Chiropractor's office took all of our clients to collections

Hi there, I work for a small law firm that mainly does personal injury cases in CA. Recently a Chiropractor's office we had been doing business with for years took all of our clients to collections. The vast majority of these cases were dropped and no settlement was awarded. Previously we had an unwritten agreement with this office where if a case was dropped then they would not go after the clients for their services (we were also taking the loss as these cases are on a contingency), but they recently had a change of heart and went back on this agreement. On the cases that have settled we are offering the collections agency 15% of the settlement which is standard, but they are demanding the entire settlement.  Is there anything we can do to protect these clients now? Is there a specific code or law that states that the collections agency must accept any reasonable made in good faith to settle these cases? Thanks for your help 

"Previously we had an unwritten agreement with this office " Really? A lawyer did not get it in writing??

The problem is YOU have an agreement with the client - but that has no legal impact on the chiropractor or the collection company. In fact I bet the clients signed something promising to be responsible for the chiropractor's bill.

the clients signed a lien. It is common for almost every other doctors office we are dealing w/ to accept that if the case doesnt settle than no one gets paid. This doctors office also told the clients the same thing during treatment, but the clients never got it in writing

So.  Explain this to me because I just threw up in my mouth at my understanding at what you said:

This chiropractor works for a personal injury attorney?  And does this chiropractor go into court and testify to the person's injuries and treatment in a court of law?  And does he get paid only if the lawyer wins?  Just wondering if I understood that correctly.

Did the client ONLY sign a lien? Or did the client also sign something giving the dr the right to go after the client for payment? If it is ONLY a lien against funds from the lawsuit then I do not see any legal basis for them to collect.

Truffles4me:

This chiropractor works for a personal injury attorney?  And does this chiropractor go into court and testify to the person's injuries and treatment in a court of law?  And does he get paid only if the lawyer wins?  Just wondering if I understood that correctly.

You understood it 100% correctly. It's a common practice amongst attorneys and chiropractors.

As a claim rep I saw it 100s of times.

whitefang.yellowflash:

the clients signed a lien. It is common for almost every other doctors office we are dealing w/ to accept that if the case doesnt settle than no one gets paid. This doctors office also told the clients the same thing during treatment, but the clients never got it in writing

It was inevitable that such a corrupt arrangement would blow up eventually.

The chiropractor does not work for our office. The chiropractor treats the client for the injuries he/she sustains. If the case does not prevail then our office too is out in the lurch, but if we are able to settle then the chiropractors are paid for their services. I dont see where the corruption is, we are only looking to protect these people from collections and are getting absolutely no money for our efforts and the strain this is putting on our office.  

thank you everyone for your replies, even the self-righteous ones. I appreciate any help

whitefang.yellowflash:

 

The chiropractor does not work for our office. The chiropractor treats the client for the injuries he/she sustains. If the case does not prevail then our office too is out in the lurch, but if we are able to settle then the chiropractors are paid for their services. I dont see where the corruption is, we are only looking to protect these people from collections and are getting absolutely no money for our efforts and the strain this is putting on our office.  

 

So, what happens if the client wins the case?  Is the chiropractor paid what would be considered a "usual" fee for his/her services?  And does he testify in court to the patient's injuries/recovery etc??  If so then he has quite the incentive to take your patients and testify in court.  Ambulance chaser comes to mind.  I have a feeling your office is getting exactly what it deserves.  It's called Karma.

You keep mentioning testifying for us in court, but these are simple personal injury cases that dont go to trial. Too much law and order for you lol. The doctors compile a medical report used to determine the settlement amount and are paid for their treatment from the settlement. 

It's not corrupt. Distasteful perhaps but quite legal.

It's no different than a lawyer accepting the case on contingency. The client gets the treatment they need and might otherwise not be able to afford. The lawyer and the chiropractor take a risk on the outcome.

Their is no "usual fee" as you mentioned and all medical bills for treatment are negotiable, according to california code. The settlement amount should cover the client for any damages he sustained including medical bills. It is unreasonable for a client to have to pay money out of his own pocket for an accident that was not his fault. 

Thank you LynnM, all of these cases are contingency cases.