« PreviousContinue »
expensive product is not always a quality product. More specifically, under nofault plans such as the Keeton-O'Connell and American Insurance Association proposals, the purchase of this coverage is a condition precedent to the registration and operation of a vehicle in a state enacting the plan. However, no provision is made under such plans for the motorist who has adequately protected himself and his family against the losses covered by the plan through other sources of indemnity. There is no way for him to avoid purchasing unneeded coverage. He is forced to pay another premium for duplicate indemnity. The plight of this "over-insured motorist” is further complicated under some plans. For example, no benefits would be paid under the Keeton-O'Connell proposal if the insured received duplicate benefits from another source. Thus, under such a plan, this insured would be forced to buy coverage he does not need and under which he will be able to make no recovery. Even without such a setoff, it is inconsistent for plans which are offered for the stated purpose of reducing the cost of insurance to force persons to buy protection they do not need.
It should also be noted that the benefits to be paid under no-fault proposals are limited. Typically, benefits are received only for wage loss (up to a stated maximum per month), hospital and medical expenses and, in some cases, a limited death benefit.
Thus, no-fault forces a person to buy types of indemnity coverage that are presently available—if really wanted-from other sources. No-fault would pay only limited benefits for damages arising from auto accidents, while other sources cover a more broad spectrum of losses. Persons covered by the other sources would have no way of escaping the compulsion of buying unneeded, duplicate coverage. In some instances, persons forced to buy unneeded, duplicate coverage would be denied its benefits. Finally, all persons forced to buy this no-fault package would also be forced to give up the right to recover compensation for the pain, discomfort, disability, disfigurement and suffering caused by the fault of another to seal a bargain which many of them did not need but could not avoid. This may turn out to be a cheap product but we do not believe it is a quality product.
EQUITY OF COMPENSATION Finally, it is claimed that a change from the present system to some no-fault scheme would result in equity since all persons injured in motor vehicle accidents would be entitled to the same type of benefits. Such a promise has, at best, superficial appeal. This is the most disturbing feature of the no-fault mystique.
The proponents of such plans realize that to compensate all—the persons who cause accidents and their innocent victims alike-it would be economically impossible to offer compensation similar in scope to that which is now provided under the tort system. Their solution is simple : reduce the scope of the benefits available to innocent traffic victims and pay these reduced benefits to everyone. The innocent victim is denied compensation for his scarring so that he and the drunk who ran into him can have their hospital bills and lost wages reimbursed. The innocent victim is denied compensation for the pain and suffering associated with a broken limb so that he and the reckless teenager who cared more about kissing his girl friend than which side of the road he was on can have their medical expenses paid.
This promise of the no-fault proponents is not for equity it is for blind equality. While our constitution promises equality before the law, it does not promise equal treatment by the law. We do not jail the robbed with the robber, the assaulted with the assaulter. These plans do not seek to do justice. Rather, they attempt only to create limited funding schemes on the theory that it is too expensive to provide full and just compensation for the innocent victims of auto accidents. They set up the equivalent of boards of adjustment to fix allotments for injury and damage by formulae and percentages with no concern for the determination of responsibility for the loss or adequate compensation.
We do not oppose having insurance protection available for those who are injured through their own fault or through events which cannot be traced to another's fault. Such protection is now available for those who need and want it. We are opposed to any proposal which seeks to establish and fund such a system by restricting and reducing the compensation due to persons who are injured through the carelessness or intentional conduct of others. Such proposals violate the basic sense of fairness and justice which is inherent in our society. For your additional information we have attached Appendices A and B to this statement. They contain the results of the detailed analysis we have made of two of the most discussed no-fault proposals.
IMPROVEMENT OF THE PRESENT SYSTEM
Our study has led us to believe that the basic principles which underlie the present automobile accident reparation system are sound. We believe that where problems do exist they can be resolved by modification and change within that system's basic framework. We have expended much time and effort to determine the best method in which this could be accomplished.
The first official statement of our position in this regard was contained in the special report, JUSTICE IN COURT AFTER THE ACCIDENT which was issued in January 1968. It was dveloped by the Defense Research Institute in conjunction with the International Association of Insurance Counsel, Federation of Insurance Counsel and Association of Insurance Attorneys. A copy of that special report is filed with this statement as Appendix C. In JUCTICE IN COURT was stated our belief in the need to preserve and improve the present system and provided a broad blueprint for the areas in which this improvement could be achieved.
Although much time, effort, study and analysis went into the development of JUSTICE IN COURT it was viewed by the four issuing groups as only a first step. Work was immediately begun to take the general principles of JUSTICE IN COURT and develop them into specific proposals for reform of the present system. That work culminated in a second special report by the four groups which is entitled RESPONSIBLE REFORM-A Program To Improve The Liability Reparation System. A copy is also provided as Appendix D to this statement.
We believe that the proposals contained in RESPONSIBLE REFORM would make the present system of automobile accident reparations less costly, more expeditious, more equitable and efficient, all within the framework of a system which is supported by the American public and which has proven its ability to adapt to changing circumstances.
coST OF SYSTEM Several of the proposals found in RESPONSIBLE REFORM are concerned with the cost of the present system. The first of these deals with highway safety.
If a railroad train carrying dangerous chemicals were to explode in the midst of one of our most populated cities causing death to 150 persons and injuries to 14,000 others, the halls of Congress would reverberate with demand for immediate investigation and meaningful action. Yet, in 1968 that was the average daily motor vehicle accident toll. Great number of persons have marched in our streets demanding our disengagement from the Vietnam war. Yet, more persons have been killed and injured on our nation's highways than in all our wars. If a drug in common use in this country was found to be responsible for the death of 25,000 of our citizens, it would be summarily ruled off druggists' shelves. Yet, a report by the Department of Transportation shows that 25,000 persons lost their lives during one year in highway accidents caused by the use of alcohol, but laws concerning drinking and driving remain miserably weak. At a time at which our national priorities are being challenged, highway safety programs are being relegated to the back page of news publications, ignored by television and granted only token attention by legislatures.
We believe that in addition to saving human life and suffering, the only way to significantly reduce the cost of the automobile accident reparation system is to take decisive and meaningful action to curb the number of accidents which occur on our streets and highways. Anything else would be an expedient stopgap. We believe that much could be done to improve highway safety if greater concentration were placed on the motorist as the cause of accidents. Studies have shown the high involvement of alcohol and drug use as a cause of traffic accidents. The families and friends of the persons killed and injured in those accidents would not be convinced by arguments of no-fault proponents that accident causes are hard to prove. It has also been shown that traffic deaths and injuries could be reduced by a substantial percentage if only a small number of habitual traffic law violators were ruled off the road. We believe that driving is a privilege and not a right. Therefore in RESPONSIBLE REFORM we have set forth certain proposals to deal with the accident producers. We have proposed legislation for mandatory license revocation and fines for those convicted of op
erating a vehicle while under the influence of alcohol and drugs; permanent license revocation for habitual traffic law violators; penalties for pedestrians who cause accidents while under the influence of alcohol or drugs; uniform licensing standards for drivers with periodic examination for driving competence; and mandatory use of motor vehicle safety equipment including seat belts and motorcycle safety helmets. We will also lend our support to all meaningful proposals of others to protect the careful motorist from those who abuse their driving privilege. While proponents of no-fault seem to treat all accidents as inevitable and are only concerned with treating the results, we are concerned with the cause itself.
FAULT AS A DETERRENT
As part of our concern with the driver as an accident producer, we were troubled by the claims of some that a shift to a no-fault auto reparation system would have no effect on highway safety. We were troubled because those who made the claims presented no empirical data. We believed that too many persons are already being killed and injured on our highways and that this subject is so important that decisions regarding it should not be made upon the basis of speculation and conjecture. We sought to study the problem.
Lawrence Lawton, a professional engineer and long-time traffic consultant from Westchester, New York, was commissioned by the Defense Research Institute to direct the research. In a thoroughly documented study he has shown conclusively that the present fault system applies all possible psychological deterrents to highway accidents. In direct contrast, he concluded that adoption of a no-fault proposal would increase accidents, deaths, injuries and economic loss to the American public.
In his study, Psychological Aspects of the Fault System as Compared with the No-fault System of Automobile Insurance. Mr. Lawton utilizes empirical data gathered from numerous and authoritative psychological studies. He shows that group standards and their exercise have definite impact upon individual behavior of drivers. Under the fault system, the frequency of contact with established group values is optimum. In addition, aggressiveness which is the cause of many accidents is curtailed. Impact of the group standard would be non-existent under the no-fault proposals since pressure of community abhorrence against those who cause accidents would not be brought to bear. Thus, the deterrence of society's standards would be destroyed. Since there is no fault and accidents would be considered a result of random chance under that system, aggression would run rampant through a series of minor accidents. More minor accidents would ultimately result in more major accidents which kill and maim.
Mr. Lawton has also concluded that criminal law is not adequate in itself to curtail highway accidents. He notes that the present system's use of increased auto insurance premiums for bad driving practices would not be an influence under no-fault compensation plans.
Mr. Lawton has arrived at his conclusions on the basis of system analysis and has added his lifetime personal experience to analysis of experimental data. We believe his conclusions are correct. He warns against accepting the opinions of amateurs with regard to this subject before their theories have been adequately tested. The lives of drivers, passengers and pedestrians cannot be gambled on unsupported conjecture, particularly when such expert research indicates that the gamble would be lost by a shift to the no-fault concept. We have provided a copy of a summary of Mr. Lawton's study as Appendix E to this statement.
Returning to the proposals of Responsible Reform, ve also believe that the cost of the system, in terms of returning more money to deserving claimants, could be reduced if the abuse of the contingent fee system were checked. At the present time, no workable approach has been fashioned to allow actual legal expenses to be recovered by a successful litigant. Until one is, the contingent fee system provides the only means by which a person who is financially unable to retain counsel on some other basis may have his day in court. For that reason, the contingent fee system has proved beneficial. However, it is subject to misunderstanding and abuse. Those who abuse it are small in number, yet they bring the entire profession, and especially those who are conscientious in the use of the system into disrepute. The proposals found in Responsible Reform would make the contingent fee the subject of strict court control. It would also seek to correct some of the misunderstanding about the operation of the contingent fee system by requiring information as to its application to the specific case to be given to the client.
We also put forward proposals relating to the modification of the collateral source rule, control of fraudulent claims and efficient use of the legal effort. Since copies of Responsible Reform are available and self-explanatory, I will not discuss them in detail. However, each in their own way, would make the present automobile accident reparation system less costly.
SPEED IN PAYMENT There are three specific proposals found in responsible reform which seek to expedite the compensation of persons injured in automobile accidents.
The first is a proposal that every automobile liability policy covering any private pa:ssenger vehicle, on a non-fleet basis, provide minimum stated first party coverages. These would be for medical and hospital expenses, uninsured motorist protection, income disability and accidental death benefits. They would protect the named insured and members of the family of the named insured residing in his household and would provide similar coverages to guest passengers injured while occupying the insured vehicle who are not afforded such protection by sources collateral to the insured's policy.
We differ in our approach to first party coverage from that proposed in nofault plans. Although these benefits would be provided on a no-fault basis, they would not affect the rights of the injured person to seek tort compensation from the person causing him injury. In addition, the insured would not be compelled to purchase this coverage if he believed he was adequately protected by his other first party insurance and benefit plans. He would have the right to reject it as it affects himself and resident members of his family. He would not be able to reject this coverage for guest passengers. However, those passengers would be protected by the insured's coverage only if they did not have benefits available from other sources.
We believe that this approach is superior to that offered under a no-fault plan, since it offers protection only to those who need and want it.
Responsible Reform also seeks to alleviate the problem of congestion and delay in the courts. We have proposed that sufficient numbers of judgeships be created to meet the needs of society caused by population growth. Presently judges are shifted from civil to criminal litigation so that persons accused of crimes may have the charges against them disposed of promptly. We believe that the taxpaying, law-abiding citizen should have an equal right to the prompt disposition of civil litigation. We believe that creation of more judgeships will help to alleviate the problem of delay where it presently exists and also will prevent delay from occurring in those metropolitan jurisdictions which are not now troubled with the problem.
Responsible Reform also contains a proposal aimed at easing court congestion and delay in the few metropolitan areas where it now exists. We have proposed that a system of mandatory arbitration of all lawsuits involving claims under $3000 be adopted in those jurisdictions. Matters are to be disposed of by panels of lawyers without the expense of more court personnel and facilities. This approach is presently working well in Philadelphia, where court delays for claims under $3000 were reduced from 30 months down to only 30 days, and we believe will effectively reduce delay elsewhere.
We also believe that the insurance industry has been doing much to expedite the payment of personal injury claims through advance payments programs which provides claimants with funds for economic loss before liability is determined. Responsible Reform contains a proposal which would aid insurers in continuing and expanding this effective process.
EFFICIENCY AND EQUITY OF THE SYSTEM
Several of the proposals found in Responsible Reform are concerned with improving the efficiency and equity of the reparation system. There has been considerable debate over the merit of adopting a system of comparative negligence to replace the rule of contributory negligence. Our proposal is that the determination of whether the rule of contributory negligence should be abandoned is a matter for local determination but that when the rule is to be changed, the present Wisconsin comparative negligence rule and procedure is preferable and should be substituted. We do not believe that the problem has a national solution. What may be workable in one area of the country may not succeed in another.
We have also proposed the modification, addition or elimination of many legal practices and procedures. We believe that many procedures continue to
be followed simply because they have been used for a long time. They add nothing to the efficiency or effectiveness of the system. Other procedures need to be added or brought up to date to make the system as efficient and effective as possible. Again, space limits their discussion in any but this Imited manner.
Finally, we have concerned ourselves with the question of pain and suffering. Proponents of no-fault plans tend to imply that there is something immoral about paying an accident victim for anything other than his direct economic loss. If pressed on this point, they generally retreat to the position that it is impractical to pay for general damages since they are hard to measure.
The mere fact that an accident victim cannot produce a signed receipt for all of those damages does not mean that no loss has been incurred-nor that it is so unimportant that it should be disregarded. In actuality, the majority portion of the money paid for general damages is not for "pain and suffering," in the literal sense of that term. It is for such items as bodily impairment, disfigure. ment, temporary or permanent interference with normal activities, the inconvenence and disruption of personal plans, and-in the case of permanent disability-of the immeasurable but nonetheless real diminution of the victim's prospects for business success, marriage and continued happiness.
There are some who propose that the compensation for pain and suffering be completely eliminated. Others propose that formulae be developed so that compensation for pain and suffering can be computed upon a multiple of some item of the claimant's out-of-pocket expense. We believe that a person should continue to receive full compensation for tortiously caused pain and suffering. We believe that a person should not be denied recovery for pain and suffering simply because its severity does not measure up to some artificial quantum. We are convinced that juries have been performing their function of setting compensation for these losses well and that every effort should be explored to aid their task.
NEED FOR CONTINUED STUDY AND IMPROVEMENT
These then are the proposals of Responsible Reform. We do not suggest that the proposals are a panacea. Other groups including the American Bar Association have studied the problems and proposed programs of reform within the framework of basic legal doctrine. Much found in the report of the ABA Special Committee on Automobile Accident Reparations, which was approved by the American Bar's House of Delegates last August, finds support in Responsible Reform. Likewise, support for the proposal of Responsible Reform is found in the ABA Special Committee report. We believe it is significant that the American Bar and the four groups which sponsored Responsible Reform have agreed on the position that the pesent system is worth preserving and can be improved within its own framework. It is also significant that each has found proposals which seek to limit the compensation now available to innocent victims of traffic accidents contrary to the public interest.
When we first began our study and analysis of these problems we were certain that, should we find the present system was worth preserving, we as lawyers would be labeled as subjective defenders of the status quo, more interested in preserving our self-interest than the public's. Therefore, we were placed in the unenviable position of being required to either approve proposals which we found to have no merit or having our integrity challenged if we were critical of such proposals. It would be naive to suggest that members of the Bar do not have a financial interest in the present system which provides a means to earn their livelihood. However, it does a great injustice to the members of the Bar to suggest that they are unable to objectively analyze proposals which would greatly affect the public interest. As defense lawyers we could have taken the safe and expedient position of spectators to this controversy. In so doing we would have avoided the possibility of causing antagonism to be created against us by some of our major clients. We could live very well under a no-fault system. Other areas of the law are increasing at a rapid pace and new legislation always results in the need for the services of one skilled in the law. There would surely be litigation under the no-fault plans themselves. However, we believe that it was incumbent upon us as attorneys to resolutely carry out the obligation we embraced with our oath to lay bare flaws of any proposal which would lead to the deprivation of the basic rights of the public-no matter what the personal cost.
We knew that ours was not an easy task since, ironically enough, a system of law was judged and condemned before all the evidence was collected or a defense presented. In support of this statement all we need do is look to the