Wilkes & McHugh Law Firm's Departure Highlights Fall in Nursing Home Lawsuits

by Jan Cottingham  on Monday, Jun. 9, 2014 12:00 am  

Source: Arkansas Department of Human Services

Google the word pairs "Wilkes & McHugh" and "Little Rock" and the first entry to pop up is “Nursing Home Abuse Attorneys|Wilkes & McHugh P.A.”

Sometime in the fall of last year, however, the Florida law firm, once pre-eminent in the field of nursing home litigation in Arkansas, quietly shut down its Little Rock office, as well as its Memphis location.

The departure of Wilkes & McHugh, known for winning historic, multimillion-dollar verdicts against nursing homes, illustrates the changing economics of nursing home litigation in Arkansas.

And, some say, it also reflects an improvement in care in long-term care facilities, an improvement reflected in a decline in documented nursing home violations. The Arkansas Health Care Association, the lobbying arm of the nursing home industry in Arkansas, holds that improved staffing has led to a decline in claims of abuse and neglect.

“Probably one of the largest reasons why they’re not here is the decline in nursing home litigation,” said Brian Reddick, who established Wilkes & McHugh’s Little Rock office in 1998. He left the firm in 2009 to open his own firm, Reddick Moss. “The number of lawsuits that were filed in 2001, ’02 or ’03 compared to what they are now would just be staggering, the change in the number of lawsuits.”

No entity tracks nursing home lawsuits, but a number of plaintiff’s lawyers in Little Rock agreed with Reddick that litigation had decreased. They also generally agreed on at least one of the reasons: Many nursing homes are either carrying no liability insurance or minimal policies, limiting the amount of money families and lawyers can recover.

“I don’t have any personal knowledge as to why they left. I can guess,” said Thomas Buchanan.

Buchanan is the lawyer who last year won a $5.2 million judgment against Greenbrier Nursing & Rehabilitation Center in the 2008 death of patient Martha Bull. Circuit Judge Michael Maggio later reduced that sum to $1 million.

(Maggio is now under investigation over thousands of dollars in contributions made by Michael Morton of Fort Smith, owner of the Greenbrier center and 31 other nursing homes, to political action committees that gave money to Maggio’s campaign for the Arkansas Court of Appeals. Maggio halted his campaign and the Arkansas Supreme Court has stripped the judge of all cases.)

“My guess is that we’re in a different climate than we were in in the late ’90s and part of the early 2000s,” Buchanan said. “When you talk to nursing home owners, what they will tell you is that in around 2002, liability insurance premiums went up significantly. I would say by 2005 or ’06, very few nursing homes had significant insurance. In fact, a lot of them have gone to $100,000 eroding policies or $250,000 eroding policies, and it’s not the way it was.”

“Eroding” policies, also known as “wasting” or “self-consuming” policies, pay the cost of defending a claim from the policy. That means that once the clock starts ticking on court and attorney’s fees, the amount recoverable from insurance is reduced by the amount of those fees.

“It used to be there were substantial policies that were in place, sometimes even excess policies and basically you knew that you could recover,” Buchanan said. “That’s just not the case now. And frankly, I think that some of it may be by design,” he said. “It’s the best tort reform for them because if you say you don’t have any insurance, then a lot of plaintiff’s lawyers won’t sue.”

 

 

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