Lawyers make scapegoats of insurance companies

January 18, 2004|by Sen. Frank Deem

The West Virginia Legislature has been studying insurance availability and affordability during its interim committee meetings. I have had more of my constituents contact me regarding either the high cost of insurance or just not being able to get insured at all, than on any other issue.

During our last regular session we did address the high cost of malpractice insurance and gave some relief to doctors and hospitals. We set a maximum cap on noneconomic damages, which trial lawyers said would not help. Apparently it has helped, because we are not now being threatened by a mass exodus of our practicing physicians.

Also, a recent study by the U. S. General Accounting Office (GAO) found that the rates of growth in malpractice premiums and claims payments have been slower on average in states that enacted certain caps on noneconomic losses. They also found that in 2001-2002 average premiums grew nearly three times as fast for physicians in specialized areas that worked in states without caps.


During our interim insurance meetings we have heard testimony by both the trial lawyers (those who sue on behalf of injured parties) and defense lawyers. Trial lawyers always blame the high cost of insurance on the insurance companies. In their testimony before the insurance committee, they produced graphs and charts indicating that insurance companies made their money on their investments and not on insurance.

Their graphs tracked higher insurance rates with the decline in the stock market. However, the GAO report stated that there were multiple factors involved in rising insurance rates but that the most influential factor was the "steeply raising losses on claims."

The insurance companies have not done a good public relations job by letting trial lawyers portray them as the bad guys. Because of this poor public relations effort, powerful consumer groups are supporting the trial lawyers. These groups include the AARP and labor unions. After all, it is the consumer who pays the higher premiums necessary to offset the "steeply raising losses on claims."

Ralph Nader, who calls himself a consumer advocate is also on the side of the trial lawyers. This comes as no surprise because Nader is a trial lawyer. I can understand Nader's position (although calling himself a consumer advocate is a misrepresentation at best). I cannot understand the AARP and the labor unions position. They should be fighting for the consumer to hold down the large awards insurance companies have to pay out forcing them to raise rates to their policy holders.

In recent years, trial lawyers have been very active politically. Along with big labor, they have been successful in raising huge amounts of money and electing legislators who are sympathetic to their cause. They have made every effort to elect people to political office who are opposed to any insurance reform.

While President Bush has promoted legislation that would put some limits on the trial lawyers' raid on the American policyholder, his efforts have been thwarted by Congress. These legislators, in large part, are there because they owe their position to those who are opposed to any change to our civil justice system.

Sen. Frank Deem is a Wood County Republican.

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