Health Law Monitor

West Virginia Legislature Clarifies 1% Assessment Pursuant to W. Va. Code § 29-12D-1a

May 21, 2018

By: John Mark Huff

Since W. Va. Code § 29-12D-1a went into effect on July 1, 2016, there has been disagreement among counsel as to which party is responsible for paying the 1% assessment when a medical malpractice case is settled prior to trial.  According to W. Va. Code § 29-12D-1a(c)(3) (2016), “[f]or any assessment levied pursuant to this subsection on a settlement entered into by the parties, the date on which the agreement is formalized in writing by the parties shall be used to determine the applicability of this provision.”  However, the statute gives no guidance on which party shall pay the 1% assessment in the event of a settlement.  This stands in contrast to W. Va. Code § 29-12D-1a(c)(2) (2016), which states that “[f]or any assessment levied pursuant to this subsection for which a judgment is entered by the court…[t]he defendant or defendants shall remit the assessment.”

Without any formal guidance as to which party was to pay the 1% assessment when a medical malpractice case settled before trial, many plaintiffs took the position that it was the defendant’s responsibility to pay the 1% assessment if there was a settlement.  This was likely based on the fact that the defendant was required to pay the 1% assessment in the event of a judgement pursuant to W. Va. Code § 29-12D-1(c)(2) (2016), but the statutory section dealing with the payment of the 1% assessment in the event of a settlement – W. Va. Code § 29-12D-1a(c)(3) (2016) – was silent as to who was to pay.  Thus, according to most plaintiff’s, the defendant was to pay the 1% assessment if a medical malpractice case settled prior to trial.  On the other hand, defendants took the position that it was the plaintiff who should pay the 1% assessment, because the assessment was to come out of the total amount of the proceeds. Therefore, the entire settlement was to be paid to the plaintiff, who would then remit the 1% assessment to the proper authority.

Seeing this conundrum, the West Virginia Legislature passed Senate Bill 576 during the 2018 legislative session to put to rest which party was responsible for paying the 1% assessment when a medical malpractice case is settled.  According to the new statutory section, “[f]or any assessment levied pursuant to this subsection on a settlement entered into by the parties…[t]he assessment shall be remitted by the plaintiff.”  W. Va. Code § 29-12D-1a(c)(3) (2018).  This new statutory section puts to rest which party is responsible for paying the 1% assessment when the parties settle a medical malpractice case and goes into effect this summer.  However, to be safe, it is good practice to include language, in any medical malpractice settlement agreement, that the plaintiff is responsible for paying the 1% assessment out of the proceeds of the settlement such that there is no question as to which party is responsible for paying the same.