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Kevin Yeam: Know your insurance rights

The facts can prevent you from becoming a victim

Posted: January 8, 2009 9:58 p.m.
Updated: January 9, 2009 4:30 a.m.
 

One of the biggest myths offered by the California insurance industry to justify its eliminating your legal right is the need to control the "litigation explosion" under which we are supposedly burdened. It is simply not true.

These are the facts:

n In the last 25 years, only 355 verdicts in the nation awarded punitive damages in products liability matters. Yet, the risk of punitive damages is a major force in inducing investment in safety and deterring unsafe behavior.

Since 1963, only 265 medical malpractice verdicts granted punitive damages, and then, the case usually was based on sexual assault or a deliberate intent to injure. These cases amount to only 7 percent of tort cases filed in state courts (or less than .5 percent of all civil cases). More than 80,000 deaths and several hundred thousand serious injuries annually are related to medical malpractice, but only about 10 percent of these incidents result in a claim.

n Jury verdicts for plaintiffs are down in number and amounts.

n In states passing "no fault" insurance, the average insurance premium has not been reduced. In fact, these states which limited compensation for pain and suffering saw their liability rates increase an average of 30.9 percent between 1989-92 or over 10 percent per year. In contrast, non no-fault states sustained only 7 percent increases per year over the same time frame.

The six states with the greatest increase in auto liability premiums from 1989-92 were all states with some form of no-fault insurance. Since 1989, California's rates have dropped .02 percent and we are a no-fault state.

n Contingency fee agreements are the keys for the average person to the courthouse. Without it, most people could not afford to pay a lawyer on an hourly basis until their case resolves. Thus, if a claimant can not obtain an attorney, carriers pay fewer claims. Insurance companies pay their defense lawyers by the hour and would not be effected by any modification of contingency fee rules.

At this time, the marketplace governs the chargeable rate for fees and the State Bar Attorney Complaints Department and local county bar associations rule on fee disputes and prevent abuses.

n America is the safest country in the world in large part to the average citizen's access to the legal system, an injured party's right to compensation for the wrongful action of another, the right to a day in court before a jury of your community peers and punish for defendants acting maliciously or in callous disregard toward the public's well-being.

n Punitive damages are not improper.

The U.S. Supreme Court has held such recoveries to be Constitutional. The money is not to reward the plaintiff, but to punish the defendant and deter future similar conduct. By way of example, a major U.S. auto maker was held for punitive damages because a hidden corporate memo was discovered which showed the company knowingly put a dangerous vehicle on the road, but decided it was cheaper to litigate and settle the case of the killed and crippled Americans from their product than to correct the problems and make a safe car.

In uncounted cases, the punitive award result in the offending defendants immediately changing their policy to reflect a safer and more responsible attitude, removal of dangerous products from the market and the avoidance of future injuries or deaths. We will never know how many bad, evil or reckless business decisions were discarded out of fear of discovery and a possible punitive damages lawsuit.

Kevin Yeam is a civil litigation attorney in Santa Clarita. His column represents his own views, and not necessarily those of The Signal. "It's the Law" appears Fridays and rotates between members of the Santa Clarita Valley Bar Association.

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