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What You Should Know about Professional Service Bills for Small Claims Court

In many cases that end up in small claims court, after the clients received services, they decide they didn’t get what they paid the professional for, or their great-grandpa, who hasn’t left the nursing home since 1999, told them that the price they were charged was outrageous, so they aren’t going to pay the balance of the bill due and owing.

The fact that you may not have gotten the result that you wanted does not necessarily mean that the professional didn’t perform the service in a competent manner and as they agreed to do it.

Lawyers and accountants

Lawyers and accountants generally have retainer agreements or letters of engagement signed by the client, which spell out the services to be rendered, the hourly rate being charged, and other terms of the understanding. Many states require these professionals to have a written agreement with all clients.

If there’s no state rule, look for a code of conduct issued by the professional association such as a bar association or accountant’s organization. Your court case will likely hang on whether or not the professional suing you has documentation:

  • If the professional produces the written agreement and her billing records and work product records, it’s extremely likely the professional will prevail and collect what is due her. After all, how are you going to establish that she didn’t do what the documents show she did?

  • If the person suing you doesn’t have a written agreement, hourly records, and work product, in all likelihood she’ll have a tough time collecting, because courts tend to believe that professionals have an obligation to inform their clients as to the nature, the extent, and the cost of the services rendered. And if the professional had kept these records, there would be no basis for dispute.

    If you’re the professional suing for a fee and don’t have the required documents, don’t expect a court to be too sympathetic. After all, you’re the professional and should be the one taking steps to insure the client knows what services you intend to perform and how much it’s going to cost. You should take steps to protect your fee.

In many states, if you owe a lawyer money, the lawyer has to offer you the option of having the matter resolved through fee dispute arbitration or mediation. Arbitration and mediation are attempts to resolve the matter outside the court system. If the issue isn’t resolved, or if either side wants to challenge the finding from that process, generally you‘re provided the right to have the dispute heard in court.

In the computer age, there is no excuse not to put all agreements in writing and keep billing records. In small, one-or-two-person firms, the professional is usually so consumed with keeping up with the work, that having retainers and billing records diverts you from that work, but you’re the professional and the client isn’t, so it’s up to you to protect yourself.

Doctors

Doctor bills present a different issue. Did you have insurance? If you did, why wasn’t your claim paid? Did the doctor agree to accept whatever she received from your insurance or did you agree to pay the difference? Sometimes the issue is one of who failed to provide the carrier with all the information to process the claim.

In any case, check to see if you agreed to be responsible for the bill and the doctor only consented to assist you in processing the claim.

Unless the doctor agreed to accept only the insurance reimbursement, you may be stuck with the bill. However, if the doctor agreed to accept the insurance amount and wasn’t paid and is now looking to collect the over-the-counter rate from you, you probably can convince the court you should only have to pay what the insurance carrier would have paid.

In other words, the doctor agrees to accept the insurance rate of $100 but when she wasn’t paid, she charges you $150. She’s going to have to justify why there’s a difference.

If children are involved, as the parent you’re responsible for the bill, in almost all cases — courts don’t make minors pay.

Courts also don’t like to find out that dad isn’t paying because mom has custody and didn’t tell him that junior needed medical treatment before she sued him for nonpayment. Small claims court isn’t for matrimonial disputes, and professionals don’t particularly want to be dragged into your family drama.

Another quirk of human nature is the refusal of people to provide additional copies of documents to the doctor to process the bill. “I gave them that information” really isn’t a good excuse for wasting court time to hear a judge say, “Obviously they didn’t get the information or it was lost. Give it to the doctor again so she can get paid by the carrier and not by you.”

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