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August 16th, 2011

‘Phantom Damages’ Case Pending in California Will Influence State’s ‘Hellhole’ Reputation

The Judicial Hellholes report has addressed the costly injustice of so-called “phantom damages” before, and went so far as to cite a related trial lawyer-enriching 4-3 Colorado Supreme Court decision among its 2010/2011 Dishonorable Mentions.

Now, California’s high court is expected to render its decision in a similar case, Howell v. Hamilton Meats & Provisions, argued this past May.  The Sacramento Bee‘s Dan Walters succinctly assesses the importance of this pending decision in his latest column.

“The issue is whether someone who suffers injuries in an auto collision or other incident is entitled to collect the full amount of the medical bills issued by doctors, hospitals and other care providers,” writes Walters, “or is limited to the amount actually paid by insurers for that treatment – often a fraction of the supposed bill.

“How big is Howell?” asks Walters.  “The insurance industry has declared that requiring compensation for full medical bills, rather than negotiated payoffs, could cost them a whopping $3 billion a year and generally, plaintiffs’ lawyers would receive a third of that amount.”

* * *

UPDATE!!!  We’re pleasantly surprised to report that the high court ruled for common sense in a nearly unanimous 6-1 decision on Aug 18.  The majority wrote:

“In that circumstance, may the injured person recover from the tortfeasor, as economic damages for past medical expenses, the undiscounted sum stated in the provider’s bill but never paid by or on behalf of the injured person? We hold no such recovery is allowed, for the simple reason that the injured plaintiff did not suffer any economic loss in that amount.”

So, who knows?  Maybe, just maybe, it’s still possible for California to shake its reputation as a Judicial Hellhole.  It may take a while, but if the high court continues to rule for consumers and against parasitic personal injury lawyers, anything can happen.  

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