Vaccine program ruling seems to favor plaintiff brokers.

However, the question is does it really?

Last week in the US Court of Federal Claims, a ruling regarding the right of petitioners and their attorney's to utilize and compensate their structured settlement annuity broker was published by Special Master Christian Moran. At first blush it gives the petitioner who is trying to obtain compensation from The Vaccine Program or Vaccine Fund the right to hire their own annuity specialist and also to fairly compensate them.

I am providing a complete copy of the ruling in the Miyake vs Secretary of Health and Human Services, case No. 06-459 here in pdf form. It is lengthy and makes for confusing and often humorous reading and reasoning if you take the time to go over the entire 27 pages. 

In a nut shell the petitioners attorney, David Terzian, who was a long time US Attorney working for the government in the Vaccine program and who now represents petitioners, took on the long standing practice and policy of the program that:

A. The petitioner MUST structure their award that funds their care plan using a government purchased structured settlement annuity written exclusively through the approved brokers chosen by the DOJ. ( As most of us know in the business that it is a small and exclusive group that has worked with the DOJ in this program over the last 20 years.)

B. That if the petitioner elects to structure their pain and suffering and lost income element that they MUST use a defense broker chosen by the government or elect to take all cash.

C. That if the petition does engage a structured settlement planner to work with them to arrange their affairs, look at investment options and devise a long term care plan that the planner is unable to split the commission of the DOJ favored broker to mitigate the cost of his services as is done in almost every structured settlement in the commercial world where two brokers work a case.

The scope of this 20 year program, the tenacity by which the defense brokers have clung to this exclusive commpensation and control model and the frustration of the petitioners and their attorneys is an epic story I won't go into in this particular post. What is important is that in this decision there are certain assertions made by both sides that shaped the Special Masters decisions such as:

1. The acknowledgement by both sides that the split commission model used in all structures outside the DOJ program is in fact industry practice and that the Vaccine program is in fact an anomaly in how it functions in that regard.

2. The SM's decision that the petitioners have the right to engage their own annuity expert to work on their behalf and assist them in design, pricing verification and to a very limited degree, company selection. A welcome acknowledgement.

3. The laughable, but apparently swallowed by the SM, assertion that sharing commissions with a licensed annuity broker working for the plaintiff might actually constitute a rebate, an argument along the lines of "the big lie" defense brokers perpetrated for year that " knowledge of cost constituted constructive receipt", a fraud that was eventually shot down as well. I can't believe they even trotted this one out, but such is the tentacity of the DOJ and HHS to retain the status quo.

4. The assertion by the SM that it is perfectly acceptable in his view for annuity experts to be engaged and paid hourly for their time, although the methodology of who exactly pays this fee was left up in the air. ( As someone who did hourly annuity work in the Vaccine program I can attest it is meager compensation for a great deal of work and payment takes months if not years. Hardly a thriving business model for plaintiff experts.)

5. The laughable observation by the SM that the absence of plaintiff brokers and experts over the last 15 years indicated a lack of interest by petitioners on this issue. The fact is I did a great deal of work on Vaccine cases in the late 1980s and early 1990's, in particular I was instrumental in the Wilson case in ending the "four pay" installment process that boosted the cost of the annuity 35% over a single pay and was also able to cash out several cases, such as Wilson, Zeiglar and others before the defense community and DOJ slammed shut the 4 pay window and locked down defense control again. The reason there is no plaintiff activity is the inability to be PAID for our work through DOJ prohibition and the lack of understanding by HHS how the annuity markets work in the free world outside of the vaccine program. Another reason I wasn't in the program was the my general agent for many years was threatened with losing key producers if "Wahlstrom was allowed to continue to work in the vaccine program." Thats a story for another day and post however.

6. The mention and citation of many industry cases, including Macomber, in his ruling. I have to wonder what the Special Master and Attorney Terzian would have made of the US Court in Hartfords RICO case on the issue of rebating and conspiracy to prevent proper representation and accurate information to plaintiffs in crafting this opinion.

In summary, this ruling while a helpful crack in the wall and a foundational case now in prying open the HHS/DOJ lock down on plaintiff representation and compensation falls short of the free market solution of joint representation and COMPENSATION under our industries current model. I certainly applaud the efforts of Attorney Terzian, who did ask me to provide an opinion letter which was cited, in bringing this program into the day light. The work the petitioner attorneys do is tough, poorly paid, frustrating and miserable but they persist in working to get the best possible outcome for tragically injured children and their families.

However, until HHS and the DOJ do the following, in my opinion, the Vaccine Program is a black mark on the justice system and free market representation.

1. Open the program up to joint representation and standard industry split compensation. I am delighted that I can now start working with all my vaccine attorneys and charging $500 an hour for my services, I just am unclear if the Vaccine fund really wants to be paying that when I could be more then adequately compensated for my work under a standard commission split.

2. End the DOJ " defense only" approved list and sworn statements as if using only defense brokers is some patriotic duty and to be a "plaintiff broker" somehow makes you unclean and unworthy of doing DOJ work in the Vaccine program or other cases. This list was inserted in the dead of night and serves no purpose other then to disenfranchise huge blocks of plaintiffs for no purpose other then controlling commissions and pricing information.

3. Failing the above, get a standard hourly rate set, say $350 per hour, to provide annuity work on Vaccine cases that gets billed to the fund and paid with in 30 days of funding of the annuity. Just make sure to tell the drug companies and senators that this fee is an add on cost that is in there as a result of the DOJ's and HHS "fear" that splitting commissions is somehow rebating.

Also, while I am referred to at points in the decision as "Dr. Wahlstrom" much to my mothers dismay I neither asked for nor deserve that honorable title and have no idea how it got inserted into the case law as such. Yes, I've worked this area for decades and I can only hope this case is a small crack in the wall at HHS that prevents proper representation and compensation of plaintiff planners and experts.

Posted on March 27, 2009 .