One of the intriguing things about the practice of law is the element of surprise it can provide. Even after more than 20 years of practice, there are days when you learn something you not only did not know but had no idea the concept even existed.  

Now, such surprises, while interesting, often spark a bad case of STD (no, not that STD), but the one we've all had -- Self Total Doubt.  

You know the primary symptom -- a burning-sensation running through your head asking yourself:  "Shouldn't I have known that already?"

This year ended with such a surprise for me -- a little secret in the law known as "Letters of Protection." (After this blog, you can decide wether I should have added "dirty" to "little secret." Many commentators resoundingly would say, "Yes!").  I surveyed my defense attorney colleagues, and even some plaintiffs' lawyers, and few, if any, had ever heard of Letters of Protection either.  

So, with my burning symptoms of Self Total Doubt somewhat eased by good company, I'll fill you in on the secret life of Letters of Protection.

Letters of Protection are legally enforceable agreements entered between a personal injury plaintiff's lawyer and a treating doctor for the plaintiff regarding payment for the doctor's services. The lawyer agrees to pay the doctor from any settlement or recovery on behalf of the plaintiff in exchange for something from the doctor, usually delaying collection efforts on the monies the patient/plaintiff owes the doctor.

The normal scenario goes like this: Bill collectors for the doctor hound the plaintiff. Plaintiff calls his lawyer and says, "These bill collectors are killing me. Is there anything you can do?"  

Plaintiff's lawyer then contacts doctor and says, "Call off the bill-collecting dogs, saw bones. I'll give you a letter of protection that will require me to pay you from any settlement or recovery for your patient. If there is no recovery, then patient still owes you."  

That last sentence is the key to the ethical propriety of such an agreement. The patient/plaintiff must remain responsible for the payment if there is no recovery. Otherwise, the agreement runs afoul of the payment-of-witnesses rules and potentially the ethical prohibition against compensating an expert witness based on a contingent fee.

The doctor, while somewhat protected by a medical lien that applies to the patient/plaintiff's recovery, now has a legally enforceable contract with the plaintiffs' lawyer that puts him or her ahead of the other lien holders and potentially nets the doctor more upon settlement. That is because the lawyer is legally bound to pay the doctor out of recovery, usually at a set rate, not just the plaintiff/patient.

When Letters of Protection go wild, however, problems spark that can result in unethical contingent fee agreements with the doctor, the barring of the doctor's testimony, the disqualification of the attorney and ethics complaints for both the doctor and lawyer.

For instance, as happened in our scenario this year, let's say the doctor enters the agreement with plaintiff's lawyer before doing the medical procedures. In other words, the doctor only agrees to do the medical procedures on the plaintiff (for which plaintiff is seeking recovery in the lawsuit) if the plaintiff's attorney first agrees to pay for it from any settlement.  

Then, not surprisingly, the doctor testifies in the case that the procedure was medically necessary, its need was caused by the incident at issue, and that the charges were reasonable. The doctor, however, has a financial interest in the plaintiff's recovery, arguably clouding his or her objectivity, and at a minimum, providing fertile ground for cross examination.  

Rule 3.4(b) of the Model Rules provides that a lawyer shall not "counsel or assist a witness to testify falsely, or offer an inducement to a witness that is prohibited by law." Guidance on the meaning of this rule is contained in the comments section, which states: “[I]t is not improper to pay a witness's expenses or to compensate an expert witness on terms permitted by law.

The common law rule in most jurisdictions is that it is improper to pay an occurrence witness any fee for testifying and that it is improper to pay an expert witness a contingent fee.” Model Rule 3.4 Comment.  

Medical commentators have also piped up with concerns about these agreements: "There is no doubt that when a practitioner is dependent upon an LOP producing remuneration, a financial motive may impact on the objectivity of the services and there is a conflict of interest, the shibboleth of unethical conduct." See Woody, R. H. (2011). Letters of protection: Ethical and legal financial considerations. Journal of Forensic Psychology Practice. 11(4), 361- 367. 

And our scenario this year took it one step further -- the doctor's office manager testified that the doctor would only be paid if there were a recovery for the plaintiff. In other words, it was a contingent-fee agreement with a surgeon entered before the surgeon did the surgery for which plaintiff is seeking recovery in the case.

And, to make matters more interesting and surprising, the doctor charged $450,000 for the one surgery! The Letter of Protection Agreement, however, provided that the doctor would be paid at the "prevailing insurance rate" from any recovery. That amount? About $41,000 -- 1/10 of the "charged" amount. The term "windfall" echos in the vast empty canyon of my brain.

We discovered the existence of the "Letter of Protection" agreement by happenstance, based on one handwritten notation on one medical record referring to a non-descript "Letter of Guarantee rec'd from plaintiff's atty" in handrwriting on one page. 

Needless to say, allheck has broken loose, with motions to bar the doctor, potentially to disqualify the attorneys and for other sanctions being considered by the Court.  

Neither the doctor nor the plaintiffs' lawyers produced the Letter of Protection agreement before plaintiffs' counsel secured the doctor's testimony for trial, despite a generic request that would cover it.

So, as defense counsel, this surprise revelation of the existence of Letters of Protection has led to a new standard discovery request that is pointed and specific: "Please produce any and all Letters of Protection or other agreements between plaintiffs' counsel and any of plaintiffs' treating physicians or other witnesses relating in any way to compensation of such treating physicians or other witnesses."

Inclusion of this discovery request can reveal a case-changing source of information in defending a case. Don't let your STD (Self Total Doubt) get in the way!