Assignment of Personal Injury Cases
Brien Roche
To assign something means to sell it. Certain claims may be sold. For instance contract claims may be sold. You see that all the time in terms of debt collection. Debt collectors will frequently buy contract claims that a particular creditor may have. They may buy them for a lump sum dollar amount. In the alternative they may buy them in return for payment to the assignor of a certain percentage of what might be collected.
Legal malpractice claims are considered to be contract claims. They however may not be assigned. MNC Credit Corp v. Sickels, 255 Va. 314 (1998)
Assignment Personal Injury Cases
In general personal injury claims may not be assigned. Likewise fraud claims may not be assigned. RTC v. Winthrop, 923 F.Supp. 83 (1995) Likewise punitive damage claims cannot be assigned.
Within the personal injury context however, an assignment may be given of proceeds. What that means is that the plaintiff continues to own the claim but the plaintiff may assign the proceeds of the claim to someone else. The assignment in that case serves as security for what is called “new value given”. Gem Construction Corp. of Virginia, 262 B.R. 638 (E.D. Va. 2000) What that means is that if somebody renders a service to a plaintiff, such as a healthcare provider, and that service is worth “X” amount of money, then the plaintiff may assign “X” amount of money out of the personal injury proceeds to that provider.
The assignor (the plaintiff) must retain exclusive control of the litigation and any settlement. Musser, 24 B.R. 913, 920 (W.D. Va. 1982); Duty, 78 B.R. 111, 114 (E.D. Va. 1987) To do otherwise would encourage champerty and maintenance. Both of those are disallowed. Likewise assignments tend to discourage settlement. The public policy of Virginia encourages settlement. Midwest Mutual v. Aetna, 216 Va. 926 (1976)
Assignment Personal Injury Cases-Code 8.01-26
In looking at any assignment issue, you have to look closely at Va. Code § 8.01-26. That Code section does expressly allow assignment as to claims for damage to real or personal property. Likewise it allows assignment as to contract claims. Likewise it does not prohibit an injured party from making a voluntary assignment of proceeds in a personal injury action.
All of that has to be analyzed in conjunction with Va. Code § 8.01-13 which allows for a credit as to the party being sued for whatever the plaintiff received for the assignment before the defendant had notice of the assignment.
The long and short of assignments of personal injury claims is that the proceeds may be assigned. The plaintiff must continue to control the litigation. If the plaintiff actually received something of value for the assignment prior to the defendant having notice, then the defendant may be entitled to that credit.
Work With a Skilled Personal Injury Lawyer in the DMV Area
Call, or contact us for a free consult. Also for more info on assignment of contracts see the Wikipedia pages. Also see the post on this site dealing with contract issues.