The Mind of a Personal Injury Attorney

Someone near and dear to me was involved in an accident.  Nothing life threatening, thank goodness, but severe enough for her neighbor to recommend an “excellent attorney.”  As an aside, I do wonder which statement came first: that, or hopefully, “how are you feeling?”

Anyway, welcome to America’s litigious society.  I was asked to attend the initial consultation, you know, because I am an attorney and my nearest and dearest insisted I go — no problem.  It is this conversation from which I’ll now relate.

First, hands down to the personal injury attorney; he definitely knew his stuff.  After going through his colloquy of pre-trial procedures and primer on insurance companies, I got the feeling that starring down the barrel of his gun, the gun of which took the form of litigation, would give even the most deep-pocketed and prepared individual cause for concern.  Luckily, this individual had insurance.  But how does this relate to Asset Protection?

Tip #1: Get insurance.  In most cases, insurance shifts the burden to pay from the individual to the insurance company.  In other words, in pre-litigation and in the eyes of the personal injury attorney, the litigation gun is nearly always pointed at the most wealthy, quickest paying person involved: the insurance company.  But insurance does have its policy limits, in addition to the plethora of exceptions for coverage, and if the personal injury attorney feels he can get a money judgment against the individual, too, then you may find the hyperbolic gun pointed back at you.

The key word here is feel.  As the personal injury attorney explained during the consultation I attended, what is not covered by insurance may be recovered from the individual driver.  Remember, though, that personal injury attorneys usually work these cases on a contingency basis, only earning their portion of fees upon successful recovery by the plaintiff.

Therefore, in the mind of a personal injury attorney, the individual must have money upon which to collect to make filing a lawsuit against them worth it.  If no money, well, there can be no meaningful recovery.  As eloquently explained during the consultation, “you don’t want to be left with a judgment that’s not worth the paper it’s printed on.”

The Economic Analysis 

The personal injury attorney will thus engage in an economic analysis of the case.  One such analysis is as follows:

1. Will the amount of hours spent on the case justify the recovery?
2. If, in fact, there is a recovery, will it be possible to collect?

To sum things up, the personal injury attorney stated that an asset search of the individual driver would be necessary to avoid the quandary of the uncollectible judgment.  And in general, personal injury attorneys usually do conduct such assets searches, exploring business records and even, if so deserving, contracting the services of a private investigator.

Goals of Asset Protection

Asset protection planning will frustrate the personal injury attorney’s economic analysis of the case.

Legitimate asset protection, therefore, the latter of which can take many forms, will make recovery more difficult to achieve.  Consequently, this will have the effect of driving up the number of hours the attorney will have to spend on the case, thus increasing the likelihood that time spent will not justify the recovery (remember, attorneys work these cases on contingency).

The personal injury attorney will also be reluctant to entertain a case where collection is futile.  A good case against the defendant, meaning one that would translate into a quick settlement or surefire judgment, or one where the hours spent would most certainly justify the amount of recovery, doesn’t always mean there is a good case for collection.  After all, no attorney wants to be left with a worthless judgment that is all but impossible to collect on.

Thus, properly drafted asset protection plans frustrate the personal injury attorney’s economic analysis by leading them to the unenviable conclusion that winning will only amount to a pyrrhic victory.  Asset searches, too, may reveal attachable assets cooped up in asset protection structures that are difficult to dismantle, nipping the personal injury case in the bud before it even starts.

When done correctly, then, asset protection planning can promote settlement on terms favorable to the defendant or even avoid the case in its entirety.  Understanding the mind of the personal injury attorney should provide some insight into how this process works.