VHI Undertakings
For many years past, the Society and VHI Healthcare (‘VHI’) have operated a protocol which the Society believes fairly protected the interests of VHI, solicitors, and solicitors’ clients. Regrettably, recent negotiations in regard to the fee payable broke down when VHI sought to impose conditions which are not only unworkable in the Society’s view but, in very many cases, contrary to clients’ interests. In particular, VHI state that they will henceforward seek an undertaking that the solicitor will pay the full amount of the benefit received from VHI where the amount recovered for damages equals or exceeds the benefits received from VHI. 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 in respect of VHI benefits, but could also have to pay, out of the damages recovered, any balance due to VHI. Thus in many cases, clients would be deprived of some or all of their damages and would be engaging in litigation effectively for the benefit of VHI at no cost to VHI.
In the Law Society/VHI protocol hitherto applicable, it had been agreed that the VHI would accept from the undertaking solicitor the sum that that solicitor stated he had recovered for VHI. The solicitor would provide a clear explanation and his word would be accepted. This was important because many settlements are "round figure settlements" and it was essential that the undertaking solicitor should be the arbiter of the issue of how much of the damages recovered were recovered for VHI.
In future, practitioners will have to conclude their own agreement with VHI. The following advice is offered:-
(1) there is no obligation whatever to give an undertaking to VHI. If an undertaking is refused, however, VHI may refuse, pursuant to Rule 9(f)(ii) of their Rules, to pay benefits for treatment for injury caused through the fault of some other person or body. The Society considers the Rule to be an unreasonable one as it stipulates, inter alia, that the member will "do everything we ask to recover those benefits and repay them to us". VHI contend that this entitles them to direct their members to direct their solicitors to give undertakings that VHI require. There is no such obligation.
(2) if a practitioner decides, after due consideration and discussion with his client, that he/she will provide an undertaking, it is essential that what is undertaken for is the repayment only of not more than such monies as have been recovered in the litigation.
(3) Each practitioner must decide what is a reasonable fee to charge for the important service provided. By providing an undertaking, the practitioner is delivering a service of substantial value to VHI, in which he incurs a personal responsibility, and that should be reflected in the fee charged to the VHI. In the recent negotiations with VHI, the Society had proposed a fee of €400 which was in respect of undertakings in the form that had been agreed hitherfore.