Reviews and Cases of Note

By Ireland, Thomas R. | Journal of Legal Economics, March 2008 | Go to article overview

Reviews and Cases of Note


Ireland, Thomas R., Journal of Legal Economics


Special Editors: Lane Hudgins, Thomas Ireland, and Gerald Martin

This will be the first in a series of features on "Reviews and Cases of Note" in the Journal of Legal Economics that will focus on reviews of legal decisions, case studies and articles of interest to forensic economics that may have appeared in media that forensic economists do not typically read. The papers will not present original research in the sense usually required for double-blind editorial review. It must be written well enough to satisfy members of the editorial board of the journal, but reviews of this kind should not be claimed as "peer reviewed publications." Lane Hudgins, Tom Ireland and Jerry Martin will serve as editors for this section, but other editorial board members may also be asked to comment on submissions. One of the objectives of this section is to assist writers in getting their reviews into publishable condition. Reviews should be short, but we will try to work with persons submitting reviews to get their reviews into publishable form to a degree that would not be appropriate with double blind editorial review. If you want to submit reviews for future issues, send drafts or suggestions to Tom Ireland at ireland@umsl.edu. Regular submission fees will not be charged. When legal cases are described, as in this first review, it should be understood that the author or authors are not legal experts and the descriptions provided should not be assumed to be authoritative or "good law" without consultation with a qualified legal expert.

The Concept of Reasonable Value in Recovery of Medical Expenses in Personal Injury Torts*

In a recent Arizona case, I was asked by George Crough, an attorney for the State of Arizona, to look into an issue I had not previously confronted, but which I subsequently discovered has been the source of litigation throughout the United States. The issue George Crough wanted me to consider and address was the determination of the reasonable value of past medical expenses of an injured plaintiff. This was a damages element I had always taken for granted. In all of my previous cases, I was told by my retaining attorney what amount of past medical expenses the plaintiff had incurred. Typically, I did not (and still do not) mention this issue in most of my reports of economic damages caused by an injury to a plaintiff. I had always thought that past damages were whatever they were and that an economist, as an economist, added no value by adding up those expenses. In this case, however, the issue was more complicated. I discovered that the issue was so complicated that case law in how to deal with it varies significantly from state to state and that some states have passed legislation dictating how that issue should be handled. I have thus far found and described 20 legal decisions that provide the substance readers may wish to consider if confronted with that issue.

The issue can best be illustrated with an example based on assumed facts. Assume that an automobile accident has caused a personal injury that resulted in a plaintiff spending several months in a hospital. The plaintiff's bills for treatment by medical doctors, tests, surgical interventions and hospitalization totaled $500,000. The plaintiff however had good medical insurance and those bills were paid for by the plaintiff's insurance. Assume that the obligations of the plaintiff have been completely covered so that the insurance company has no right to claim any portion of the plaintiff's award if the plaintiff wins a tort recovery that includes his medical expenses. (This means that there is no right of subrogation. See the definitions that follow this introduction to relevant legal decisions.) The plaintiff has had no outof- pocket expense and will have no future out-of-pocket expense for past medical treatments, regardless of the size of the award the plaintiff wins in tort litigation. However, the actual amount paid for the plaintiff's medical bills by the plaintiff's third party insurer was $100,000. …

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