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GlobalTort

The Intersection Among Torts, Science, Corporate Law, Insurance & Bankruptcy

Legacy Liability and “Skeletons in the Closet” – the Uber Bank Version

Posted in Fraud, Litigation Industry

Uber banks in Europe (e.g. HSBC) are under increasing scrutiny for creating or aiding and abetting various forms of tax fraud and other financial frauds.  As one result, the litigation industry will continue to grow and thrive.  Another result is increasing use of the term “legacy liability” with respect to financial houses. For example, consider this reference from a February 18, 2015  Financial Times article about a dawn raid to seize computers and paper records from HSBC:

Guenther Dobrauz, head of legal and regulatory services at the Zurich office of PwC, the consultancy, said he expected further scandals and investigations of this nature at other Swiss institutions in the coming months.

“There are still a lot of legacy issues from historical business models that will increasingly come to the fore,” said Mr Dobrauz. “I am expecting [a development in this area] every other day as cleaning up history usually takes a bit of time. I expect there are still quite a few of those skeletons around, but just because one thing pops up, I would not say the whole [system] is bad.”

 

National Registry to Be Created for Results from Low Dose CT Scans Paid for by CMS/Medicare

Posted in Asbestos, Cancer, Litigation Industry, Science

More on CMS paying for low dose CT scans for some people, as described yesterday.

As part of its announcement, CMS explained that Medicare reimbursement will be available only when the radiography facility contributes resulting data to one or more national registries that will be be put into operation. The rationale and specifics were explained as follows, and deserve careful consideration as to the short and long term implications for toxic tort litigation and precision medicine.

“Response:
The primary purpose for requiring the submission of data to the registry is to document compliance with the coverage criteria that are not evidenced on the health care claim.  Furthermore, based on the public comments and the evidence reviewed, we strongly believe that the registry will serve as an aid to those seeking to study the clinical benefits of this screening.   The registry and the other criteria required in this NCD are supported by the evidence reviewed, including the NLST.  The registry will help ensure that only eligible beneficiaries will receive this screening service since only beneficiaries that meet the eligibility requirements will benefit from such screening.    

Furthermore, we recognize the impact of this criterion for imaging facilities.  We will only require production of the minimum number of data elements to carry out this payment function in an effort to reduce burdens.  Therefore, we are modifying the data registry elements, based on our review of the evidence and feedback received from commenters.  As amended, the data elements are limited to those required to determine whether an individual has met the coverage criteria for the LDCT lung cancer screening service, that is, whether their receipt of the service was “reasonable and necessary” and “appropriate.”  Data collected and submitted to a CMS-approved national registry must include, at minimum, all of the following elements: 

Data Type Minimum Required Data Elements
Facility Identifier
Radiologist (reading) National Provider Identifier (NPI)
Patient Identifier
Ordering Practitioner National Provider Identifier (NPI)
CT scanner Manufacturer, Model
Indication Lung cancer LDCT screening – absence of signs or symptoms of lung cancer
System Lung nodule identification, classification and reporting system
Smoking history Current status (current, former, never), 
If former smoker, years since quitting, 
Pack-years as reported by the ordering practitioner, 
For current smokers, smoking cessation interventions available. 
Effective radiation dose CT Dose Index (CTDIvol)
Screening Screen date
   Initial Screen or 
   Subsequent Screen

Additionally, national registries are strongly encouraged to collect data on lung nodules (for example:  clinically significant non-lung cancer findings, the number and types of nodules, and size and location of each nodule), subsequent diagnostic testing, adverse events, and intermediate and long term health outcomes, in order to inform practices and policymakers about the ability to implement a LDCT lung cancer screening program broadly in multiple settings across the country, and achieve positive outcomes, consistent with the NLST.  We recognize that these other data elements are extremely important to establishing the benefit of these screening services and improvement in health outcomes.  We strongly encourage submission of such data elements to registries in addition to the minimum elements required under this NCD.  These data will not only verify that screening leads to improved health outcomes for the Medicare population, but will also serve as the basis to refine and improve screening in practice, and serve the quality improvement purposes of screening facilities.  We believe that multi-society stakeholders are in the best position to determine the appropriate data elements for reaching these goals, and to adjust the particular elements over time.”

Litigation Funding – A Look Back and to Note Chicago is Now Home for the World’s Largest Litigation Funding Company – Gerchen Keller Capital LLC

Posted in Litigation Funding, Litigation Funding. Litigation Industry, Litigation Industry, Mass Tort Issues

Chicago is now home to the world’s largest litigation funding source. It is Gerchen Keller Capital LLC. which just announced raising  a new fund of $475 million, and that it and adjuncts have an additional $800 million under management.  The new press release is pasted below. For even more color on Gerchen Keller and its people, there is an ancillary story in the Chicago Daily Law Bulletin.

For more global color on the broader topic of litigation funding, here’s a quick look back at some of the many posts on GlobalTort about litigation funding.

Remember all the way back in 2009, when RAND sponsored a conference on litigation funding? Back then, I said:

“Litigation funding is a topic I’ve mentioned before in a Corporate Counsel  “special section “article and on this blog.  The existence of material amounts of capital available for litigation funding is in my opinion a huge development in and driver for litigation of all kinds, ranging from intellectual property to securities class actions to mass tort personal injury claiming. Moreover, this trend is only going to accelerate as the UK’s legal reforms will soon (not later than 2011) allow direct outside investment in UK law firms.”

Or, later in 2009,  Burford Capital went public in the UK, and the always astute Alison Frankel declared litigation funding a “bona fide investment class.”   Then, back in 2010, numerous events litigation funding events occurred. I wrote: Then, back in 2010, several litigation funding events occurred.  I wrote:

It’s not quite the rock star niche Dr. Hook described when he sang about the status achieved from appearing on the cover of Rolling Stone, but litigation funders Selvyn Seidel and Rick Fields did make the cover of American Lawyers’ supplement magazine, Litigation 2010. The related article is titled “London Calling, (paywall)” a reference to Messrs. Seidel and Fields leading litigation funding businesses which are public companies registered on the UK’s AIM market.

The article, by Richard Lloyd, is preceded by this teaser: “Two publicly listed funds are investing in early-stage commercial litigation. Is this the start of a revolution, or a sideshow for a few former Am Law 100 lawyers?”

The answer, in my view, is pretty plain. Over time, litigation funding will cause as much of a revolution as can possibly occur in the already massive litigation industry that is tied up in hundreds of years of precedent and balkanized legal systems. In saying that, I’ll admit to some possible bias because my professional life brought me into contact with both gentlemen, and Selvyn Seidel was kind enough to accept an invitation to speak at a litigation seminar I chaired last year in London.

Meanwhile, as 2014 progressed and Gerchen raised more money, the US Chamber of Commerce and some of its friends once again complained about litigation funding, even though plenty of companies love litigation funding as a way to hedge risks and take on cases that might otherwise not start or succeed.

Now back to 2015. Pasted below is the press release from Gerchen Keller. Not so many words, but they speak volumes about the present state of the litigation financing industry as an adjunct to the litigation industry.

CHICAGO, Feb. 10, 2015 /PRNewswire/ — Gerchen Keller Capital, LLC (“GKC”) today announced the close of its newest private investment fund, GKC Credit Opportunities, LP, with more than $475 million in commitments.  Together with its two litigation finance funds and other pooled vehicles, GKC has invested or manages more than $800 million in assets.  GKC is now the world’s largest investment firm focused exclusively on legal and regulatory risk.

“As we continue to expand the suite of products we offer, we are grateful for the support of the institutional investor community and pleased by the strong demand from companies and law firms,” Chief Executive Officer Adam Gerchen said.

Using capital from its latest fund, GKC purchases legal fee, judgment, and settlement receivables in connection with litigation matters that are largely resolved—providing liquidity to companies and law firms that seek to monetize litigation proceeds or legal fees and recognize revenue immediately. 

GKC also helps structure litigation settlements where the parties have differing cash flow needs—for example, providing a lump-sum settlement payment to a plaintiff while allowing the defendant to spread its settlement payments over time. 

GKC already has invested more than $100 million in these post-judgment and post-settlement opportunities, in transactions involving organizations ranging from Am Law 25 law firms to closely held corporations. 

“This new pool of capital continues our commitment to constant innovation in serving the legal community,” Managing Director Ashley Keller said.  “Our range of capital solutions now includes traditional financing for litigation, arbitration, and transactional matters, as well as products to reduce appellate risk, protect against outsized liability, guarantee payment of adverse fee awards, structure settlements, and accelerate receivables.”

With the launch of its latest fund, GKC now provides capital at any point in the litigation process, with differing investment terms that correspond to the relative level of legal risk.

“From the complaint phase to the settlement table, our products help companies and law firms manage risk and stabilize cash flows,” Managing Director Travis Lenkner said.  “GKC’s unique approach goes well beyond traditional ‘litigation finance.’  We are the market leader in providing creative, non-recourse solutions in connection with legal and regulatory processes.”

About GKC:  Gerchen Keller Capital, LLC is the largest investment firm focused exclusively on legal and regulatory risk.  GKC provides capital and other financing solutions to companies, law firms, and investment funds involved with or invested in complex litigation, arbitration, and transactional matters. Through various private vehicles, the firm has invested or manages more than $800 million in assets for family offices, financial institutions, public pensions, endowments, and foundations. 

To learn more, visit www.gerchenkeller.com, email info@gerchenkeller.com, or call (312) 757-6070.

Media contact:  Travis Lenkner, Managing Director, (312) 757-6073, tdl@gerchenkeller.com.

GKC is registered as an investment adviser with the Securities and Exchange Commission.  This release is for informational purposes only.  Nothing herein should be construed as a solicitation to offer investment advice or services.  Information about investing in GKC-managed funds is available only in the form of private placement memoranda and other offering documents.”

Lung Cancer Data – More Background to CMS’ Decision to Pay for Some Low Dose CT Scans

Posted in Asbestos, Cancer, Litigation Industry, Mass Tort Issues, Science

 

As part of its Decision Memo on paying for some low dose CT scans for lung cancer, CMS’ published the data charts below, which are taken from SEER data.

Chart on Mortality and Metastases taken from NCI Seer data and published by CMS in Feb. 5, 2015 Decision Memo on Reimbursement Memo for Low Dose CT

Chart on Mortality and Metastases taken from NCI Seer data and published by CMS in Feb. 5, 2015 Decision Memo on Reimbursement Memo for Low Dose CT

 

Chart published by CMS in Feb. 5, 2015 Decision Memo on Reimbursement Memo for Low Dose CT Scans

Chart published by CMS in Feb. 5, 2015 Decision Memo on Reimbursement Memo for Low Dose CT Scans

 

 

 

 

Statutory and Provider Background to CMS’ Decision to Pay for Some Low Dose CT Scans for Lung Cancer

Posted in Asbestos, Cancer, Litigation Industry, Mass Tort Issues, Science

More on CMS paying for some low dose CT scans.

CMS received two requests to pay for some low dose CT scans.  Ultimately, CMA agreed to pay for some low dose CT scans based based on some of the governing statutory criteria. The  Decision Memo explained the following regarding the background:

“A. Current Request

CMS received two formal requests for a national coverage determination (NCD) for lung cancer screening with LDCT, one from Peter B. Bach (Director, Center for Health Policy and Outcomes, Memorial Sloan-Kettering Cancer Center), and another from Laurie Fenton Ambrose (President & CEO, Lung Cancer Alliance). The formal request letters can be viewed via the tracking sheet for this NCA on the CMS website at http://www.cms.gov/medicare-coverage-database/details/nca-tracking-sheet.aspx?NCAId=274.

“III. History of Medicare Coverage

Pursuant to §1861(ddd) of the Social Security Act, the Secretary may add coverage of “additional preventive services” if certain statutory requirements are met. Our regulations provide: 42 CFR §410.64 Additional preventive services (a) Medicare Part B pays for additional preventive services not described in paragraph (1) or (3) of the definition of “preventive services” under §410.2, that identify medical conditions or risk factors for individuals if the Secretary determines through the national coverage determination process (as defined in section 1869(f)(1)(B) of the Social Security Act) that these services are all of the following: (1) Reasonable and necessary for the prevention or early detection of illness or disability. (2) Recommended with a grade of A or B by the United States Preventive Services Task Force. (3) Appropriate for individuals entitled to benefits under part A or enrolled under Part B. (b) In making determinations under paragraph (a) of this section regarding the coverage of a new preventive service, the Secretary may conduct an assessment of the relation between predicted outcomes and the expenditures for such services and may take into account the results of such an assessment in making such national coverage determinations.”

CMS/Medicare Announces Immediate, Final Decision to Pay for Low Dose CT Scans for Some Persons at Risk of Lung Cancers After Smoking

Posted in Asbestos, Cancer, Litigation Industry, Mass Tort Issues, Science

Finding cancers early is increasingly possible, and it’s being done more and more often. Persons involved in toxic tort litigation and precision medicine topics can benefit from following the developments and anticipating the consequences.

An example arises from use of low dose CT scans to enhance earlier finding of lung cancers.  On that topic, note CMS’ February 5, 2015 press release announcement of its final decision to pay for low dose CT scans for a defined subset of current and former smokers who are 55-77, and who are current smokers or quit in the prior 15 years (other criteria also apply – see below). The full CMS “decision memo” is online and useful.

Per CMS’ press release, the decision took effect “immediately.”

Note also that results of the screens must be contributed to a national “registry,” as explained in the following subpart of the decision:

“Radiology imaging facility eligibility criteria: ….

  • “Collects and submits data to a CMS-approved registry for each LDCT lung cancer screening performed.  The data collected and submitted to a CMS-approved registry must include, at minimum, all of the following elements:”

As to the criteria for scans, CMS explains them as follows:

“The Centers for Medicare & Medicaid Services (CMS) has determined that the evidence is sufficient to add a lung cancer screening counseling and shared decision making visit, and for appropriate beneficiaries, annual screening for lung cancer with low dose computed tomography (LDCT), as an additional preventive service benefit under the Medicare program only if all of the following criteria are met:

Beneficiary eligibility criteria:

  • Age 55 – 77 years;
  • Asymptomatic (no signs or symptoms of lung cancer);
  • Tobacco smoking history of at least 30 pack-years (one pack-year = smoking one pack per day for one year; 1 pack = 20 cigarettes);
  • Current smoker or one who has quit smoking within the last 15 years; and
  • Receives a written order for LDCT lung cancer screening that meets the following criteria:
    • For the initial LDCT lung cancer screening service:  a beneficiary must receive a written order for LDCT lung cancer screening during a lung cancer screening counseling and shared decision making visit, furnished by a physician (as defined in Section 1861(r)(1) of the Social Security Act) or qualified non-physician practitioner (meaning a physician assistant, nurse practitioner, or clinical nurse specialist as defined in §1861(aa)(5) of the Social Security Act).  A lung cancer screening counseling and shared decision making visit includes the following elements (and is appropriately documented in the beneficiary’s medical records):For subsequent LDCT lung cancer screenings:  the beneficiary must receive a written order for LDCT lung cancer screening, which may be furnished during any appropriate visit with a physician (as defined in Section 1861(r)(1) of the Social Security Act) or qualified non-physician practitioner (meaning a physician assistant, nurse practitioner, or clinical nurse specialist as defined in Section 1861(aa)(5) of the Social Security Act).  If a physician or qualified non-physician practitioner elects to provide a lung cancer screening counseling and shared decision making visit for subsequent lung cancer screenings with LDCT, the visit must meet the criteria described above for a counseling and shared decision making visit.
      • Determination of beneficiary eligibility including age, absence of signs or symptoms of lung cancer, a specific calculation of cigarette smoking pack-years; and if a former smoker, the number of years since quitting;
      • Shared decision making, including the use of one or more decision aids, to include benefits and harms of screening, follow-up diagnostic testing, over-diagnosis, false positive rate, and total radiation exposure;
      • Counseling on the importance of adherence to annual lung cancer LDCT screening, impact of comorbidities and ability or willingness to undergo diagnosis and treatment;
      • Counseling on the importance of maintaining cigarette smoking abstinence if former smoker; or the importance of smoking cessation if current smoker and, if appropriate, furnishing of information about tobacco cessation interventions; and
      • If appropriate, the furnishing of a written order for lung cancer screening with LDCT.
    • Written orders for both initial and subsequent LDCT lung cancer screenings must contain the following information, which must also be appropriately documented in the beneficiary’s medical records:
      • Beneficiary date of birth;
      • Actual pack – year smoking history (number);
      • Current smoking status, and for former smokers, the number of years since quitting smoking;
      • Statement that the beneficiary is asymptomatic (no signs or symptoms of lung cancer); and
      • National Provider Identifier (NPI) of the ordering practitioner.

Understanding “Miracles” – It’s Increasingly Possible

Posted in Science
Artist's conception of shattering chromosome - courtesy of Science Magazine.

Artist’s conception of shattering chromosome – courtesy of Science Magazine.

How did a “miracle”cure come to pass? Today we have more answers to those questions because today it’s exponentially more possible to look inside inside our bodies than it was 5-50 years ago. Indeed, in years past, scientists too often (but not always) were simply left to wonder why some people have extraordinary changes from bad health back to good health, or why a few respond exceptionally well to a drug that does very little for most people.

Science magazine bring news of a great new example of figuring out how a “miracle” occurred. In short, a young woman was in bad shape because her immune system was screwed up due to a defective gene. Later in her life, there was a “shattering” of – and major change in – the woman’s chromosome that contained 1 copy of the defective gene. The “shattering” got rid of the defective gene, and so she now is living happily ever after. And now we know the reason for the miracle. Very cool.

How cool will it be when we know if the “shattering” was a random event, or instead a protective reaction to the presence of or impact of the defective gene? Did the immune system somehow signal to ask for the shattering? Did mRNA call in “shattering proteins” because it perceived but could not fix the mutation in one copy of the gene? Did one or more epigenetic mark(s) signal for or otherwise cause the shattering? Or, did the shattering occur due to activity of some of the noncoding mRNA that today we call microRNA but way back in 1999, we used to refer to them (and more) as “junk DNA.”

See the article for all the specifics – it’s a truly cool story. Note also that the entire set of events highlights the value of systematically focusing in on what happened inside “exceptional responders.” It also would be well to focus on other exceptional instances of disease.  For example, how/why did that 45 year old manifest mesothelioma – was the BAP1 mutation present?

A New and Valuable Conference at Rutgers – The American Law Institute’s Restatement of the Law of Liability Insurance

Posted in Insurance, Insurance Coverage for Tort Claims

Rutger’s strikes again as to insurance issues. Online promotion is here, and pasted below for the February 27th conference. Agenda here.

The conference is a great chance to learn about the law related to liability insurance. Even more specifically, attendees plainly will learn a great deal about how various actual and potential sections of the Restatement relate to various ways that too many (but not all) insurers abuse their policyholders, and occasional instances of policyholders abusing insurance.

The American Law Institute’s Restatement of the

LAW OF LIABILITY INSURANCE

Friday, February 27, 2015
Rutgers School of Law-Camden

“The Rutgers Center for Risk and Responsibility and the Institute for Professional Education present a conference on The American Law Institute’s Restatement of the Law of Liability Insurance. The full-day conference will be held from 9 a.m. to 5 p.m. on Friday, February 27, 2015, at the Rutgers School of Law-Camden.
The Restatement aims, as former Director Lance Liebman said, to seek “the efficient and fair rules that should govern the insurer/insured relationship.” The project has sparked spirited debate, and this is an appropriate time to assess the work while still early enough to influence the project.

The conference will engage academics and practicing lawyers in discussion of the issues raised by the Restatement. Topics will include insurance contract interpretation; the duty to settle; the duty to defend; vicarious liability of insurers for actions of defense counsel; and the concept of “large commercial policyholder.”

Papers presented during the conference will be published in the recently integrated journal the Rutgers University Law Review. ”

ACADEMIC SPEAKERS:

  • Ken Abraham (Virginia)
  • Michelle Boardman
    (George Mason)
  • George Cohen (Virginia)
  • Mark Geistfeld (NYU)
  • Bruce Hay (Harvard)
  • Erik Knutsen (Queens)
  • Leo Martinez (UC Hastings)
  • Charles Silver (Texas)
  • Jeffrey Thomas (UMKC)

REPORTERS:

  • Tom Baker (Penn)
  • Kyle Logue (Michigan)

PRACTITIONER SPEAKERS:

  • Chris Appel and Victor Schwartz
    (Shook Hardy & Bacon)
  • William T. Barker (Dentons)
  • Laura Foggan (Wiley Rein)
  • Timothy Law (Reed Smith)
  • Kim Marrkand (Mintz, Levin)
  • Ellis Medoway (Archer & Greiner)
  • Jeffrey Pollock (Fox Rothschild)
  • Patricia Santelle
    (White and Williams)

 

The FDA, 3D Printers and Medical Devices – How Do They All Fit Together?

Posted in Litigation Industry, Mass Tort Issues, Science

The world keeps changing quickly, and the changes include use of 3D printers to create things that are or may seem to be medical devices. How does that fit with FDA regulation, product liability and the like? Some thoughts and data on the topic are set out in an interesting February 5, 2015 post at Drug & Device blog. That post follows up on a recent Bloomberg article (paywall) on some related topics; that article was by some lawyers from Alston & Bird.