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Tort Reform, and How It Hurts Us

KY_State_CapitolRumor has it that tort reform will be on the legislative agenda in Kentucky in 2016, based on leaks from Matt Bevin’s transition team meetings. Tort reform is great for insurance companies, but hurts average state citizens. To get an idea of how much it can hurt an average citizen, Lawrence & Associates is going to share a current case study (with the identifying data removed or rounded) that compares how an injured person can be compensated in Ohio for medical bills, and in Kentucky for the same medical bills.

Lawrence & Associates’ Client, His Injuries, and His Medical Bills

Our client, Mr. W, was injured while driving his car. He had a leg amputated and a hip fractured, and had extensive therapy so he could re-learn how to walk. After a thorough police investigation, the other driver was found to be at fault. Fortunately, the other driver had excellent automobile insurance, with policy limits high enough to cover all of Mr. W’s medical bills.

Mr. W has over $850,000.00 in medical bills. He had health insurance that paid about $100,000.00 of the medical bills, leaving the other $750,000.00 to be written off. In Ohio, they have enacted tort reform. As part of that tort reform, Ohio’s case law Robinson v. Bates states that the automobile insurance policy for the at-fault driver only has to pay the $100,000.00 that was paid by the health insurance company. In Kentucky, there is no tort reform. Kentucky’s case, Baptist Healthcare v. Miller, says that the at-fault driver has to pay the full $850,000.00 in medical bills. (Bear in mind that, in any event, there is enough insurance coverage to pay all the medical bills, so the driver himself would not be on the hook for hundreds of thousands of dollars). What happens to the $750,000.00 when you cross the border from Kentucky to Ohio is the essence of tort reform.

Who Profits from Tort Reform?

How can two neighboring states reach such totally different positions on such a simple issue? It would seem obvious that the medical bills should be paid by the insurance policy. That is, after all, why we have insurance. However, years of lobbying dollars by insurance companies has muddled that logic and created a huge windfall for these multi-billion dollar businesses.

Kentucky adheres to the “common law,” developed over the centuries from the founding of America, while Ohio uses statutes passed within the last decade. In Kentucky, the logic of the common law is that someone that does something wrong should have to pay to fix what they did wrong. Thus, someone that causes $850,000.00 in medical bills should have to pay the full amount. If the injured person has health insurance that takes care of the medical bills, then the injured person gets the benefit of both policies. If there is a windfall, then Kentucky says Mr. W should get the windfall as part of his compensation for losing his leg.

Ohio’s statutes, on the other hand, were passed with the goal of limiting anyone’s right to recover in court, and most especially seriously injured people like Mr. W. Ohio says that the person who did something wrong only has to pay for that wrong to the extent that the injured person has to re-pay his or her insurance company to cover the bill. So if Mr. W’s insurance policy covers $100,000.00 and Mr. W has to pay that back, then automobile insurance company for the person who hurt Mr. W only has to pay $100,000.00. In Ohio, the windfall goes to the insurance company that has cleverly avoided paying $750,000.00 in damages.

Is Tort Reform Right for Kentucky?

All of us who drive on the road have the potential to be Mr. W. That is an ugly fact, but a true one, so we all must ask ourselves whether Kentucky or Ohio is right. When one person hurts another person, does the first person have the duty to pay the second person for the full amount of the damages? Put another way, should the other driver’s automobile insurance company have paid for all the medical bills Mr. W received when he lost his leg? Tort reform says no, that the car insurance company should keep the money. At Lawrence & Associates, we respectfully suggest that everyone in Kentucky should call their state legislator and express serious concern about Mr. W’s case happening again and again, right here in Kentucky.

If you have been involved in an accident, please contact us. We’ve helped thousands of people recover for their injuries, and our testimonials reflect the quality of our work. We are working hard for the working class, and we want to work for you. Call today!