16 N.Y.3d 684 (2011)
A workers’ compensation carrier’s share of litigation costs related to a claimant’s recovery for future medical expenses in a third-party action is determined only when the claimant actually incurs and pays those medical expenses, as future medical benefits are considered too speculative for upfront calculation.
Summary
Peter Bissell, a paraplegic due to a work-related accident, received workers’ compensation benefits from the New York State Insurance Fund (the Fund). He also won a third-party lawsuit that included damages for future medical expenses. The Fund asserted a lien on Bissell’s judgment for past benefits paid. Bissell sought to compel the Fund to pay its share of litigation costs upfront, based on the present value of the future medical expense award. The Court of Appeals held that the Fund’s share of litigation costs for future medical expenses should only be calculated and paid as Bissell incurs those expenses, rejecting Bissell’s attempt to have the Fund pay upfront based on the jury’s award.
Facts
Peter Bissell sustained injuries in a work-related accident, resulting in paraplegia. The Workers’ Compensation Board determined he had a permanent total disability and ordered the Fund, his employer’s compensation carrier, to pay him $400 monthly for life. Bissell sued a third party (the Town of Amherst) and won a jury award that included $4,650,000 for future medical expenses over 32.7 years, later reduced to a present value of $4,259,536. The Fund asserted a lien of $219,760 against Bissell’s judgment, covering past benefits and medical expenses. The Fund agreed to pay its share of attorney’s fees related to lost wages compensation but refused to pay upfront its share of fees tied to the recovery of future medical expenses, offering to pay only as those expenses were incurred.
Procedural History
Bissell initiated a proceeding to extinguish the Fund’s lien and demanded “fresh money” representing the Fund’s share of litigation costs for the future medical expenses award. Supreme Court granted Bissell’s petition in full. The Appellate Division modified the judgment, denying Bissell’s claim to recover litigation costs based on the Fund’s benefit from forgone future medical payments, and remitted for recalculation. The Court of Appeals granted leave to appeal.
Issue(s)
Whether the future medical benefits that a compensation carrier has been relieved of paying due to a claimant’s successful prosecution of a third-party action are “so speculative that it would be improper to estimate and to assess litigation costs against [that] benefit to the carrier”.
Holding
No, because the workers’ compensation carrier need only pay its equitable share of attorneys’ fees and costs incurred by a claimant once the claimant incurs and pays each medical expense, as those future benefits are considered speculative.
Court’s Reasoning
The Court of Appeals reasoned that while the Fund undeniably benefited from the third-party action by being relieved of paying future medical expenses, the jury’s award for future medical expenses was not a reliable basis for calculating the Fund’s share of litigation costs upfront. The court distinguished between a jury award in a third-party action, which represents a one-time opportunity to recover future medical expenses, and the workers’ compensation context, where the actual medical expenses incurred by the claimant are determined by the Workers’ Compensation Board. The court emphasized that, unlike death benefits or total disability, future medical expenses are inherently uncertain and depend on the claimant’s actual needs and the cost of care at the time it is provided. The court cited Burns v. Varriale, 9 N.Y.3d 207 (2007), stating that “if a claimant does not receive benefits for death, total disability or schedule loss of use, the carrier’s future benefit cannot be quantified by actuarial or other reliable means.” The court suggested that the trial court could fashion a means of apportioning litigation costs as they accrue, ensuring the carrier’s share is based on realized benefits while also protecting the claimant. The Court affirmed the Appellate Division’s order, requiring the Fund to pay its share of litigation costs only as Bissell incurs and pays his future medical expenses.