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Plaintiffs often don't collect the amount that juries award

by Thomas B. Scheffey
Connecticut Law Tribune

February 25, 2008

christopher bernard

Christopher Bernard, a partner at Koskoff, Koskoff & Bieder, said plaintiffs’ attorneys sometimes make bad faith claims against insurers in attempt to collect more of a judgment.

Law has been called the best-documented of all the professions.

Before and after a law is made, lagoons of ink are often spilled in discussing, evaluating and analyzing it. More and more case law is being reported, and the advent of the computer terabyte is continuing to improve the breadth and depth of legal information.

One glaring exception is the realm of verdicts and settlements, where even the best knowledge continues to be anecdotal and unofficial. The Law Tribune staff was reminded of that fact as we collected data for our annual yearbook listing Connecticut personal injury verdicts and settlements. That publication is inside this week's newspaper.

For the legal practitioner, estimating value is critically important in deciding whether to take a case in the first place. But in a settlement, one or both parties may have reasons to hide the results. Nationally, courts have repeatedly sealed settlement terms — even where the public's welfare is an issue. These include cases where people were injured by defective drugs, tires, cars and child sexual abuse.

Verdicts, it would seem, should be easy for the public to find out. They arise from public trials conducted at taxpayer expense. A jury and a judge sign off on the bottom line number, be it zero or some much higher figure.

But whatever that number is, it is not treasured as important data by the courts. In fact, it is not even reported in the computer records of Connecticut court cases. "There's no field for that figure," confirmed Rhonda Stearley Hebert, spokeswoman for the state Judicial Branch.

Online databases have cropped up, but they are hardly exhaustive. Unofficially, plaintiffs and defense lawyers' associations collect anecdotal reports of members' verdicts and settlements. These volunteer efforts tend to be a small sampling, and some are several years old when they first see print.

And, when it comes to verdicts, timeliness is important. After all, in just a year's time, some Connecticut verdict and settlement records have increased tenfold. In 2006, an apparent state record for a delivery room malpractice case was set by Joshua Koskoff, at Bridgeport's Koskoff, Koskoff & Bieder, only to be broken by his partner Kathleen Nastri, with a $3.5 million award last October.

That number was eclipsed by a $38.5 million verdict this month by Stamford lawyers Angelo A. Ziotas and Richard A. Silver, of Silver, Golub & Teitell.

Spongy Numbers?

But the bigger numbers raise questions of their own. The biggest is: Do plaintiffs actually get anything close to the amount awarded by a judge or jury?

Consider the recent $38.5 million verdict. The doctor on the losing end of the malpractice suit had only a $2 million insurance policy. It's uncertain whether a great deal more than that will be collected by the family of a boy whose difficult birth resulted in his suffering brain damage.

Another way a verdict can be illusory is if the parties have a pre-trial arrangement, called a high-low agreement, which caps the defendant's liability and assures the plaintiff's lawyer the consolation prize of cost recovery.

And then there are cases involving insolvent insurers. There are often upper limits on how much the state insurance rescue fund will pay on a claim.

Christopher Bernard, a partner at Koskoff, Koskoff & Bieder, is a former president of the Connecticut Trial Lawyers' Association, accomplished in malpractice and other high-stakes personal injury litigation.

Bernard's firm won the largest Connecticut verdict rendered in 2007, a $22.5 million medical malpractice case of the late Gary Carlson, who died 15 years ago. The case ranks 81 on the ALM VerdictSearch Top 100 verdicts of the year, and is the only Connecticut verdict on the list.

But Carlson's family likely won't get anything near $22.5 million. A judge has already reduced the verdict and the defendants are likely to appeal.

In 2005 a Waterbury jury came in with an award of $36.6 million. Unreported by the media at the time, that case was subject to a high-low agreement that cut it down dramatically. "I can tell you the case settled, but I can't tell you what the numbers were," said Bernard, who is bound by a confidentiality agreement. "A big verdict doesn't necessarily mean that money is being paid. You're absolutely right."

He explained that changes in the medical malpractice insurance industry have prompted Connecticut plaintiffs' lawyers to invoke other strategies to achieve the highest value verdicts. As a general rule, the defendant's insurance limits have tended to dictate the upper limits of what a plaintiff can win.

Before 2002, Bernard said, physicians were able to purchase fairly large medical malpractice insurance policies, up to $5 million in coverage. But the Sept. 11 attacks caused a retrenchment in the insurance industry, and most doctors were limited to $1 to $2 million in coverage. Higher amounts of coverage, if available at all, became prohibitively expensive, Bernard said.

The Connecticut Medical Insurance Company "stopped writing policies in excess of one or two million, so even if they couldn't get caps [on pain and suffering damages] through a bill in the legislature, they were able to cap their exposure" by limiting policy amounts, Bernard said.

Two recent medical malpractice verdicts in Connecticut illustrate a daredevil strategy being used by plaintiffs' attorneys. In the Carlson case and the $38.5 million case, the plaintiffs made formal offers to settle at or under the insurance policy limits, while at the same time contending the full policy amount was only barely adequate.

In both cases, the insurers declined to settle.

When jurors came in with verdicts far in excess of the coverage limits, Bernard said, the insurers were targets for claims that their failure to settle was made in bad faith.

"That's how you buy additional insurance, when insurance companies make bad decisions and stick to them," Bernard said. "For some inexplicable reason, they make a decision not to protect their insured."

But will this tactic of plaintiffs' lawyers suing defendants' insurance companies result in more money being collected? Despite a great deal of talk about bad faith claims in such cases, there are no examples of such cases going to verdict, Bernard said.

Small Cases Critical

Shifting strategies in collecting huge verdicts is just one trend in personal injury cases. There are also changes on the other side of the spectrum, in comparatively minor lawsuits brought by people who sustain soft-tissue injuries in car crashes and other mishaps.

University of Connecticut School of Law Professor Tom Baker, at the Insurance Law Institute, said the amount plaintiffs are able to collect in those cases is going down.

He referred to a study by The McKenzie Group, a respected consulting organization, which advised insurers to closely monitor low-end settlements to save money.

An example of this has been Allstate's Minor Injury and Soft Tissue program, or MIST. "They had decided that they were paying more to settle [cases] than what the claims would be worth if a jury actually heard them," said Baker. Using data based on verdicts, Allstate "systematically reduced their settlement price. As long as they do that in good faith, with a realistic analysis of the numbers, it's their job."

One other development is changing the perception that every lawsuit results in a windfall for the plaintiff. Increasingly, defense lawyers are willing to disclose their victories. Statistically, defendants win about 60 per cent of personal injury claims that go to verdict. But news stories about defense victories have been rare. Many insurers limit comment on specific cases, even when their lawyers win.

Stamford defense lawyer James Rosenblum, of Rosenblum & Newfield, was on the losing end of the recent $38.5 million case. But that verdict came in 2008. According to his web site, last year was one to crow about: "2007: 5 wins, no losses!"

"Most [defense] litigators that I know think that it is appropriate, and indeed necessary, to respond to press inquiries about cases. If they don't do it, the publication is likely to reflect only one side."

Plaintiffs' lawyers, he notes, aren't shy about speaking to the press.

"When you ask the average person who they think of as a great lawyer, they always think about plaintiffs' lawyers. They never think of defense lawyers. I win most of my cases, and I try huge cases," Rosenblum said. "But nobody says 'oh, great, you saved a lot of money.' It doesn't make news."