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"A collision with a semi-trailer truck seven years ago left 52-year-old Deborah Shank permanently brain-damaged and in a wheelchair. Her husband, Jim, and three sons found a small source of solace: a $700,000 accident settlement from the trucking company involved. After legal fees and other expenses, the remaining $417,000 was put in a special trust. It was to be used for Mrs. Shank's care. Instead, all of it is now slated to go to Mrs. Shank's former employer, Wal-Mart Stores, Inc. Two years ago, the retail giant's health plan sued the Shanks for the $470,000 it had spent on her medical care. A federal judge ruled last year in Wal-Mart's favor, backed by an appeals-court decision in August. Now, her family has to rely on Medicaid and Mrs. Shank's social-security payments to keep up her round-the-clock care." That's the introduction to a November 20, 2007 Wall Street Journal article that provides a great example with the problems of subrogation in personal injury claims. In recent years, employers and health insurance companies have become much more agressive in seeking reimbursement for medical expenses in personal injury litigation. Add in the fact that the Texas Supreme Court and the federal courts are interpreting subrogation provisions more broadly, and personal injury victims are often put in very precarious situations. As it stands now, in many cases, health insurance companies sit on the sidelines, let the personal injury victims go through the work and expense of pursuing a lawsuit, and then swoop in and try to take all the proceeds due the victim. This is an area that is ripe for some type of equitable reform. But that's probably holding out too much hope for Congress or the Texas legislature. For more on subrogation, you can view our previous posts here and here.
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