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First District Delivers a Blow to Injury Victims

Dexter Evans
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In Wolf v. Toolie, 2014 IL App (1st) 132243, the First District Illinois Appellate Court has disavowed a recent case from another appellate district which allowed injury victims to recover a more equitable amount out of their personal injury judgments or settlements.  In Stanton v. Rea, 2012 IL App (5th) 110187, the Fifth District ruled that medical providers who perfected a lien on an injury victim’s case were only entitled to take their statutory share of an injured person’s settlement or judgment after accounting for the attorney’s fees and costs involved in litigation of the case.

The situation in Stanton involved a common issue in personal injury cases, when the total of all medical liens is more than 40% of a settlement/judgment.  Under such circumstances, the attorney’s fees are capped at 30% and the medical lienholders portion at 40% pursuant to the Illinois Health Care Services Lien Act.  The court in Stantonreasoned that the legislature clearly intended that an injured plaintiff recoup at least 30% out of a settlement/judgment based upon capping the attorney’s fees and medical liens at 70% in the aggregate.  However, in situations where the litigations costs were great, the injured plaintiff stood to walk away with almost nothing out of the settlement/judgment, let alone 30%.  Therefore, the court determined that the medical lienholders’ 40% portion should be calculated after reducing the settlement/judgment by the attorney’s fees and litigation costs.

In Wolf, the First District instead focused its decision on a plain reading of the Act which did not discuss subtracting attorney’s fees and costs before calculating the lienholders’ portion.  It is important to point out that a medical provider is not limited to recovering its “lien” amount from the injured plaintiff.  The provider can still come after the injured plaintiff for the balance left after its lien portion is paid and often does.  Conversely, a lawyer’s fee is capped at 30% and the lawyer cannot seek additional compensation no matter how much work the lawyer did to secure the settlement/judgment.

Up next is a likely appeal to the Illinois Supreme Court to rule upon the split amongst the districts and to fully and finally determine the legislative intent of the legislature in enacting the Illinois Health Care Services Lien Act.

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