Corp Reform - Not Tort Reform

Yes, Walter - judges are supposed to uphold the constitution.

Walter Olson at Point Of Law attempts to use sarcasm to question court rulings in Illinois:

A right under the state constitution to unlimited damage awards, permanently and forever, no matter what elected state lawmakers may have to say about the matter?

PointofLaw.com | PointOfLaw Forum: Illinois judge strikes down med-mal caps

As Walter no doubt knows, this is the way the system is supposed to work.  No matter what state lawmakers may desire, the courts are not supposed to uphold laws that are unconstitutional.  The fact that (as Walter points out) this is the third time this has happened in Illinois shows two things:

1. The "reform" movement can't afford to buy a constitutional amendment to get their way;
2. A group of state lawmakers doesn't give a damn about the Illinois constitution.

There's absolutely nothing wrong with judges refusing to trample the constitution.  You would think that would be obvious, given the constitutional crises here and in Pakistan.

On a related matter, I just noted at TortDeform, insurers don't need "reform" to operate profitably in Illinois.

Technorati Tags: Walter Olson, Point of Law, Illinois, medical malpractice, insurance cartel, tort reform

But somehow, I don't see universal healthcare coming here in the near future.

Point of Law quotes an insurance VP as suggesting that universal health care will result in lower jury verdicts.  I'm not sure if I buy that, but it would absolutely result in fewer lawsuits.  Recall that Stella Liebeck's famous suit against McDonald's occurred because the company wouldn't pay her medical bills.

* Canadians, unlike U.S. citizens, have universal health care and are thus less likely to be ruined by medical claims (and are therefore less likely to have to sue to recover their medical costs);

PointofLaw.com | PointOfLaw Forum: Prediction: Canada won't see U.S.-style excesses

I have another suggestion as to why Canada (or other countries) won't see U.S.-style "excesses" no matter what happens to their tort systems: Other countries don't promote the worship of money quite like ours does. 

Technorati Tags: universal healthcare, torts, tort reform, Point of Law, Stella Liebeck

State Farm Acknowledges The Efficiency Of The Tort System

State Farm is dropping its rates in Colorado because they've returned to the "Pottery Barn" rule of "you break it, you bought it." 

State Farm Mutual Automobile Insurance Co., the largest auto insurer in Colorado, on Monday announced it is lowering overall insurance rates by 7.2 percent. The change becomes effective July 16.

The insurer estimates that the change will save its Colorado customers a combined $38.8 million per year. This marks the ninth rate decrease for State Farm since July 2003.

The company credited the premium decline, at least in part, to Colorado's change from "no-fault" auto insurance - where injuries in car accidents were paid regardless of fault - to a tort-liability system, where at-fault drivers are responsible for all the damages.

Source: The Denver Post - State Farm slates rate cut, citing tort-system savings

Odd that the evil, bad, inefficient tort system is saving consumers money, isn't it?

Technorati tags: State Farm, Colorado, Insurance cartel, tort system, tort reform

Enron-inspired policies net insurers billions

I haven't noticed attorney Chris Nichols' blog before, but it looks like one I need to pay attention to.  He's written an informative article that explains that A: juries never get to know about insurers or insurance policies, and B: that at the recommendation of a former Enron consulting company, insurers are denying more claims than ever... and making billions doing so.

As I'm getting ready for a trial, I'm constantly reminded that the "reason the case is going to trial" has more to do with the defendant's insurance company than anything else.  It's frustrating as an attorney fighting for justice because I have the burden of proof for the "facts" of the case, but what the jury really needs to hear, I'm not allowed to tell them.

Why?  Well, the insurance industry has effectively "gagged" anyone from telling the jurors why the case is going to trial.  Typically, the reason for that is that the insurance company who pulls the strings on the defendant, WANTS the case to go to trial, because they know that for every case that goes to trial, 99 just give up, and the insurance company gets to pay less than what is "fair and just" as the rules require...

Believe it or not, insurance companies have saved Billions of dollars since the mid 1990s, by improperly denying claims, and otherwise forcing litigation by paying far below the jury verdict average to settle claims. Frivolous defenses to legitimate claims have resulted in an increase in litigation, against people insured by these companies. This is part of a deliberate claim handling program implemented by McKinsey & Company, the same consulting firm that set up Enron's business model, at many of the nation's largest insurance companies. See "Record Insurance Profits" Article...

McKinsey & Company counted on this when they told Allstate Insurance in the mid 1990's to quit treating people with “Good Hands” and instead treat them with “Boxing Gloves.” When Allstate forced more litigation and posted record profits, the rest of the insurance industry followed their lead. It is now standard operating procedure in the insurance industry to spend multiple times what a reasonable settlement would be to fight the claim, simply to prove to injured people and their lawyers that filing a claim for injuries is more trouble than it is worth. Read a Transcript of Anderson Cooper's Interview with one of Allstate's Victims

Source: North Carolina Trial Law Blog: The Truth That Juries Never get to See

He's absolutely right about spending multiple times what a claim is worth.  They aim to intimidate attorneys into settling cases for less than the cases is really worth, rather than the time-and-money consuming trial process.

Technorati tags: Allstate, Enron, insurance, insurance cartel, improper claims denial, Chris Nichols

822 Paid Claims in a Year = A Malpractice Crisis?

I was surprised to read the following statistics in an article in the Naples Daily News:

A state-by-state examination of medical malpractice claims paid in 2006 shows that Florida’s average payout was lower than the national average, resurrecting the debate about the merits and pitfalls of tort reform that is expected to change the malpractice climate in the state...

Florida’s average claim payout, whether by settlement or jury verdict, was $241,800 last year while the national average was $308,600, according to the Kaiser Family Foundation...  [So why does Florida need damage caps? - Justinian]

Insurance companies paid a total of $198.7 million arising from 822 paid claims in Florida last year, according to Kaiser. That’s 14.7 claims paid for every 1,000 physicians in the state...

The numbers for Florida come as no surprise to Orlando trial attorney Scott McMillen, who points to a $500,000 cap on noneconomic damages approved by the state Legislature in 2003 after pressure by then-Gov. Jeb Bush.

"The Legislature in Florida has been steadily chipping away the rights of Florida consumers," he said. "It is resulting in smaller settlements and more cases going to trial because the defendants have no fear. The insurance companies know the worst it will be is $500,000 — so why settle."...

Source: Fla. below national average in amount of paid medical malpractice claims

I don't see how 14 claims per 1,000 physicians, with an average payout of $241,800 can constitute a malpractice crisis.  Especially since Florida fares better in the study than many other states.  Seems to me that Florida malpractice insurers are gouging doctors and blaming lawyers.  Of course, that's old news.

Technorati tags: Florida, medical malpractice, malpractice epidemic, Naples Daily News, Insurance, insurance cartel, tort reform

Real Tort Reform in Pennsylvania Introduced

 Hot off the wire, it looks like Senator Greenleaf has introduced a real tort reform bill in Pennsylvania.

PHILADELPHIA, May 8 /PRNewswire-USNewswire/ -- The Pennsylvania Trial Lawyers Association (PaTLA) today welcomed legislation recently introduced in the state legislature: a Senate bill that levels the playing field for victims of bad faith on the part of insurance companies and a House bill designed to help consumers make more informed choices when purchasing automobile insurance.

Senate Bill 745 introduced by Sen. Stewart Greenleaf would allow juries to determine fault and award damages in bad faith insurance cases. Currently in Pennsylvania, only a judge can decide bad faith, while in federal court juries make the decision in such cases. "If a jury is competent enough to decide cases involving negligence or criminal conduct-and it is--we should have confidence in them to make a determination of whether an insurance company was wrong in denying or stonewalling a claim," said Ruben Honik, President of PaTLA. "The founding fathers knew the jury system would work 200 years ago and it works today."

Source: State Trial Lawyers Applaud Bills Protecting Rights of Pennsylvania Consumers - - insurancenewsnet.com

Count on the insurers fighting tooth and nail against being forced to endure a fair trial.  And also count on the "reform" movement claiming this bill is bad public policy and either a handout or a payback to the trial bar.

Cross-posted to TortDeform 

Technorati tags: Pennsylvania, bad faith, SB 745, PATLA, tort reform, Stewart Greenleaf, insurance

The insurer is always right - Correction

Attorney Richard Scruggs uncovered somewhere between 5,000 and 15,000 pages of confidential State Farm documents that may prove the company falsified engineering reports and engaged in other illegal activities to avoid paying legitimate Katrina claims.

Through legal wrangling, Scruggs was ordered to return these documents and he won't be allowed to use them to benefit his clients.  Scruggs contacted the Attorney General and provided the A.G.'s office with the documents, and for doing so he may be held in criminal contempt.

Ted Frank (Not Walter Olson, as I mistakenly posted) at Point of Law (who has previously bashed Scruggs) seems to think the real story is that Scruggs may have violated a protective order:

David Rossmiller continues to have good coverage of E.A. Renfroe & Co.'s seeking criminal contempt charges against Scruggs for his violation of a protective order. Earlier: Mar. 19 (and Rossmiller Mar. 6).

Source: PointofLaw.com | PointOfLaw Forum: Dickie Scruggs contempt hearing over Rigsby sisters' documents

Predictably, both Point of Law and Overlawyered are more concerned with the possible misconduct of one attorney (who Walter claims is a "zillionaire") than whether State Farm falsified documents to avoid paying legitimate claims.  I'd give much more credibility to those guys if they went after crooked corporations with even half of the zeal of their persecution of successful trial lawyers.

Technorati tags: Richard Scruggs, Dickie Scruggs, Walter Olson, Point of Law, Tort Reform, State Farm, Katrina

Illinois Malpractice Insurers Refuse to Pass Savings to Doctors

State passes tort "reform" measures to lowe malpractice premiums for doctors.  Largest medical malpractice insurer posts record profits and gives raises to its executives.  Doctors don't see rate reduction.  Today it's happening in Illinois, but that's neither the first nor last state where insurers put the screws to the doctors:

The state's biggest malpractice insurer has posted its biggest profit since the 1980s, increasing pressure on the company to cut rates that have surged in the past five years.

Doctors who lobbied alongside ISMIE Mutual Insurance Co. two years ago to persuade Illinois lawmakers to limit jury payouts for malpractice victims are still awaiting a break from lofty premiums. ISMIE's $50-million profit and CEO Alexander Lerner's $1-million pay in 2006 puts the rate issue back in the spotlight.

"They're making a lot more money now, and we still haven't seen our rates go down," says Ellen Brull, a partner at a family practice in Niles who has seen her base insurance rate almost double since 2003 to $19,373 last year. "I would expect major reductions."

Source: Chicago Business News, Analysis & Articles | Doctors' insurer sees profit soar | Crain's (Free subscription required.)

If we're passing "reform" measures to get lower insurance premiums, why on Earth don't we require insurers to lower their premiums at the same time? 

Technorati tags: Illinois, medical malpractice, ISMIE, tort reform, Alexander Lerner

Insurer Profitability

Cyrus has more coverage at TortDeform.com

Texas Tort Reform Results? $2.8 Billion in Insurance Profit

I came across the website for the Center for Economic Justice, a Texas-based organization that is trying to help minorities, the poor, and to regulate the insurance industry. They have a report that talks about what really happened as a result of Governor Bush's tort reform. Here's a blurb from their website:

Our reports have established that insurers earned over $2.8 billion in windfall profits in 1996-1998, and that consumers are not reaping the promised benefits of substantially lower insurance premiums. This windfall to insurers has been realized at the expense of consumers, and we continue to expose insurers’ unjust enrichment at consumer expense.

Check the site out and join the group - it's free.