In-House Counsel

A shameful way to turn your law department into a profit center

By Rees Morrison

An employee, hit by a truck and brain damaged such that she requires full-time nursing, recovered $417,000 from the trucker?s company, which funds a court put in a trust to pay for her medical care. The law department of the employee?s company succeeded in getting another court to order her family to reimburse the company $470,000 it spent on her medical care. According to the NY Times Book Rev., May 25, 2008 at 14, ?the court?s ruling cited a clause in the company?s health plan that gave it the right to recoup medical expenses if an injured employee collected damage payments in a lawsuit.? Thus, the law department enforced a subrogation right.

The reviewer notes that ?Until recently, companies rarely filed subrogation suits in such cases. These suits are now widespread.?

If law departments assert subrogation rights with the effect described, and then crow about amounts they recover and proclaim themselves ?profit centers,? they should be ashamed (See my post of April 27, 200: 18 references to law departments as profit centers.).

Full post as published by Law Department Management on June 04, 2008 (boomark / email).