In a prior diary, I referenced an editorial from an Indiana newspaper titled “Looking after accident victims’ interests - Legal funding helps clients stand up to low-ball insurers”.
http://www.journalgazette.net/...
A US Chamber of Commerce “model bill” has been debated in committee in Indiana, and will likely be pushed hard by the Big Insurance lobby in 2014. Indiana is one of a number of battleground states where the “Lawsuit Lending” industry is fending off attacks from the US Chamber of Commerce, its subsidiary The Institute for Legal Reform (ILR) and those under the influence of Big Insurance (i.e., State Farm, Allstate, USAA, etal). A national conference of legislators focused on insurance (NCOIL) debated this issue at a conference in Nashville this November, and the US Chamber/Big Insurance’s aggressive attack will likely continue in 2014 with model bills these parties – through surrogates – intend to introduce in various states, with Indiana, Illinois and Tennessee being states where bills are already floating around. NAMIC, PCIAA and NFIB are a couple of the “usual suspect” surrogates for the US Chamber and Big Insurance.
There is one provision in these model bills that is blatantly self-serving to the Insurance Industry. It can be found in this bill that was introduced in NCOIL, which mirrors the “model bill” the US Chamber and Big Insurance introduced throughout 2013 in various states:
http://www.ncoil.org/...
As described in the preamble of this “model bill”:
“the Bill provides for much-needed disclosure regarding consumer lawsuit lending transactions. It requires a plaintiff who has received consumer lawsuit lending to produce in discovery any documents he or she may have shared with the consumer lawsuit lender, and to file with the court a copy of the lending contract.”
I am sorry, what??? You are a consumer, you have been injured, you have been forced to sue your own insurance company that you paid premiums to over the last 15 years, and never needed until now. The Big Insurance companies have millions of data points on injuries similar to yours – including past jury verdicts, and understand in depth what the established market value of your injury is. They tried to convince you not to retain an attorney when you first called to report your claim, but their conduct forced you to retain an attorney who will take 1/3 of your case value as compensation for his or her services. They have your demographics, they know whether you are under financial pressure, they know if you are old with mortality concerns, and they have millions of data points on when prior customers caved in and settled that they have crunched using the universal claims adjudication software Colossus (developed in the 1990s with advice from high power “white glove” management consulting firm McKinsey & Co). And they want you to be forced to tell them proactively that you have obtained financial assistance from a third party, and turn any document over that you provided to the legal funding company to the insurance company you were forced to sue? With a straight face, they promote this as a necessity to “level the playing field”.
Now what I am about to say should be as obvious as knowing that gambling takes place in casinos – the playing field is not level! It is extremely lopsided and tilted in favor of the Big Insurance companies. The Big Insurance companies have the advantage of Time, Money, Information and Power.
Time is the friend of the Big Insurance company that gets to reinvest its policyholders’ premiums until the day it has to make downpayments, but time is not the friend of the consumer who has been injured and needs cash today to get by.
Money is the friend of the Big Insurance company that gets to sit on its piles of cash, but not the friend of the consumer who has bills to pay today
Information is the friend of the Big Insurance company that has millions of data points at its disposal and PhD statisticians to figure out how best to manipulate consumers into taking lowball values as compensation for their injuries, but not the friend of the consumer who has never been in litigation before and has no perspective on the legal system’s historical valuation of injuries.
Power – the Big Insurance companies have it, the consumer does not. As Stan Lee, the founder of Marvel Comics, likes to say, “Nuff said”.
This provision can only be interpreted as a poison pill implanted in a “model bill” under the guise of being for the consumer, when this provision is blatantly for the benefit of the Big Insurance companies and would only serve to intimidate consumers and dissuade them from taking advantage of the lifeline that Legal Funding companies might otherwise be able to provide.
The US Chamber says this is fair, because now everyone’s cards are out on the table and everyone can see what everyone else has got. If that was actually true, the Big Insurance companies would need to reveal to consumers what they have reserved internally for the consumer’s claims, and provide the consumer with their internal datapoints as to the true value of the injury.
While access to legal funding cannot come close to helping “level the playing field”, it hopefully helps the consumer hang on a little longer despite the consumer’s limited bargaining power against large insurance interests. And hopefully legislators in Indiana, Tennessee, Illinois and beyond will see this US Chamber “poison pill” in its “model bill” for what it is.