Ethics Hotline & Opinions

ETHICS DOCKET NO. 2002-02

MARYLAND STATE BAR ASSOCIATION, INC.

COMMITTEE ON ETHICS

ETHICS DOCKET NO. 2002-02

Additional retainer agreement regarding reduction of personal injury plaintiff’s medical bills

 

Your inquiry states that in light of the Committee's opinion in Docket 01-01 whether there are ethical concerns created by five proposed practices:

  1. In an initial personal injury retainer agreement, it is specified that the attorney is not required to negotiate the reduction of medical bills.
  2. After resolution of the claim against the tortfeasor, the attorney accepts another retainer with the client to attempt to reduce the medical bills.
  3. The retainer is based on a contingency basis, rather than hourly fee, with the attorney retaining as a fee a percentage of the reduction.
  4. The medical bills include those of providers which have received an assignment, signed by the client and acknowledged by the attorney, protecting the provider's bills from the proceeds of recovery.
  5. The attorney is retained to negotiate a medical bill reduction when the client is eligible for, or has received, first party insurance benefits for a bill.

All these five proposed practices appear crafted to permit lawyers to charge additional fees in personal injury representation where the client has subrogation obligations to health care providers. Initially, it is the opinion of this Committee that these five proposals were formulated in an attempt to circumvent this Committee's advisory opinion docket 01-01. That opinion centrally stated:

"In the opinion of this Committee, absent extraordinary circumstances
involving the client's relation tot he health care provider or insurer subrogee,
an initial contingency retainer for personal injury representation which
includes an additional separate contingency fee of one half (½) the reduction
of clients' obligations to a health care provider or an insurer subrogee is
unethical…"

This Committee has reviewed its opinion in docket 01-01 and finds that advisory opinion and the supporting reasons for that opinion are proper. The Committee has also reviewed the arguments supporting your five proposals and the materials attached to your inquiry. However, it is not the practice of this Committee to debate its advisory opinions. Neither will this Committee engage in examining possible nuances to approve a practice which it generally finds improper.

Additionally, one of the premises of your arguments states: "…attorneys routinely collect a fee for the handling of PIP…" That statement is simply incorrect and this Committee has consistently advised otherwise. Previous opinions of this Committee on that point are cited in Docket 01-01, also, see Docket 77-04.

 

DISCLAIMER: Opinions of the Maryland State Bar Association (MSBA) Ethics Committee are an uncompensated service of the MSBA. This Committee’s opinions are not binding on the Maryland Court of Appeals, Maryland Attorney Grievance Commission, MSBA or this Committee. The reader is advised that subsequent judicial opinions, revisions to the rules of professional conduct, and future opinions of this Committee may render the Opinions stated herein outdated. As such, the Committee’s opinions are advisory only and neither the Committee nor the MSBA assumes any liability whatsoever with respect thereto. Accordingly, reliance upon the opinions of this Committee is solely at the risk of the user.