Eisenhower had appointed California Governor Earl Warren as Chief Justice, an appointment he later termed his “biggest disappointment.” In 1979, Bob Woodward, of Watergate fame, published a book detailing the background of the then-current Warren Berger Court, called The Brethren: Inside the Supreme Court. I was hooked and became a Court buff. At that time, there were no women on the court, although President Johnson had appointed Thurgood Marshall in 1967, breaking the history of the Court consisting only of nine grumpy White Anglo-Saxon Protestants (WASPs).

In the 1920s, one such Justice was so prejudiced that he refused to have his picture taken while sitting next to Justice Louis D. Brandeis, a Wilson appointee, who was Jewish. Brandeis (for whom Brandeis University is named) and Oliver Wendell Holmes were the “liberal wing” of their day, voting for human or civil rights over property rights. It was a collection of stubborn old Justices that Franklin D. Roosevelt encountered when he became President, and all of his early Depression-fighting programs were ruled unconstitutional. He remedied the matter by loading the Court with his own Justices, including Felix Frankfurter and Hugo Black.

Proud to Be a Luddite

In a pros-and-cons print debate a number of years ago with former co-columnist Kevin Quinley, with whom I shared a podium with at a Florida claims conference in June, I assumed the position of Luddite. I cited the Amish, who maintain that technology is like candy: the more you get, the more you want. While everyone else is rushing off to get the latest, I save my money until the best is perfected. These words are written on a computer, with facts and names verified by Google, and submitted via e-mail. Let's consider the frenzy over the recent release of the iPad. Doesn't everyone want the latest gizmo? Well, not I.

When it comes to most technology, I'm with old Ned Ludd. In 1779 Ned, a fine half-witted Englishman, took an ax to the steam-powered woolen looms or knitting frames in his Leicestershire textile factory, protesting that the enslaving Industrial Age had brought about a loss of the cottage industries of the past, creating unemployment and reduced earnings for workers.

The new machinery led to the world Dickens described in his novels. It occurred in America, too, and any attempts at organizing labor that led to court cases usually ended up before those nine old guys on the Supreme Court, with the factory owners claiming easy victory over the demands of depressed and overworked, mostly immigrant factory employees. Consider all of the labor strikes of American history: the Chicago Haymarket Riots, the Pullman Strike, the Homestead Strike against Carnegie, and similar labor protests. We forget too often that in the 1920s and 1930s, the Communist Party movement almost brought to America what it had brought to Russia in 1917.

Power Is in the Middle

Time and again in its key decisions, the Supreme Court has shown that the most powerful position is that of the middle. The most liberal or the most conservative votes are balanced by the centrist votes. Currently the Court leans to the right of center. Unless two or three of the conservatives also retire in the next few years, it is likely that the balance will remain lopsided. John Paul Stevens was appointed by President Gerald Ford, who thought he was appointing a conservative. However, time does swing that pendulum, and time put Stevens on the left. As the ranking senior Justice, he was able to influence some of the votes.

Such is the case with claims. Those who buy into the idea that technology can do it all — “the scalpel performed the surgery” — forget that even in robotic surgery there is a human being, namely a well-educated surgeon standing behind that Ozian curtain, pulling the levers and strings. For example, in the March 22, 2010, issue of National Underwriter, Tom McCarthy and Randall Smith, executives with Decision Analytics, stated, “By deploying technologies such as consensus modeling and knowledge base creation, insurers will gain more control over the process and achieve a higher level of consistency in managing claims successfully.”

The alternative they suggested was “starting from scratch with a new generation of novice adjusters…” What they seem to be saying is that technology can replace the adjuster. I don't think so.

Technology is a great tool, but those on that side of the pendulum who think that technology has replaced the old-fashioned hard work of getting out in the street and gathering the facts should look at the results: $30 billion a year lost to the P&C industry because of fraud, according to the Insurance Information Institute. For those old enough to remember the adjusting practices of the 1960s and 1970s, when both company and independent adjusters were on the street digging into the facts of a loss, the pendulum went too far. Maybe we need to find some middle ground where technology is correctly viewed as a tool, just as the telephone and the typewriter were when they replaced carrier pigeons and quill pens, tools that assisted the adjuster in investigation, not tools that tried to leave the adjuster unemployed while some other computer tried to do the job.

Folks, we're talking about jobs here. According to Best's Review, between February 2009 and February 2010, the number of claim adjusters decreased 15 percent, and their average weekly pay dropped more than one percent. The number of third-party claim administrators also dropped by 6.3 percent, their pay by 2.3 percent. If you are interested in your job, then pay attention. Remember that scene from Billy Wilder's 1944 movie, Double Indemnity, in which claim manager Edward G. Robinson lectured the young claim adjuster, Fred MacMurray.

“A desk job? Is that all you can see in it?” Robinson asked MacMurray. “Just a hard chair to park your pants on from nine to five? Just a pile of papers to shuffle around and sharp pencils and a scratch pad to make figures on, with maybe a little doodling on the side? That's not the way I see it!”

The Court and Claims

Most claims in the P&C industry do not reach the Supreme Court. Those that have were significant. State Farm v. Campbell (538 U.S. 408 [2003]) was an attempt to rein in horrendous punitive damage awards by suggesting limits or formulas. But the states in effect told the Supreme Court to mind its own business, and went ahead approving monster awards anyway. The Kumho Tire and Daubert v. Merrell Dow Pharmaceuticals (113 S.Ct. 2786 [1993]), in which the Court limited the use of pseudo-scientific expert testimony in tort claims, also comes to mind. Insurers can no longer rely on quack theories to bail their insureds out of pickles.

As of March 31, another case, Shady Grove Orthodedic Assoc. v. Allstate, touched our industry. In the majority opinion written by Justice Stevens, the Court found that federal law may permit class-actions even where state laws may not. A surprising dissent, written by Justice Ginsburg and joined by Justice Scalia—the two opposite far edges of that pendulum's swing—suggested that federal rules should reflect a sensitivity to state interests.

None of us, in handling a claim, have any way of knowing which of our files may end in litigation, perhaps eventually reaching the Supreme Court. Any of us who have been around long enough have undoubtedly had some lower court decision for or against us appealed to a higher court. We may have won, or we may have lost. But the one thing we cannot predict—either at trial court level or at the Supreme Court level—is how the jury or the judges will rule. We have arguably better odds playing the tables in Las Vegas.

As adjusters, the issues we face each day fall into neat categories for dispute. It may be coverage: Does the coverage apply to the loss? Or it may be liability: To what extent did the insured contribute to the loss? What about damages? Which damages are covered, which are subject to depreciation, and which are indirect or excluded?

Each of these issues produces hundreds of court decisions a month across the nation. An issue of Thomson Reuters West's Insurance Litigation Reporter hardly ever contains less than 15 state or federal appellate or state Supreme Court decisions. Virtually every one of those cases began with the assignment of a claim file to an adjuster.

Losses vs. Claims

If all an adjuster sees is a stack of papers and a nine-to-five job that produces a paycheck on a regular basis, then he is in the wrong chair. Claim adjusting should be a profession. It is not, because it lacks the basic requirements of what makes a profession, such as a graduate degree, strict rules of membership to the profession after a stiff battery of tests, ethical altruistic behavior, and other factors. The fact that one takes an exam and gets a license does not make the licensee a professional. Dogs and bicycles get licensed, too, and passing a driver's test doesn't make one a professional driver.

What makes adjusting a professional vocation, however, is the ability to see beyond the claim, which is simply a demand for payment under a contract or at law, to the concept of loss, a process that begins with the building of hazards, creates an event, and continues to cause damage until controlled.

Professional adjusters are not in the claim business. Rather, they are in the loss business, ferreting out the causes of a loss; seeing what is covered or excluded; and finding ways to quickly resolve the loss and bring it to a conclusion — all while providing information that may help prevent future similar losses.

Nine wise guys (and gals) sitting in Washington can tell us they are trying to understand the Constitution and make their decisions accordingly. However, the “strict constructionist” who seeks to make decisions based on what he believes the so-called Founding Fathers would have thought may be as far off base as the wild-eyed modern who wants to create legislation by court decision.

When the Supreme Court tackles issues such as tort reform, what is meant by “comparative negligence,” or what the rights of insurers are as opposed to the rights of the insureds, adjusters need to pay attention. Those decisions affect what we do. So we better start shoving on that pendulum.