The Illinois Supreme Court changes the rules.

by keith on 04/04/11 at 1:21 pm

The Illinois Supreme Court recently changed the rules regarding how unpaid medical bills are handled in a lawsuit.  The Law in Illinois is that a medical provider (doctor, hospital, clinic etc…) has a lien, a legal claim, on the proceeds of a lawsuit for any unpaid medical bills.

Until very recently, the medical providers were required to pay their share of the costs of recovering those bills under what was called the “common fund doctrine.”  This legal concept said that if lawyers created a “common fund” like a settlement, it wouldn’t be fair to allow hospitals not to pay their fair share of the costs, attorneys fees and costs, of creating that fund.

In Wendling v. Southern Illinois Hospital Services (link is to the PDF of the decision), the Illinois Supreme Court concluded that the common fund doctrine did not apply to health care liens.  They stated that the lien was there to protect the debt owed to medical providers, and that the “Plaintiff was a debtor obligated to pay for the services rendered by the hospital out of any resources which might become available to him.”  Therefore, the creation of the settlement was “merely incidental to the primary purpose of obtaining compensation for plaintiff’s injuries.”  The court quoted the Appellate Court in Maynard v. Parker, 54 Ill.App.3d 141 (1977), “We cannot justify extending the common fund doctrine to require a mortgagee or a furniture store or any other creditor of a plaintiff to contribute to the fees of the plaintiff’s attorney if the funds recovered by litigation are used to satisfy the plaintiff’s obligations.”

So, the common fund doctrine no longer applies to health care liens created under 770 ILCS 23/1.  Tomorrow, we’ll discuss the impact this change will have on people who are injured.

38 Responses to “The Illinois Supreme Court changes the rules.”

  1. InnofInjups

    Jan 23rd, 2012

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