How Some Florida Nursing Homes Escape Responsibility for Wrongdoing
The overwhelming majority of personal injury plaintiff's could not possibly afford to pay their attorneys if they had to pay up front, win or lose. The contingency fee contract illuminates much of the financial risk to the client by shifting the risk of loss to the lawyer. As a result, clients are much more willing to prosecute wrongs done to them. On the other hand, shifting the risk of loss to the attorney makes the lawyer much more selective about which cases to prosecute because losing means the lawyer will not get paid. Some nursing homes have figured out a way turn the Florida nursing home abuse lawyers selection process into an Achilles heal.
The personal injury attorney selection process is based on two components. First, the attorney must determine if the case has merit. Second, the attorney must determine if the wrongdoer is judgment proof. In a previous post, I discussed the fact that Some Florida nursing home chains have figured out they can discourage Florida nursing home abuse attorneys from pursuing a case against them by making it very difficult to collect a personal injury judgment. In this post, I discuss how it is done.
Although each Florida nursing home chain is set up somewhat differently, the basic concept is the same. The first step is to separate all the corporate assets into different companies. One company owns the license to operate the facility, one company owns the property, one company provides management services, and one company does the accounting. The next step is to ensure that only the company that owns the license provides patient care. This company will own nothing of value and have the obligation of paying all the employees. Payments for the provision of patient care are paid to this corporation. Any money left over each month after paying the employees is immediately siphoned off by the other corporations as charges for services. The process makes the company that holds the license unable to pay a judgment. If the corporations that do not hold the license are sued, their attorneys claim they are not responsible for nursing home neglect because they are not involved in patient care. Unfortunately, Florida judges often agree. The final step in the process is to purchase very little if any liability insurance.
The lack of liability insurance means any payment for injuries or death caused by abuse or neglect must come out of the corporate assets. The complicated corporate structure makes it difficult to hold any of the companies other than the license holder responsible. The fact that the license holder has no real assets coupled with all of the above discourages most Florida personal injury attorneys from bringing claims.
