The "drive-by" moniker is to be literally interpreted. Often, the named plaintiff never sets foot on the subject premises.

Graphic examples of this are the suits filed against fast-food franchises that contain boilerplate allegations of non-compliant shower facilities for customers.

When was the last time you showered at McDonald's?

Of course, there are some well-meaning plaintiffs who, while genuinely seeking to ensure compliance with the ADA, have allies in federal court judges who want to immediately know, at the first case management conference (and are entitled to immediately know), why a defendant facility is not in compliance with a law that has been in place for 15 years.

The usual answer--at least privately to defense counsel--is that the insured never gave the ADA much thought because there had never been any complaints (the old "I'll- cross-that-bridge" mentality that heightens all otherwise insurable risks).

Unfortunately, the truly aggrieved appear, at least to these defense lawyers, to be few and far between. The problem has grown to the extent that there is legislation pending which would attempt to prevent these lawsuits, or at the very least, control them.

For example, in California, where ADA lawsuit abuses are rampant, the Senate Judiciary Committee is considering the passage of new legislation, Senate Bill 855, which would require those who have not been harmed to provide notice and allow businessowners against whom the lawsuit was filed the opportunity to remedy any ADA violations before incurring any court awarded penalties.

Despite the recent onslaught of the "drive-by" trend, ADA lawsuit abuses have been in question for at least several years. Since 1999, two U.S. assemblymen representing districts in Florida (Reps. Mark Foley and Clay Shaw) have been introducing the "The ADA Notification Act" with each term of Congress. It would require any plaintiff to provide "notice of the alleged violation" and 90 days to correct the violation before proceeding with a lawsuit. Only if the defendant has not corrected the violation after that time period has passed can the plaintiff file a lawsuit.

At issue with respect to the pending legislation is whether or not the ADA already takes into account potential abuses. Many criticize the ADA as a vaguely-written law which can thereby give rise to abuse and, in view of the current conditions, has.

Others believe lawmakers should stay away from the issue and force entities such as the American Bar Association to start policing attorneys who are encouraging or participating in abusive lawsuits.

Regardless, businesses--in particular, smaller, more vulnerable targets and their employment practices liability insurance carriers (whose products do not specifically exclude third-party claims by customers)--can take proactive steps to protect against potential exposures. Available remedies under Title III of the ADA include compensatory damages, attorney's fees and orders of remediation with attendant penalties if the remediation is not completed in a timely manner.

First Step: Be Aware

For those carriers that do not already specifically exclude these "third-party" risks, the list of carrier precautions begins with re-evaluating whether traditional EPLI policies are the appropriate tools for addressing these exposures. This starts with recognizing that the original intent of "third-party" coverage in an EPLI policy was probably to protect employers for the acts of their employees toward outside vendors, customers, visitors and other third parties.

Query: Given the increasing number of these unforeseen claims, are underwriters doing enough to evaluate the risks?

Are they aware that under the "public access" provisions of the ADA, their insureds (who have 15 or more employees) can be sued by anyone in federal court who feels the insured's facilities are inaccessible to the disabled?

Certainly, this type of risk needs to be controlled "upfront" lest it evolve into something truly unmanageable.

Should this particular third-party risk be specifically excluded, or is it more appropriately covered under some general liability policy?

Step Two: Take Action

Carriers need to take a proactive role in educating not only their insureds about the risks under the "public access" portion of the ADA, but their underwriting and claims handling staff as well.

It is important to have competent ADA experts available--particularly those recognized as architectural "access" experts--to conduct audits of insureds' facilities and to identify any potential exposures. Qualified ADA/Access experts will also review a company's policies and determine how its employees--in addition to the general public--are impacted by the "public access" provisions of ADA.

They will offer advice as to the need for various communications tools to promote greater awareness of ADA and the "public access" provisions, as well as for employee training.

These experts will either conduct the training themselves or recommend a qualified professional resource.

Addressing Allegations of Violations

If a matter is already in suit, it is critical to have an ADA/Access expert promptly conduct an on-site investigation of the subject facility or premises to determine first, if there is merit to the claim(s) and second, whether there are additional violations not identified in the suit.

While many of these claims arise directly under the federal ADA, a qualified expert must still guide the insured through the myriad of state, local and municipal building codes that often make compliance difficult.

Once the expert produces a formal report, the insured and the carrier can go about determining how to resolve the suit. Despite the existence of compensatory damages for successful plaintiffs, attorneys' fees seem to be the principal component of any settlement negotiations.

An important consideration in negotiating any settlements is to ensure that the insured has ample time to do the necessary remediation.

Finally, the insured must understand that its failure to remediate any violations not addressed by the suit could jeopardize further coverage should future claims arise.

Preventing Alleged Violations

Directly on the carriers' side, there should be additional considerations when underwriting this type of third-party exposure. The authors, in conjunction with a nationally-recognized ADA/Access expert, have developed a checklist of underwriting criteria for ADA compliance.

Beyond relying on the checklist, carriers covering those categories of business with a high degree of interaction with the public (and thus, higher third-party exposure risks) should be especially heads-up when it comes to potential ADA "public access" violations. Examples of these types of entities include: security operations, property managers, entertainment venues, health care facilities, educational facilities, hotels, restaurants, membership clubs (i.e., health, country and private clubs), counseling centers and auto dealerships.

Closing Remarks

When the ADA went into effect in 1990, it was with the understanding that businesses would take the initiative and modify their facilities as necessary in order to comply with its "public access" provisions. Of course today, 15 years later, many organizations ranging from small businesses to large public sector facilities, such as schools and government buildings, still have not stepped into compliance with these provisions. Many are simply content to wait until an actual claim is made in court.

Some observers, in particular, those who advocate on behalf of the physically-challenged, estimate that a good majority of businesses (in excess of 6 million companies) are not in compliance.

With that in mind, and considering the fact that there are no built-in enforcement tools within the law, carriers and their insureds must be vigilant with respect to ADA "public-access" compliance.

o Ask to see site plans approved by the local architect.

o Ask whether there is a corporate parent which maintains and requires its franchises to follow a particular design standard that must be integrated into ADA compliance.

o Ask whether the insured has performed any recent renovations.

The ADA requires a certain percentage of the cost of renovations to be directed to remedying ADA violations.

o Determine the number of "public- access" filings in the jurisdiction where the insured is located and whether they share any common traits (e.g., same attorney, plaintiff, expert, etc.).

These are claims which, in most circumstances, can be prevented. When they are not, they can be very expensive--expensive for the carrier as a "covered" loss and expensive for the insured who must bear the cost of remediation in addition to any other fees or defense costs that may be incurred under its deductible.

A checklist of underwriting criteria for ADA compliance is available free of charge upon request to Mr. Voluck at [email protected].

Philip R. Voluck and Michael Kaufman are partners of the defense firm, Kaufman, Schneider & Bianco, LLP, in the Plymouth Meeting, Pa., and Jericho, N.Y., offices. The firm concentrates its practice in EPLI, non-medical E&O, D&O and construction Law.

Caption:

Many organizations have not stepped into compliance with ADA provisions. Instead, they are simply content to wait until an actual claim is made in court.