Why is Uber suing some Los Angeles injury law firms?

Uber is making (or seeking?) headlines in Los Angeles this week. The rideshare company we all use has filed a federal lawsuit against a few Los Angeles injury law firms and other parties.

Uber is claiming that an alleged kickback scheme exists between a few Los Angeles law firms and doctors who treat the firms’ clients. Uber’s federal complaint alleges that there are “secret agreements” between these firms and the medical providers. The alleged scheme goes like this:

-the providers take medical liens on the case. They then artificially inflate their medical bills knowing full well that Uber is legally required to carry $1M in insurance coverage

-the providers perform medically unnecessary or unreasonable procedures in order to increase the bills

-attorneys use these inflated bills to demand higher settlements. In the event they do not recover enough to pay off the medical liens, the providers agree to take less money, knowing if they “play ball” with the attorneys, they will get repeat business.

-as a result, Uber has had to raise its fees to help defray the costs of this allegedly fraudulent kickback scheme.

Let me preface my opinion with this disclaimer: I do not know any of the parties involved in this lawsuit. I cannot vouch for the accuracy or inaccuracy of any of Uber’s allegations.

Is it possible that some Los Angeles personal injury lawyers engage in less-than stellar conduct? I wish the answer was no. Names like Tom Girardi and Michael Avenatti come to mind.

Does that mean Uber has a meritorious case? Not necessarily. And trying to make this into a federal RICO case seems like a stretch to me.

This case could be an attempt by Uber to get regulators to reduce the mandated insurance coverage. Fraudulent claims will be deterred if the insurance limits are lower, right?

This would be a terrible result. Uber is a part of everyday life for many California and Los Angeles residents. Allowing the rideshare giant and common carrier to reduce its insurance coverage because a few Uber riders presented allegedly fraudulent claims would present a major safety issue for the rest of us.

In other words, Uber is pursuing an overly broad, blanket solution for a problem it has not demonstrated is widespread enough among Uber riders throughout California.

The sad reality is that fraudulent insurance claims have always and will always exit. That doesn’t mean we reduce available insurance. When we’re walking in the rain, do we open our umbrellas, or close them?

I will continue to follow developments in this case.

And if you have questions about your Los Angeles Uber or Lyft car accident case, my office is ready to assist, 24/6.