Update: VHI Undertakings
In May of this year, the Litigation Committee advised practitioners that the protocol which had existed for many years between the Society and VHI Healthcare ('VHI') in respect of solicitors' undertakings to the VHI, had come to an end. This occurred because, in the course of negotiations regarding an increase in the fee paid to solicitors in respect of such undertakings, VHI sought to impose conditions which were not only unworkable in the Society's view but which, in very many cases, would be contrary to clients' interests. In particular, VHI stated that they would henceforward seek an undertaking that, subject to any court order to the contrary, the solicitor will repay to VHI, out of the proceeds which come into his/her hands, the full amount of the monies paid out by VHI on behalf of the subscriber/client. Thus, in a case where only part of the full value of the claim has been recovered, the client might have to pay not only any amount that he had recovered specifically in respect of VHI benefits, but could also have to pay, out of the other damages recovered, any balance due to VHI.
Practitioners should note that the wording of the undertaking which VHI is now presenting to solicitors has been unilaterally changed to incorporate this new condition.
As previously advised, practitioners will in future have to conclude their own agreement with VHI on a case by case basis. Practitioners should note the following:-
1. A solicitor has no obligation to give an undertaking to VHI.
2. If a client requests that the solicitor give such undertaking, the solicitor should explain to the client the full effect of the undertaking.
3. If a practitioner decides, after due consideration and discussion with the client, that he/she will provide an undertaking, he/she should be aware of the extent of the personal responsibility which this may entail.
4. The fee to be paid is a matter of negotiation between the solicitor and the VHI in each case. In the recent negotiations with VHI, the Society's representatives took the view that a fee of approx. €400 would be justified in respect of undertakings in the form which had been agreed heretofore.
5. In the case of the 'old' form of undertaking, the solicitor's obligation is to repay to the VHI, out of the proceeds that come into his/her hands, the net amount recovered in respect of the payments made by the VHI. Under the terms of the earlier agreement with VHI governing that form of undertaking, the solicitor is the ultimate arbiter of the sums recovered, subject to a clear explanation being provided to VHI where the full monies are not recovered. The Committee considers that where a solicitor has given an undertaking to VHI in the "old form" and where a case is settled for a percentage of full value, the payment to VHI of that percentage of the amount due to VHI satisfies the terms of the undertaking.