Pam: Barry, I was surprised to see that your tax returns can be an issue in a case. And a mistake related to that is claiming a wage loss that’s not supported by tax returns. How can that happen?
Barry: One of the things that you’re allowed to claim as an element of damages in a personal injury case is wage loss. Insurance companies are allowed to ask for your tax returns to try to verify that wage loss claim.
Now, there are some businesses where it’s real common for people to be paid in cash. Construction is one of them, people who wait tables might be another. I had a case years ago involving a woman who worked in a hair salon, where she actually had two real different sets of books.
The problem that arises with that is that when you claim a wage loss that is really kind of in excess of what your tax returns suggest that you really are making, you’re really admitting to two things. One is that you’re admitting you’re committing tax fraud, which is a bad thing and can cause all kinds of problems for you, but you’re also really kind of shooting your credibility in the foot.
People don’t like people who lie, and people especially don’t like people who lie and cheat on their taxes. So, the case that I had with the woman who worked in a hair salon and had the separate sets of books, I had this discussion with her, and she still really wanted to present that claim for wage loss that was on the real set of books as opposed to the one she used to support her tax returns.
And I actually withdrew from the case, rather than put her in a position where she’s making that claim and having me involved in that, simply because it could be really, really devastating, not just to the case but could really expose you to a lot of additional legal problems that you wouldn’t be facing otherwise.
Pam: Okay, now, one thing I thought was pretty routine after an accident, giving a recorded statement to an insurance company. But you have that down as a mistake as well.
Barry: I think it’s a really terrible mistake for people to make before they get a lawyer. You have to understand that the purpose of taking a recorded statement is not just something for the file, but it’s something to either create a defense for the insurance company, or to do something to help them minimize their exposure, in other words, lessen the value of the claim to the insurance company.
It’s being taken with those ends in mind, and the person who’s taking the statement is the adjuster. The adjuster is somebody who is going to be really well-trained and well-versed in the issues that are important in your case. And they will lead you down a path where you can say things without knowing it that can be really damaging to your case.
Pam: This is another one that I knew would be a mistake as well, hiring a poorly qualified lawyer to handle your case.
Barry: You know, people in my profession do a horrible job in terms of maintaining a good public image of what we do. Some of that’s from the advertising that you see on TV, some of it is just the fact that everybody in the Yellow Pages claims to be able to do this kind of work.
And the fact of the matter is is what we do is tough, tough work. Not only are we responsible for establishing the liability end of the case, but we also have to establish the medical end of the case as well, and that is something that can be fairly complex. But it’s got to be presented to juries in an understandable, compelling kind of way, and putting together that story that people can relate to, that they find compelling, is difficult, difficult work, and not everybody can do it.
Not everybody takes the right approach to handling cases in a way that really suits the client’s needs and goals and values as best possible. Once you hire a lawyer, a lot of times, unfortunately, you could fire them, but it may be very, very difficult to find somebody else who’s going to be really well qualified to handle your claim, once another lawyer has been working on it.
So, making a bad decision about who to hire as a lawyer to handle this kind of a case can be a terrible, terrible mistake.