Congratulations, you've settled your personal injury case. But here comes the IRS. Uncle Sam wants his cut. No one enjoys tax season, except accountants and maybe tax lawyers. Just ask rapper and producer Dr. Dre: “The only two things that scare me are God and the IRS.”
The phrase “winning on a technicality” is generally a short-hand way of expressing disgust at lawyers and the entire legal profession in general. Hearing that someone won his or her case “on technicality” basically means that the lawyer found some creatively underhanded way of stretching the law to win the case even though the client was clearly morally wrong. And when insurance companies win on technicalities, people feel even more strongly, because many people don't like insurance companies to begin with.