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William Warren says that insurance companies are abusing the legal system by appealing arbitration awards. |
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Second Thoughts On second thought, you might want to bite your tongue and take the cash. According to statistics compiled by Judge Kristena LaMar, plaintiffs are having a tough time in the courtroom--even when the insurance company has offered to settle for a substantial sum. For example: * On Jan. 30, 1997, a plaintiff who had surgery after a rear-end collision turned down a $24,200 insurance settlement and chose to go to trial. The jury award: $11,663. * On Oct. 25, 1996, a plaintiff with more than $17,000 in medical expenses turned down a $61,000 insurance settlement and ended up with a $4,500 jury verdict. * On Oct. 7, 1996, a plaintiff who suffered back injuries after being rear-ended turned down a $12,000 insurance settlement and the jury gave him zip. --MO |
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OSPIRG will soon begin a study of how tort-reform laws that favor defendants have affected injured people and the courthouse.
Most cases settle before arbitration or a trial. Of those cases that do go before juries, the defense has fared better on average 65 percent of the time in the last three years--either because the jury awarded the plaintiff less than the defense had offered to settle or because the jury decided the plaintiff should get nothing.
Lawyers are not allowed to mention an arbitrator's |
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Arbitrary Judgments By Maureen O’Hagan, mohagan@wweek.com After William Warren was rear-ended on the west side of the Ross Island Bridge in 1993, he experienced aches in his shoulder, back and neck. Now he's feeling the pain in his wallet. Like many people who suffer personal injuries, Warren ended up in front of a jury. But instead of giving Warren a big cash award, the jury slashed the compensation that had been awarded to him by an arbitrator. Warren's case is a good example of what some courtroom observers see as a troubling trend. A few days before Christmas 1993, Warren was approaching the Ross Island Bridge in his '77 Toyota when he was rear-ended while waiting at a stop sign. His car was barely scratched, but Warren, a citizen-involvement coordinator with Central Northeast Neighbors, began having wracking headaches and back and shoulder pains. Warren filed a lawsuit, but instead of going to court, he was sent to arbitration, which is mandatory in smaller claims such as his. In the arbitration process, the plaintiff and defense present their cases to a mutually agreed-upon arbitrator who listens to legal arguments, reads through doctors' reports and hears other evidence. Because there is no jury and no expert witnesses, it's much simpler--and cheaper--than a full-blown trial and helps unclog the regular court docket. "It's a means for people to cheaply get their disputes resolved quickly without going to court," explains presiding Multnomah County Court Judge Donald Londer. "When it works, it's a beautiful thing." But, as Warren's case shows, arbitration doesn't always do the trick. Warren argued that because the accident wasn't his fault, the other driver's insurance company should pay for his medical bills, his attorney's fees and his pain and suffering. The arbitrator agreed. In 1995, two years after the accident, he awarded Warren $22,000. Victory, however, proved elusive. Because arbitration isn't binding, Allstate appealed the arbitrator's decision to Circuit Court. Warren wasn't happy. "The damn thing was resolved," he remembers thinking. "Why are they wasting the court's time, the time of the defendant, my attorney and everybody else?" He soon found out. After a two-day trial, which included testimony from several doctors, the jury agreed that Warren was, in fact,injured in the 1993 accident. The jury also decided, however, that his injuries were only worth about $600. This didn't even cover his medical bills, much less the cost of bringing the expert witnesses into the courtroom to prove he was injured. "Needless to say," Warren's attorney, Dean Heiling, told WW, "there wasn't enough money to go around." Warren's medical experts were sympathetic and waived some of their fees, but he still feels that the system let him down. He's among a growing number of plaintiffs who find their pockets empty after an arbitration appeal. Although arbitration was intended to cut down on court time and costs, according to Londer, insurance companies have increasingly exercised their right to appeal. Londer perceived this to be enough of a drain on the court's time that he asked Multnomah County Circuit Court Judge Kristena LaMar to gather information on the phenomenon last spring. Between 1995 and 1996, the number of arbitration appeals doubled, according to LaMar's information. In tort cases, which include auto accidents like Warren's, the defense bettered its position 95 percent of the time when appealing arbitration awards in 1996. Because tort-reform legislation increased the maximum for mandatory arbitration from $25,000 to $50,000 for cases filed after February 1996, appeals may increase as these more-expensive claims work their way through the process. Larry Coady, a lawyer and arbitrator who analyzed LaMar'sstatistics, believes some insurance companies may be making a concerted effort to send a message to lawyers representing injured claimants. "Some insurance carriers have decided [to appeal] as a matter of principle to let the plaintiff's bar know this is the situation," he says. It's usually to the defense lawyers' advantage to drag out the proceedings, because plaintiff's lawyers are paid a percentage of whatever they win for their client--no matter how many hours they put into the case. "Insurance companies want to make the litigation process so expensive that most lawyers will fold rather than spending adequate time and money to obtain a fair offer for the injuries," says Larry Sokol, a longtime plaintiff's lawyer. "The insurance companies will often spend more to defend the case than it would cost to settle in order to intimidate future injured people from pursuing legitimate claims for injury." Defense lawyers say it's unfair to criticize them for exercising their legal rights. "My perception is that arbitratorstend to award more money than juries do," saysJohn Cavanagh, an attorney for Farmers Insurance. "Arbitration has turned out to be a kind of a windfall to the plaintiff compared to what juries give. What would you do?" The insurance companies' strategy appears to be working. "Now," says Sokol, "the majority of the juries are viewing the victim as the enemy rather than these insurance companies and large corporations. The pendulum has swung so far that people with legitimate claims are getting shut out." A close look at the evidence shows clearly that juries aren't the corporate-bashing dupes they have been portrayed as. "Judge LaMar's figures give statistical evidence of the hoax that insurance companies and their public relations people have perpetrated in Oregon and across the country," says plaintiff's lawyer Bernie Jolles. "That juries are going crazy and giving all this money away." |
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