Attorney and Client Fees – Subject to Medical Aid Contribution

INTRODUCTION – YOU CANNOT ENRICH YOURSELF

Medical Aid ContributionThere is a principle in the common law called subrogation.

Subrogation in the context of a claim against the RAF (or any other third party) implies that your medical aid can require you to recover costs (medical expenses) on their behalf failing which you would have unjustly enriched yourself by receiving double compensation from the same health event (receiving paid health benefits from the medical aid and financial compensation from the RAF).

Subrogation ensures the long-term financial viability of a medical aid.

Most medical schemes require that if you become entitled to benefits due to a motor vehicle accident you must consider claiming from the RAF and also to inform your medical aid of the progress of any such claim (this is usually done by the appointed attorney who ensures that statements are updated on a regular basis and that the medical aid stays informed.

If you are a member of a medical aid your scheme has to pay for your treatment regardless of the outcome of the claim against the RAF or whether a claim has been lodged.

The member remains obligated to ensure that whatever is recovered from the RAF is paid back to the medical scheme (subject to the apportionment, if any).

CALCULATING FEES

Attorney and client fees only applies to the capital amount (amount of damages recovered) obtained by successful litigation.

Having regard to the above our fees are determined based upon the capital amount after the medical aid contribution has been deducted.

Example:

Capital Settlement amount: R 550 000.00 (includes R 50 000.00 medical contribution)
Less (Medical Aid contribution): R   50 000.00
Capital (less medical contribution): R 500 000.00
Less Attorney and Client fee: R 175 000.00
Sub Total: R 325 000.00
Plus Party and Party costs: R   55 000.00
Total owed to client: R 375 000.00 (75% of R 500 000.00)*

*nett value of settlement amount after deducting medical aid contribution.

It is of the utmost importance to ensure that when an offer of settlement is considered that the client also considers the fact that the medical contribution is paid towards the medical aid.

When a decision has to be made on an amount offered the client must apply the formula in the example given to ensure that he/she is still satisfied with the result.

CONCLUSION

The relationship between a member and a medical aid is based upon a contract and is binding on the parties involved.

As such if instructions are given to an attorney to recover damages from the RAF including a medical contribution the attorney is obligated in the interest of his/her client to ensure that the terms of the agreement are met.

Clients are encouraged to contact their medical aid should they require more information.

Gert Nel B.Proc LLB (UP)

Director at Gert Nel Incorporated, Attorneys