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Is the Jury In?

Ask any industry professional, from the board room to the claim handler, What is one of the top two or three largest problems facing the industry? More often than not, the first answer will include

By Michael H. Adams | Updated on September 30, 2007

Ask any industry professional, from the board room to the claim handler, What is one of the top two or three largest problems facing the industry? More often than not, the first answer will include litigation. Whether it is medical malpractice or the current debate over whether to retain the state’s auto personal injury protection insurance, the litigation process is a cornerstone of any insurance law. And when that section of the law is changed by court decisions and the creativity of lawyers to make end runs around the litigation process, it quickly becomes the centerpiece of any legislative action. From the industry’s perspective, litigation leads to higher costs and a breakdown in executing the law, all of which eventually translates into higher policyholders’ rates.

Workers’ compensation has always been sensitive to changes in litigation, which many point to as the driving reason for the need of the 2003 reforms. Now those law changes are being given credit for helping to reduce rates and making the system more self-executing. A recent study conducted by the National Council on Compensation Insurance has found that changes made in the litigation process has had a positive effect in reining in attorneys’ fees and settlements. While the council cautions that those trends may also be influenced by other factors, the council’s findings do provide evidence that the legislative intent of the law is closely matching up with its practice.

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