I read a number of articles where the insurance industry calls Louisiana’s judicial system a “judicial hellhole.” This despicable suggestion is offensive. But, the insurance industry is doing more than name calling. It is advancing an agenda. For this agenda to work, the insurance industry needs to market its propaganda. If insurance companies are good at anything, it is marketing. You cannot watch television without seeing insurance propaganda such as, like a good neighbor, being in good hands, Flo, and the silly lizard. Now, the insurance industry is pushing propaganda about Louisiana being a “hellhole.” Insurance companies need us to believe we have a “hellhole” because they are pushing to raise their prices in Louisiana. They need a compelling reason take more of our money for the same old product. This is what the “hellhole” propaganda is all about.
The insurance industry is playing the blame game over the “hellhole” to accuse other for increasing insurance rates. The insurance industry and the politicians, who carry its water point the finger at trial lawyers and the people they represent. This claim is a myth that has been around and repeated for so long, most accept it as true. As a trial lawyer, who represents people, I can assure you this myth is false. Please allow me to explain.
Let’s consider what happens beforea person hires a lawyer. A person is involved in a wreck. His damaged car needs to be towed and stored until it is repaired. He needs medical attention and that leads to the emergency room or doctor visits, which leads to medical tests and medication. He misses work because he does not have a car, or he must see a doctor.
In Louisiana, the politicians give the responsible party’s insurance company 14 days to “initiate property loss adjustment,” which means to inspect the car and get the ball rolling on the repairs. The insurance companies rarely (if ever) do this within this timeframe. The government gives the insurance company 30 days to pay the property damages. More often than not some (but not all) insurance companies pay the shop to repair a vehicle within this timeframe. The law requires an insurance company to pay medical expenses within 30 days, but this rarely happens.
In the face of liberal laws favoring insurance companies, the victim of a car wreck is without a car and has a number of medical bills and hours of lost wage. This leaves the victim with 2 choices: (1) walk away and give up or (2) hire a trial lawyer. When the victim refuses to get taken advantage of and he hires a trial lawyer, the insurance company cries about Louisiana’s “judicial hellhole” and “greedy trial lawyers.” In actuality, the insurance company is really saying: “we should be able to take advantage of the people in Louisiana and never be made to accept the consequences of trying to do it.”
When the victim of a wreck hires a trial lawyer and a lawsuit is filed, the insurance companies and the politicians they control claim Louisiana has a “historically challenging legal environment” and a “judicial hellhole.” They suggest all the lawsuits filed against the insurance companies are the result of frivolous claims, greedy trial lawyers and people looking for jackpot justice. In reaching this assumption, the insurance industry and its pundits do not acknowledge the people of Louisiana are forced to file lawsuits because of the frivolous and greedy tactics by the insurance company. Stated another way, if insurance companies treated our people fairly, there would be no lawsuits. If there is no need for a lawsuit, insurance companies do not need to worry about our justice system.
When lawsuits are filed, the insurance companies allege false defenses. They make wild accusations in an effort to cast blame on the victim of the wreck. Louisiana law requires insurance companies to not misrepresent facts or insurance coverage, but they are uninhibited by these laws. In 18 years of practicing law, I never heard of an insurance company answering a lawsuit by admitting, “we are at fault, we owe the money and we agree to pay it.” Rather, they dream up false claims, spend significant time and money trying to “dig up dirt” to embarrass their victims and they hire “experts” who will say whatever they are hired to say. The lawyers representing insurance companies usually charge $300-$500 an hour and bill many hours pursuing trivial issues. This means the insurance companies are paying high fees for the creation of false defenses and searching for possibly embarrassing information on wreck victims. If insurance companies choose to be fair to victims of car wrecks and not to win at all costs, there would be far less lawsuits.
Insurance companies also pay certain doctors to provide opinions that victims were not hurt or hurt that much from the wreck. Most of the time, these “doctors” develop and render these opinions by only reading some medical records. They often do not examine the people, they do not speak with their treating physicians. Would anyone allow a doctor to operate on you when the doctor simply reviewed some medical records, never met and examined you, and did not consult with your treating doctors? I suspect most (if not all of us) would say, “absolutely not!” But, in the insurance world, they buy opinions from doctors under the same circumstances and have the doctor testify that he knows more about the victim’s injuries than the victim and his treating doctor. Insurance companies pay tens of thousands of dollars for these “opinions” from these types of doctors and they pay more money to its lawyers to get it to work. Again, the insurance company chooses to spend money in this way over paying the actual claim. The insurance companies spend a lot of money doing this and it wants to raise our insurance rates to defray this cost.
The next litigation tactic employed by insurance companies is to stall, delay and contrive the litigation process. The purpose of this is to wear down the victim in the hopes he just gives in or gives up. So, they pay untold sums of money in attorney’s fees and court cost to come up with ways to delay the cases. During these delays, the insurance company sends low-ball offers to settle the case. The insurance company now wants an increase in their rates to pay for these delays.
Finally, when the victim gets his day in court, and there is a judgment in his favor, the insurance company almost always decides to appeal. This decision delays the case even more. They pay its lawyers to appeal the case. Appeals are expensive. During the appeals process, usually the insurance company sends an offer to settle the case. The offer is always far less than the amount of the judgment. They take full advantage of the appeal process and the time it takes. Again, we should not need to pay more money for insurance because insurance companies decide to appeal cases that, in all fairness, should have been settled before a suit was filed.
As you can see, the insurance company has complete control over the claims process. It alone controls its actions and decisions before a lawsuit is filed, during the litigation case and after the case is decided. When a judge or jury takes that control away from the insurance companies, they cry and complain about Louisiana’s “judicial hellhole.” When the insurance industry accuses Louisiana of being a “hellhole,” it is saying Louisiana’s judges and citizens, who serve on juries, are to blame. I do not understand why the insurance industry accuses our judges and citizens of making up a “hellhole” and then sticks its greedy hand out and demand more money from us for insurance. Our judges and jurors are not participants in a “hellhole.” They are good people who look out for their community and neighbors.
Louisiana is not a “judicial hellhole.” Our justice system is nearly the same as any other State in the Union. The courts work the same as other States. The judges decide cases like other judges in the Nation. Jury duty is like the other States. The systems cannot work without people of our community, who show up for jury duty. When the insurance companies are complaining about the justice system in Louisiana, they are complaining about the peoplewho make the justice system work. They are accusing our judges and jurors (every citizen in Louisiana) of making the “hellhole” possible. The insurance industry says we the people are the demons in the “judicial hellhole.” At the same time, the insurance industry blames us for being part of the “judicial hellhole,” and they demand we pay them more money.
Information and Evidence
There will be some who do not agree with this article. My words may be judged harshly because I am a trial lawyer. I welcome and respect debate. To those who disagree I ask, “what evidence do you need to change of your position?” If we are to explore this issue together, we may need to know more about the financial conditions of the insurance companies. At a minimum, the insurance companies should show us:
- Gross profits, meaning the profits made off of the people and businesses of Louisianabeforethe insurance companies pay their executives exorbitant salaries, company retreats, company jets, company bonuses, “book cooking,” and all other “write-offs” enjoyed by the 1%;
- The total cost of needlessly defending cases that should have been settled before suit was filed or before a judgment is rendered by a judge or jury;
- How much money the insurance companies make from denying or delaying claims that should have been paid;
- How much money the insurance companies make when car wreck victims give-in or give up from frustration over the claims process;
- The profits insurance companies make by having autobody shops replace car parts with used or non-manufacturer parts on cars damaged in wrecks;
- The profits insurance companies make when they refuse to provide car wreck victims with a rental vehicle while their cars are not operational;
- The profits insurance companies make when a car wreck victim uses his own medical insurance to pay for medical treatment for injuries sustained in a wreck;
- The money insurance companies save by refusing to pay for medical treatment and negotiating the payments when those accounts are “bad debts,” which hurt credit scores of the victims and cheat medical providers and hospitals out of their money;
- The profits insurance companies make when a car wreck victim uses his own automobile insurance to pay for property damages sustained in a wreck;
- The sums of money insurance companies keep by refusing or reducing the lost wages of people who were a victim of a car wreck;
- How much money the insurance companies spend on creating, producing and running commercials and other advisement in the State of Louisiana;
- How much the insurance industries spend on lobbying politicians and bureaucrats in Louisiana, including all non-cash contributions like trips/vacations for “seminars,” meals, gifts, drinks and other benefits;
- How much money do insurance companies contribute to political campaigns and politicians, their family members and friends in the State of Louisiana, including all non-cash contributions such as trips/vacations for “seminars,” meals, gifts, drinks and other benefits;
- How much money do insurance companies contribute to political campaigns and politicians from the State of Louisiana, such as congressmen, senators, and other bureaucrats and their family members and friends, including all non-cash contributions such as trips/vacations for “seminars,” meals, gifts, drinks and other benefits;
- How much the insurance industries donate to the American Legislative Exchange, Chamber of Commerce and other pro-business/anti-justice organizations, including all non-cash contributions and other benefits;
- How much money the insurance companies spend on public relations and image consultants and these efforts in Louisiana;
- What is the dollar amount of tax breaks and financial incentives these insurance companies enjoy in the State of Louisiana and the United States for doing business in Louisiana;
- How much do insurance companies spend on lawyers, expert witnesses, doctors, court cost and litigation expenses to delay or defeat insurance claims and cases;
- All gains and losses resulting from investments by the insurance companies;
- Disclosure of the all investments and business dealings of the insurance companies;
- Disclosure of all “cash” payments/donations made by the insurance companies and any person or entity acting on their behalf;
- A disclosure of all “seminars” or educational programs where judges, politicians and bureaucrats were targeted or selected to attend, the cost of the seminar and programs and the expense/cost of those who attended, including airfare, hotel fees, cost of meals and drinks;
- What is the total annual revenue of all premiums paid by the people and businesses of Louisiana; and
- What is the total amount of insurance payments to victims of car wrecks in Louisiana before a lawsuit is filed;
- What is the total amount of insurance payments to victims of car wrecks in Louisiana after a lawsuit is filed;
- How many claims are made in Louisiana and the percentage of those claims that are paid by the insurance companies.
With this type of information available to those who will be affected by any proposed increase in insurance rates, we can evaluate the real need and intention of the insurance companies. Without this information, we cannot know whether the insurance companies are victims of the alleged “hellhole” or are motivated by a never-ending thirst of corporate greed.
Prescription in Louisiana
In an article published on February 20, 2019, and written by Lee Zurick and Cody Lillich, Zurick: Is Louisiana’s ‘legal hellhole’ to blame for sky-high auto insurance rates?, they reviewed the number of lawsuits filed in California, Texas and Florida and compared them to the number of lawsuits filed in Louisiana. They concluded the number of lawsuits filed in Louisiana “is higher than Miami and Austin.” However, their analysis is faulty because of the failure to account for how the legal time delays permitted in those States work to prevent the need to file a lawsuit.
In Louisiana a lawsuit must be filed within one year from the date of the wreck. If a lawsuit is not filed within this period of time, the victim of the wreck loses his right to seek and obtain justice. The insurance industry wanted this law because it works against the victims of wrecks. However, in California and Texas, a victim of a wreck has 2 years to file suit. In Florida, a person has 4 years to file suit. These more civilized and reasonable periods of time allow more time for the victims of a wreck and insurance companies to resolve their dispute. When the dispute is resolved, there is no need to file a lawsuit.
A Louisiana law that favors the insurance industry requires a lawsuit to be filed within one year from the date of the wreck. This is the shortest time period in the Nation on these cases. If a lawsuit is not filed within this timeframe, the victim of the wreck cannot seek justice. Often insurance companies delay on paying a claim in the hopes of crossing the one-year mark. This law makes lawyers and victims file lawsuits as soon as possible because the consequence of it is drastic. In response to this law, the insurance companies point to the number of suits that are filed against them. However, the law requires victims of car wrecks must file lawsuits within a year.
So, when the insurance industry complains about the number of lawsuits being filed in Louisiana, it is truly complaining about the result of a law it created. But, the one thing we do hear in all the bellyaching by the insurance industry, is it asking the lawmakers of Louisiana to expand the 1-year period of time in which a victim of a wreck can file a lawsuit. The reason we do not hear such a request is because the insurance industry wants all the advantages of the 1-year law and to make more money off of us in the process.
Kill all the Trial Lawyers
Finally, the insurance industry faults trial lawyers as another reason why it wants to make more profits and increase our insurance rates. Simply put, the insurance industry does not want people to have access to trial lawyers. But why? Before we explore this issue, we should determine if insurance companies have the benefit of lawyers or people with special training when they deal with a victim of a car wreck. After all, to be fair, everyone should be on a level playing field, right?
When a person is involved in a wreck and he makes a claim with an insurance company, he will encounter a well trained person, called “claims handlers” or “adjusters.” The adjuster works for the insurance company and is taught how to ask questions that are designed to manipulate the victim’s story. These highly trained people are part of a team of people, included insurance lawyers. Adjusters meet with the insurance company’s team on a weekly basis and discuss how to reduce the exposure of the insurance company in each and every claim. They have one goal: stopping and minimizing the insurance company from paying money.
The adjuster’s job is to find a way to defeat, delay or destroy the claim. One tactic employed by an adjuster is called the “one more rule,” which means the adjuster never has enough information and almost always asks for “one more” piece of information. Another tactic is to find a way to blame the victim for his role in the wreck. Another ploy is to minimize the expenses associated with the wreck. The adjuster relies on his medical training provided by the insurance company and concludes various injuries, medical tests, medical diagnoses, medical treatments or medications were “not related to the wreck.” Also, relying on his insurance company training, the adjuster will look at a photograph of the wrecked vehicle and conclude the victim was not hurt or it is not responsible for all of the property damage. The adjuster almost always comes up with a scheme on what the victim did not do to minimize his damages and refuse to pay for anything after that time.
The playing field is not level when a person deals with an insurance company. There is nothing fair about it or the process. The victim of a wreck does not have specialized training and a team of professionals to create ways to make the claim favorable. Usually, the victims are hardworking and honest people, who just want to do the right thing and be fair. On the other hand, insurance adjusters do not share the idea of honesty and fairness. They work for a company and to survive and flourish within it, they must act with only the company’s financial and best interest in mind.
When a victim of a wreck deals with the insurance company, the insurance industry unquestionably knows it has all of the advantages andthe victim has all the disadvantages. Of course, the insurance industry wants to keep the advantages and that is why it claims trial lawyers are to blame for an increase in insurance rates. Stated another way, the insurance industry does not want a victim of a wreck to know his rights and enforce them. When there is a fair verdict, insurance companies accuse Louisiana of being a “hellhole.”