The Real Problems in Personal Injury Law

In my opinion, the insurance industry is missing the boat when it talks about the problems in the personal injury industry.

The problem is not people with legitimate injuries or wrongful death claims getting large damages awards (or as the defense industry likes to call it, “nuclear verdicts“).

The problem is the proliferation of high-volume firms that are solely focused on trying to settle cases pre-suit. Those firms do not care what happens in litigation.

They want to do whatever it takes to get as many cases settled pre-suit. That is how their business model works.

When people are constantly low-balled when it is not a clear limits case—as in many cases where there is conservative treatment through health insurance—those firms are only focused on flipping as high a volume of pre-suit settlements as they can.

That often involves having lawyers involved in directing treatment, or at least using liens or medical funding when they should be using health insurance.

The question the insurance industry should be asking is: Why do many law firms do that? And what can be done to realign incentives?

Proposed legislative fixes are not the solution. They do nothing to actually address the root cause.

It is like addressing a symptom but not the cause. If you have high blood pressure, is it better to treat the symptoms or change your lifestyle habits by eating better and exercising?

In short, my opinion is that the insurance industry should look internally at what it can do to address some legitimate concerns. But a legislative hammer is not the solution. And trying to limit the rights of people with legitimate claims is not the solution either, as those are the people most often harmed by legislation.

What do you think? Join the conversation with me on LinkedIn.