And Another Thing…

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Why I don’t trust big business or tort lawyers

Once you read this story, you will no doubt be appalled at Wal-Mart’s actions, and rightly so. However, take a moment and calculate how much the family won in the lawsuit and how much they actually collected after legal fees were paid. Yep, I love me some tort law.

The irony here is that Wal-Mart bills itself as a family-friendly organization. What’s more, they fund a scholarship program at my Alma mater, Harding University, that provides qualifying students from Latin America with a full-ride. I guess they are family-friendly for any family that doesn’t work for them. Typical.

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5 Responses

  1. rollerpimp says:

    I thought you would find that interesting.

  2. preacherman says:

    Wonderful thoughts brother.
    I love your blog so much.
    Keep up the great posts.
    I hope you have a blessed weekend brother!
    In Him,
    Kinney Mabry

  3. andy says:

    FYI — CNN was reporting that Wal-mart decided not to try and recover anything. Now, of course we don’t know if that was due to someone genuinely deciding it was wrong, or if it was just to avoid bad publicity.

  4. Pelagius says:

    I agree that it’s an awful situation and that Wal-Mart handled it poorly. In the ideal world, Wal-Mart would have set up a separate trust to make sure that this woman was taken care of, then gone after the trucking company themselves. Even though the company wasn’t obligated to do so, it would have been both compassionate and prudent from a public relations standpoint. Besides, I feel like Wal-Mart’s attorneys likely would have gotten more than $1 million from that trucking company. Still, I want to offer some perspective as to why the tort attorneys took such a massive chunk out of the payment and why Wal-Mart really needed to recover the $470,000 it had paid in insurance.

    In all likelihood, the family couldn’t afford hourly-rate attorneys to fight this battle, so their only option was to find lawyers who would work out a contingency agreement. These kinds of agreements secure huge percentages of any eventual award for the attorneys to offset the fact that they will get nothing at all if they lose. It’s a high-risk, high-reward situation, and it’s the only way that many low-income plaintiffs are able to have any hope at all of recovering for injuries they’ve suffered. It does suck in a lot of ways, but this kind of arrangement gives hope to a lot of disadvantaged plaintiffs.

    As far as Wal-Mart’s efforts to recover the insurance money they had expended on this woman’s behalf, the judgment awarded to the woman represented the total amount of damages to which the court felt she was entitled, including hospital bills, loss-of-consortium, pain-and-suffering, etc… But her family wasn’t paying those hospital bills–Wal-Mart was. That’s why the courts held that Wal-Mart did have a legal claim to what was left of the judgment. As Wal-Mart’s representatives pointed out, the insurance program they offer to their employees only works if the payments out of the combined insurance fund are kept to a minimum. Where medical expenses are not the result of disease or pure accidents, the company actually has a fiduciary duty (the highest possible legal obligation) to those buying the insurance to recover any money they can where a third-party (like the trucking company) is liable for reductions from the combined insurance fund. If they fail to recover that money, not only can they be sued by the others paying into the insurance fund, but they will also have to raise the premiums for all the insurance program’s participants. The company was in a very difficult position and, unfortunately, they missed their opportunity to handle it as positively as possible.

  5. odgie says:

    Pelagius,

    Thanks for kicking in with a legal perspective. Your points are informative and put the situation in a new light. Lawyers gotta eat, just like the rest of us; and I doubt that this case made them richer by any measure.

    [A note to other readers: Pelagius is no apologist for tort law; he works at a public interest law firm protecting your rights, so no hassling!]

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