When Can the Patients Attorney Pay the Patients Bill Treatment Purposes vs. Medical Legal Purposes
By Richard H. Adler
September 13, 1996
A question common to both patient and health care provider is whether an attorney can be expected to pay for the treatment expenses of a client pending the resolution of a personal injury claim. The virtually universal answer is that the attorney may not, and should not, pay the health care treatment expenses of the client, but may advance costs for items such as records, reports, and the provider’s time to prepare for and deliver testimony.
Attorneys practicing in Washington State are specifically prohibited by the Rules of Professional Conduct from ” . . . advance[ing] or guarantee[ing] financial assistance to his or her client . . . ” Financial assistance includes the payment of the client’s treatment bills. The Rules of Professional Conduct are the rules which guide attorneys in their law practice behavior and mandate minimum standards of conduct.
The rule barring attorneys from providing financial assistance is but one of a number of rules and guidelines designed to prevent lawyers from having or creating a conflict of interest with their clients. Attorneys are charged with concerning themselves first and foremost with the legitimate and practical interests of their clients. A “conflict of interest” is a factual circumstance wherein the loyalties and interests of the attorney do, or may, take precedence over those of his or her client. The law has always considered potential conflict between client and attorney to be an untenable situation, which can only be resolved by elimination of the subject matter of the conflict and/or the termination of the attorney-client relationship.
If an attorney pays for a client’s treatment bill, a conflict of interest for the lawyer is presumed to arise. This is because the attorney has created a circumstance where he/she has a personal economic interest in the outcome of the case, which in part was created by the hope for repayment of advances made solely for the benefit of the client. This conflicts with the lawyer’s primary duties to take direction solely from the client and make important decisions in the legal representation of the client based upon independent and informed judgment.
The Washington State Bar Association and the Washington Supreme Court continue to enforce the prohibition against this conflict of interest. In effect the line has been drawn at the point of payment of fees and expenses which are not related to the costs of the litigation. This kind of “investment” in the case oversteps the bounds of a healthy interest in the client’s case. Having determined that the attorney’s judgment on the client’s behalf cannot be in conflict with his own interests in the case, and that the attorney should not have that much control over the client’s claim or health care, payment of treatment expenses is not allowed.
However, charges of the physician which are solely related to the preparation and prosecution of the client’s personal injury claim (treatment records, consultation fees, charges for testimony time, and time and diagnostic tests related to evaluation as opposed to on-going treatment), are costs “associated with litigation.” When such services are requested by the attorney, the costs are the primary legal responsibility of the attorney, who is then obligated to pay them in accordance with the terms agreed upon.
Once the personal injury case is resolved, it is the practice of competent attorneys to completely pay all outstanding bills to treatment providers from the proceeds of the settlement. The motivations for doing so are several-fold. First, there is an ethical and contractual obligation to pay those providers who have given treatment to the client in the good faith belief that they will be paid for their services. Second, the provider may have properly completed and filed a “statutory lien,” therefore obligating the attorney to pay the outstanding bills of the client related to the case. Last but not least, it promotes harmony and cooperation between the professions, ultimately benefitting all personal injury plaintiffs who so greatly depend upon the competence, good will, and cooperation of their physicians in the prosecution of their claims.