finally, let’s assume that the maximum that the insurance company is willing to pay (or a jury will award) is $50,000.   Here’s a comparison:

                                With Advance       Without Advance

Settlement              $50,000.00          $50,000.00

Attorney Fees         $16,665.00            $16,665.00

Case Costs              $250.00                $250.00

Insurance Lien        $5,000.00             $5,000.00

Advance Lien          $16,800.00                    

CLIENT                    $11,285.00              $28,085.00

 

This would be true if the case settled 1 day after you received funding up to 1 year after.    However, what happens if the case has to be filed?   Now the attorney’s fee may increase to 40% and the case expenses (filing fee, deposition costs, experts, etc.) will naturally go up.    

Here is a look at what the breakdown is assuming the case resolves within 18 months: 

                                With Advance       Without Advance

Settlement              $50,000.00          $50,000.00

Attorney Fees         $20,000.00          $20,000.00

Case Costs              $2,500.00             $2,500.00

Insurance Lien        $5,000.00             $5,000.00

Advance Lien          $22,200.00                    

CLIENT                    $300.00               $22,500.00

As you can see, the advance from a lawsuit funding company creates a disincentive for settlement; a concern raised by the Rancman court.    As you can imagine, this disincentive only grows stronger the longer litigation takes.    To further illustrate my point, and using the number above, for a plaintiff with an advance to net the same amount as the plaintiff without the advance, the settlement would have to be $87,500; which the insurance company isn’t’ willing to pay.   So it goes to trial, which takes time and time increases the repayment of the advance.  Of course, if the insurance company is willing to pay $87,500, the plaintiff who did not accept lawsuit funding receives $45,000; not $22,500.

In fairness to lawsuit funding companies, they will tell you that accepting funding is and should be a “last resort.”   If you’re considering accepting an advance, seriously consider and weigh the long-term consequences of your short-term need and discuss it more fully with your attorney.    Certainly, I counsel my clients against accepting such funding.  

If you have been injured by the negligence of another, contact Scott for a no cost, no obligation consultation and case evaluation.