Jim Schwebel, principle shareholder with the firm commented, “It’s exciting to see the firm and our lawyers featured so prominently in this issue. I’m proud, not just of our accomplishments, but also that our lawyers received recognition for their hard work and expertise. We’ve gathered a great team of lawyers and this issue reinforces that we are truly good at what we do—helping people who have been injured get back on their feet.”
According to the article “The Top Personal Injury Recoveries of 2001,” Schwebel, Goetz and Sieben recovered the 7th highest dollar amount in 2001: $2.4 million for the Holidazzle parade accident. James Schwebel, John Goetz and Mark Gruesner lead the team that represented four injured persons and the family of a mother and daughter who were killed when a police van careened into a crowd during the 1998 Holidazzle parade in downtown Minneapolis.
For the second consecutive year, William Sieben received the most votes in the magazine’s annual list of “Minnesota’s Top 40 Personal Injury Attorneys.” Also voted to the list were fellow Schwebel, Goetz & Sieben attorneys Paul Godlewski, Peter Riley, James Schwebel, Sharon Van Dyck and Candace Dale. The annual list is voted on by over 23,000 of Minnesota’s personal injury attorneys.
Jim Schwebel headlined the article “Pain Relievers,” which interviewed three top personal injury attorneys. The story profiled his career path, what he believes it means to be a personal injury attorney and some of his experiences as the head of Minnesota’s largest personal injury law firm.
Two attorneys with the firm were interviewed for feature articles concerning personal injury law. Richard Tousignant was quoted in an article (Faulty Powers) discussing the success of the no-fault insurance system passed as an act in Minnesota in 1975). Peter Riley and Tousignant were both quoted in an article (In This Corner, An Computer; In That Corner, The Lawyer) discussing the ineffectiveness of Colossus, a software program that insurance companies use to determine what they should pay for auto accident injuries.
The no-fault insurance system was supposed to lower
premium and unclog the courts. Has it?
By Holly Dolezalek
It’s been 26 years since the Minnesota No-Fault Automobile Insurance Act changed the way Minnesotans deal with injuries in car accidents. The no-fault concept is still in dispute among personal injury lawyers.
Under the no-fault system, who caused the accident is irrelevant. All those involved go to their own corners, and their insurance company pays for their damages and medical bills. The trade-off for the guaranteed payments is that people who are insured under the no-fault system can’t sue for noneconomic damages, such as pain and suffering, unless they meet certain thresholds. If the injured person has more than $4,000 in medical bills, has been disabled for 60 days, has a permanent injury or is disfigured, he or she can sue for noneconomic damages.
Former senator and judge Jack Davies championed no-fault insurance in the 60’s and 70’s, and he helped to pass the Minnesota No-Fault Automobile Insurance Act in 1975. He has called the no-fault law one of his proudest achievements of his public career.
During his law school days, Davies concluded that injury, not fault, should determine compensation if someone was hurt in a car accident. He also thought there were too many nuisance cases being endlessly litigated by lawyers who made a living by arguing over who caused what accident.
“The fight [for the law] was mostly against the trial lawyers,” says Davies. “People said it was an insurance industry proposal, but it wasn’t. One-third of the insurance companies were for it, one-third were against, and one-third couldn’t make up their minds.”
Davies says the law has been a success because of two things: there are fewer injury claims being litigated now, and premiums are not as high as they would be if the traditional system were still in place.
Has that happened? It’s not clear. A look at average auto insurance premiums by state shows Minnesota in about the middle of the pack. According to a National Association of Insurance Commissions study in 1999, Minnesota’s premiums were the 25th highest, with an average combined premium of $752.57.
Wisconsin, which still operates under the traditional system, was near the bottom of the list. At #47, with a combined average premium of $604.82, Wisconsin was close to having the lowest premiums in the country. The 1999 data show that, rather than being lower, premiums in no-fault states are 11 percent higher than in fault-based states.
Factors such as population density and minimum insurance requirements that vary by state might account for the difference. But it doesn’t look as though the 15 percent drop in premium that was promised has materialized. The question of whether there really is less litigation under the no-fault law is also difficult to settle, because personal injury lawsuits are not separated out by cause (car accidents, other types of accidents, etc.) Also, the number of lawsuits doesn’t tell the whole story. More and more cases are being settled by alternative dispute resolution (ADR).
In 2001, 4,571 cases were submitted for no-fault arbitration, according to Richard Tousignant, a personal injury attorney who arbitrates these disputes.
“Actually, there probably aren’t fewer lawsuits than before no-fault, because of the tort thresholds,” says Tousignant. “Instead of going to court to convince the jury that your client was injured, now you have to go to court to convince the jury that the injuries resulted from the accident and meet the standards set by the legislature.”
Still, says Michael Tewksbury, a personal injury attorney with Tewksbury Kerfeld Zimmer, the system is beneficial. “It takes care of two-thirds of all car accident claims without litigation or arbitration,” he says. “Also, many people don’t have health insurance, and without no-fault these people couldn’t get care after an accident.”
The main weakness of the system seems to be in the area of the independent medical examiner. Before no-fault, either the injured person or his or her health insurance paid medical bills. The no-fault statue requires the auto insurance companies to pay, but it also allows them to question whether further treatment is necessary for an injury. This is a frequent occurrence in soft-tissue cases, such as whiplash, where the injured person has no broken bones or visible injuries but is still in significant pain caused by strained or torn ligaments, tendons and muscles.
In many of these cases, says Tousignant, after a certain amount of treatment, the insurance company will send the injured person to an independent medical examiner (IME).
“When the insurance company says, ‘We want you to see our doctor,’ it means that benefits are going to be cut off,” says Tousignant. “They hire conservative doctors to say that there’s no injury or its unrelated to the accident. The famous line is ‘I was unable to find any objective findings to support the subjective complaint.’ ” These doctors’ judgments can actually prevent injury victims who don’t have health insurance from getting treatment in cases where surgery is required. Why? Hospitals won’t conduct surgeries unless someone has agreed to pay for them. If an insurance company refuses to pay, the surgery won’t happen – and the injured person can’t take the matter to arbitration, because arbitration requires actual bills from provided services.
John Hammerberg, associate regional counsel for Farmers Insurance’s claims department, defends the insurance industry’s use of IMEs. “The IMEs we use are all practicing physicians who have their own practice,” he says. “We just want them to be honest with us and tell us what’s really going on.”
Hammerberg says that the subjective nature of determining whether treatment if “reasonable, necessary and related” is what causes claims to go to arbitration or litigation. Insurers, attorneys, injured people and health care providers can all view the same set of facts in completely different ways. Insurance companies just want to make sure they’re paying when they should be. “No-fault does not mandate that the auto insurer has to pay for all treatment regardless of whether it’s necessary he says.
On one issue, all sides agreed: The limits on benefits imposed by the statute need to be updated. Tewksbury points out that compensation for an injured person’s lost income is limited to $250 per week. “That’s not very much, especially if the payments are delayed,” he says. Other than such tinkering, the no-fault law is probably here to stay.
IN THIS CORNER,
IN THAT CORNER,
By Holly Dolezalek
A computer program may be able to beat chess geniuses, but that’s not going to be the fate of personal injury lawyers, if they can help it. The program in question is Colossus, software that tells insurance companies what to pay for injuries caused by auto accidents. The Colossus brochure boasts that this software contains information about treatments and complications for more than 600 traumatic injuries. Based on this information, even the most inexperienced adjuster can navigate through Colossus’ interactive questioning to arrive at a fair amount to pay for injuries.
Sounds good? Not so fast. Personal injury attorney’s say it’s like any tool – it’s only as good as the person using it. “I have no problem with (insurance companies) using Colossus,” says Peter Riley, a personal injury attorney with Schwebel, Goetz & Sieben in Minneapolis. “What I do have a problem with is when they use it as their bible, when they won’t negotiate because Colossus has spoken.”
Computer Sciences Corporation (CSC) began licensing the software in 1992, and since that time several major insurers have been sued for allegedly misusing Colossus in order to reduce payments.
One complaint about Colossus is the method it uses to calculate settlements. Colossus compares each case to other cases with similar injuries in its database, and then gives a settlement figure based on that information. But the insurance company decides which cases will serve as Colossus’ comparison. Also, jury verdicts aren’t included in those figures, and settlements tend to be lower than jury verdicts. Attorneys say that the two factors mean that Colossus offers will always be lower than they should be.
Richard Tousignant, also with Schwebel, Goetz & Sieben, writes articles and gives seminars about Colossus. He believes that the software was developed with a certain kind of attorney in mind: the kind that won’t go to trial. “I’ve tried five cases that involved a Colossus settlement figure,” he says. “In all five cases, the verdict was more than twice what Colossus offered. Now, both Allstate and Farmers are making decent offers to me, because they know I’ll go to court if they don’t.”
A veil of secrecy shields Colossus from most inquiries. Insurance companies won’t discuss the database they use, nor will they allow attorneys to see or evaluate the comparison data. Adjusters aren’t allowed to discuss Colossus with anyone. The secrecy is another aspect of the software that troubles Riley.
“If it’s so great – if they’ve discovered some foolproof way to really nail down the dollar value of an injury – why not share it?” he asks.
Minnesota Law &Politics is an industry journal covering legal and political issues in Minnesota. The articles appeared in the April/May 2002 edition