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Psychological Aspects of the Fault System
As Compared with the No-Fault System

of Automobile Insurance

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VOLUME 1969

Number 11
A Special Report By
THE DEFENSE RESEARCH INSTITUTE, INC.

(A Non-Profit, Non-Stock Corporation)
1212 W. Wisconsin Avenue

Milwaukee, Wis. 53233

(12963)

Q. Is the timing of the "moment of settlement" controlled by your claims department or by retained defense counsel handling the case once it has been assigned for trial by the Assignment Judge of Cook County Circuit Court?

The 14 company replies ranged from absolute control by company claims department, to joint control by claims department and retained counsel, to limited delegation of authority to counsel. Five replying companies reported absolute control retained by the claims department. As a practical matter, general procedure followed by most was described as follows: "This is a matter of close cooperation between retained defense counsel and the claim department. Usually the retained counsel recommends the amount and the time of settlement, but naturally he must obtain authorization from the company since it is its money that is involved ...” Limited delegation is described by one respondent as follows: "Our legal supervisors submit exact settlement authority, if any, to defense counsel prior to assignment to trial. Counsel is expected to make any offer the legal supervisor feels is warranted and has authority to settle within the figure advanced. If counsel is of the opinion that the amount is insufficient, he will recommend a different amount to the legal supervisor. Except for obtaining higher authority, the 'moment of settlement' after assignment is in the hands of defense counsel".

Q. Do your arrangements with retained trial counsel lend themselves in any manner to delay by defense counsel in order to procure one or more days of per diem trial work? Please explain your defense procedures against such tactics

Without exception, all responding companies replied in the negative. One downstate company reported that on occasion the claim manager has become suspicious of tactics of retained counsel and promptly calls in such counsel for consultation. Typical replies: "We pay on basis of time and work performed ..." "Our trial counsel are so busy, they would spurn any idea of this tactic ..." "We have found long ago that an insurance company makes no money in a court room. We insist in nearly all of our cases that our attorneys push for a quick trial or settlement in cases of liability. We would not hire attorneys who we have reason to believe delayed settlements merely to procure more per diem trial work ..." "Attendance by claim representative at court proceedings and the requirement of detailed breakdown on bills for legal services are calculated to prevent this type of occurrence...".

Q. What, in your estimation, would be the effect of guarantee by your company of one trial day of per diem regardless of whether settlement was reached after the case was assigned out for trial but before a jury was empaneled? Would such a guarantee be useful?

All responding companies stated that the one day guarantee would not be useful, would not accomplish its stated objective. Sample replies: "It would have the effect of costing us more money to defend law suits with no resulting benefit. . ," "There are too many good defense attorneys around to put up with such a tactic ..." "It would merely add to defense cost and would not aid in settlement ..." "We would consider any such practice to be wrong. Therefore, we see no justification for paying a premium to condone an immoral practice..."

Q. The above has emphasized asserted delay by defense counsel. Pleas list correctible practices of dilatory tactics by plaintiff counsel in your experience in Cook County Circuit Court.

Several companies canvassed on this point responded with “no comment", chossing not to engage in ex parte criticism of plaintiff counsel. A prećis of responses, however, included the following points :

1. Failure to reply promptly to interrogatories. 2. Postponement of depositions.

3. Unrealistic demand—i.e. $10,000 demand until trial and then willingness to accept $250.

4. Pre-trial should be an ideal opportunity for settlement—if plaintiff's attorney will have his clients present and defendants (insuror) have, or extend, valid authority. Pre-trial is not being adequately used. If it can't be settled at that time it should be tried.

5. All too frequently, after five years of trial preparation, plaintiff's attorney capitulates at trial time and drops a case which he never intended to try to conclusion.

6. Trial specialist attorney who ordinarily tries cases for plaintiff's attorney is in court on other trial commitments.

7. Plantiff's counsel wants a last attempt to settle to avoid splitting a fee with a trial specialist.

8. Plaintiff's attorney has already made so much in preceding cases that he prefers to defer settlement until the ensuing tax year.

Psychological Aspects of the Fault System
As Compared with the No-Fault System

of Automobile Insurance

[merged small][graphic][subsumed][merged small]

VOLUME 1969

Number 11
A Special Report By
THE DEFENSE RESEARCH INSTITUTE, INC.

(A Non-Profit, Non-Stock Corporation)
1212 W. Wisconsin Avenue

Milwaukee, Wis. 53233

(12963)

This publication was made possible through the financial assistance of the following defense attorney organizations:

Association of Insurance Attorneys
Federation of Insurance Counsel
Alabama Defense Lawyers Association
Association of Defense Counsel (Northern California)
Association of Southern California Defense Counsel
Dade County Defense Bar Association (Miami, Florida)
Mississippi Defonse Lawyers Association
New Jersey Defense Association
Defense Association of New York (Now York City)
Defense Research Institute of Northeastern New York
Ohio Defense Association
Oklahoma Association of Defense Counsel
Tennessee Defense Lawyers Association
Texas Association of Defense Counsel
Washington Association of Defense Counsel (Seattle)

Requests for additional copies of this publication should be directed to:

Defense Research Institute
1212 West Wisconsin Avenue, Milwaukee, Wisconsin 53233

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