Protected Accounts – An Unbearable Cost Of Doing Business For Injury Litigation Service Providers?

Protected accounts - the deferred until settlement payment arrangements offered by treatment and assessment providers - has long been an accepted cost of doing business in personal injury litigation. However, "over time the issue got away from itself," says Amanda Bafaro, Chief Risk Officer & General Counsel at BridgePoint Financial Services, and "the volume of cases where service providers must wait many years until settlement has become financially unbearable for many of them".

"Protected account arrangements have always been the go-to for lawyers where insurance benefits are denied or unavailable since most claimants don't have the funds themselves to cover their treatment costs independently" says Bafaro. Similarly, plaintiffs' counsel often negotiated deferred payment terms with experts to defray the heavy disbursement burden they are required to carry in their contingency fee-based practices. But the market has been disrupted. "Service providers could afford