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62 B.C. L. Rev. 2619 (2021)
A Common Conflict: Common Fund Doctrine and Medical Provider Liens in Tort Settlements

handle is hein.journals/bclr62 and id is 2658 raw text is: A COMMON CONFLICT: COMMON FUND DOCTRINE AND MEDICAL PROVIDER LIENS IN TORT SETTLEMENTS Abstract: Plaintiffs in negligent tort actions often recover less money than they need to resolve all of their accident-related debts due to the insufficient availabil- ity of liability insurance proceeds. Two significant debts common to these tort ac- tions are liens for medical treatment of injuries that plaintiffs sustain and the at- torney's fees plaintiffs incur in pursuing liable insurance companies. The law places plaintiffs' attorneys and medical lienholders in an inherently adversarial position. Medical lien statutes frequently grant attorney's fees first priority to set- tlement proceeds but also do not require medical lienholders to reduce their claims, even if available insurance funds are insufficient to pay all the plaintiff's debts. To resolve this impasse, plaintiffs' attorneys often petition courts to apply the Common Fund Doctrine (Doctrine), an equity principle derived primarily from class action litigation, to force medical lienholders to reduce their claims to pay a proportionate share of plaintiffs' attorney's fees. This Note argues that such an application is an inappropriate expansion of the Doctrine and provides enor- mous leverage to plaintiffs and their attorneys. Applying the Doctrine in this way exacerbates the impact of existing limitations on the recovery of medical debts through statutory liens and provides immense incentive for plaintiffs to hire legal counsel, even when it is unnecessary. This Note also argues that citing fairness or equity as a policy justification for the use of the Doctrine in these situations is in- trinsically hypocritical, as such use of the Doctrine results in inequitable out- comes for medical lienholders. Finally, this Note contends that the Bankruptcy Code provides a strong, federal correlative for the handling of attorney's fees in settlement proceedings with insufficient funds and suggests that medical lienholders and personal injury attorneys should lobby to increase minimum in- surance limits to reduce the frequency of insolvent settlements. INTRODUCTION Friends Peter, Michael, and Samir are having a quiet conversation at work when their coworker, Drew, approaches them.' Drew informs the group that another colleague, Tom, was recently in a serious car accident.2 A drunk driver collided with Tom's vehicle at a high rate of speed as Tom backed out of his 1 OFFICE SPACE (20th Century Fox 1999). 2 Id. 2619

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