Last month your resident image-smasher took a look at the baneof all auto claim adjusters, the low impact soft tissue (LIST)claim, where claimants or insureds who could not conceivably havebeen injured in a minor collision are suddenly seriously hurt andrepresented by counsel, treating with expensive physicians. Is itreal, or is it borderline fraud? This month we explore these claimsa bit further, seeking insight into causation and how to deal withthem.

We hear a lot about pain these days. There is the daily dose oftelevision ads for one or another pain reliever. One says that“nothing is better” — one person who tried it agreed. Taking“nothing” was just as good, maybe better! (I'd fire the advertisingexecutive who dreamt that one up.) Arthritis sufferers experiencedeven pain when Vioxx was taken off the market; it had broughtrelief to millions of arthritis suffers, better than other similarmedications in many cases. Hopefully our medical system will find asafe substitute.

Like it or not, pain is real. For young men and women handlingauto injury claims, pain may be difficult to imagine. Imaginationis necessary for empathy with the injured claimant or insured. Notsympathy — that's something else, and probably has no place in ourbusiness. But if we cannot empathize with the people we must dealwith, and view the world from their perspective as well as our own,we may be in for a difficult career.

Understanding the mechanisms of pain may well be necessary inthe injury claim business. It is a mystery, often tied to emotions,but ultimately it is usually very real, regardless of whether ithas physical or only mental origin. In workers' compensationclaims, for example, injuries often are categorized asphysical-physical, mental-physical, physical-mental, andmental-mental. The first is a purely physical injury manifestedwith physical symptoms. The second is an emotional or mentalsituation that brings on a physical manifestation, an emotionalsituation that triggers a heart attack, for example. Aphysical-mental situation is one where the injury is so serious ordebilitating that it causes emotional or mental problems. Thisoften occurs in serious accidents where pain is so severe thatstrong medications are needed, which in turn create social,emotional, or mental problems. The final stage, one not legallyrecognized by all state workers' compensation laws, is the purelymental injury, now popularly known in Vietnam and Iraq war veteransas post-traumatic stress disorder (PTSD). For those with it, thereis no doubt that it is disabling. Even the Doonesbury cartoonseries featured it in 2006. Auto injury claim adjusters mayencounter it in the so-called mental anguish or emotional distressclaim, an aspect of general damages that, if awarded, can requirereporting to the IRS.

“Pain is something that happens in the mind and nowhere else,”wrote pain specialist Dr. Alfred Byrne, in the magazine Tropic.“For this reason we can never be sure that animals experience it,though their behavior may make us suspect that they are havingexperiences similar to ours. Yet although pain is really mental, weare accustomed to linking it invariably to physical damage, tobangs, blows, and cuts. Because of the difficulty in distinguishingbetween the physical cause of pain and the mental experience whichactually constitutes it, it is extraordinarily difficult to definepain neatly.”

One of the worst pains is a disease called tic douloureus,suggests Dr. Bonica, who directed a pain clinic at the Universityof Washington. Another chronic and inexplicable pain syndromeoccasionally encountered in claims is reflex sympathetic dystrophy,a condition that appears to have no causation, but can be entirelydebilitating. Though it only affects about seven million people, itmay prove totally disabling unless it is diagnosed and treatedwithin the first three to six months. It affects skin texture,causes rashes, muscle atrophy, and sensitivity to touch orvibration. It is as if the sympathetic nervous system has simplygone berserk.

In 1979 Dr. Stephen F. Brena, director of the Pain ControlCenter of Emory University in Atlanta, wrote, “It is now all tooclear that chronic pain has become a problem of great magnitude,both medically and socially. The American society is awakening tothe fact that pain is not necessarily a symptom of some disease,but is a disease entity within itself. Chronic pain is pain thatcontinues to manifest itself long after the original traumaticcause for the pain has been cured. It disables and it costs money,seemingly without cure. Treatment, once medications become useless,includes biofeedback and other means of rehabilitation.” Evenelectrical stimulation of peripheral nerves or the dorsal spinalcord have been attempted for pain relief.

Is the Answer in Surgery?

In 1975, Consumer Reports cited a study in which a shamoperation, with all the trappings of a real one, may be just aseffective at curing pain as real surgery. Mental healing, fromfaith healers to native shamans complete with mask and rattle, mayoffer various degrees of success in pain alleviation.

How should insurers respond to allegations of “I hurt”? Thereare studies that demonstrate represented claimants take longer torecover from injuries than unrepresented claimants. There also isthat curious phenomenon where the party liable in the accident isonly rarely injured while the parties not a fault are injured. Someinsurers simply practice the cure of the “green poultice”: Applymoney, and the pain disappears.

So the fastest and maybe ultimately the cheapest way of dealingwith a LIST claim may be to not try to fight it in court withdenials, trials, and examinations, some insurers believe.

On the Other Hand…

Some insurers take a firm – even as rigid as a stone-wallfirmness – stance on LIST claims, especially with alternativemedical providers and high bills with no serious auto damage. Thefact that all too often their claims are settled with attorneys andunrepresented claimants for less than the medical expensespresented leads one to suspect that the billing, pain andsuffering, and extent of injury were greatly exaggerated. I won'tgo so far as to call it fraud. It is only criminal intent thatconstitutes fraud, and that is awfully difficult to prove. Fewinsurers will try, despite the encouragement of their SIUspecialists, because it gets one into deep trouble.

Consider the case of Crackel, for example, in which an overlyaggressive defense of an injury, deemed of little value due tolight impact, soft tissue, resulted in an abuse of process verdictagainst the insurer. (Crackel v. Allstate, 207 Az. 345, 85 P.3d 925(App. Div., 2004, reporting possible withdrawn and superseded onreconsideration at 208 Az. 252, 92 P.3d 882.) It was a typicalrear-end collision, with the claimants taken to the emergency roomwith the claimant driver and passenger each sustaining less than$1,000 in medical expenses. They brought a claim against thenegligent driver, and the insurer elected to defend on the basisthat it was a minor impact, soft tissue claim, which that insureralways vigorously defended. An amount of $101 dollars was offeredagainst medicals of $890 on the driver and $720 on the passenger.These were later increased to $801 and $1,001 respectively. Atarbitration, awards of $2,300 and $3,400 were entered. The insurerappealed the arbitration, and at a subsequent settlement conferencethe judge ruled that the insurer and its defense counsel had notparticipated in good faith. The crux of the matter was that thebad-faith suits that resulted cost the insurer awards of $15,000.Whether the case still stands two years later is not clear, butwhat is clear is that (as discussed in this column in July) theLowball & Stonewall Insurance Company may well be handed itshead by a jury.

But let's not sell juries short. Shown evidence that there waslittle damage to the vehicles, no immediate complaints of pain, notreatment until representation, and similar factors, many LISTclaims settle for a fraction of the medical expenses. Both thephysicians and attorneys know that the billing may be “high” (I'llnot use the word “inflated,” but…) so things may not necessarily beexactly as stated in the typical “claim package” wrapped up andsent to the insurer with a policy-limits demand to be paid in twoweeks after a year and a half of no information at all.

A Matter of Information

In most cases, if it is not clear whether an injury islegitimate or not, the adjuster may not have enough information. Ifa claimant is represented, then it is the attorney's job to provethe damages. Many just submit bills, some with medical coding butlittle else to explain the causation, diagnosis, treatment, andprognosis. Even if the statute is about to run, request details.That attorney has to prove his case, in or out of court. Anindependent medical exam may or may not be helpful. A year or moreafter the accident, what is a physician going to be able to saythat isn't already known? But go for the facts. If both sides agreeon the facts, negotiation is far easier.

The insurer usually can't prove there was no pain or injury. Iffraud is suspected, then that's another matter, but that is adifficult and expensive toll road. Again, go with the facts. Ifthere were x-rays or MRIs or CAT scans, review the findingscarefully. But look at other factors as well. What is theclaimant's employment? Could that affect the injury, or be acontributing factor to the pain that is being alleged? Whatactivities does the person undertake? One unrepresented LISTclaimant I questioned let it slip that he lifted weights at a gym.If so, how could he have been so fragile in the accident? Well, hejust was, he said, but he quickly got the message that big buckswere not soon to be flowing in his direction.

Be empathetic, but curious. Ask questions, probe, and listen tothe answers. Attorneys love to intimidate. They are trained to beadversarial. Adjusters are usually the “nice guys,” but don't beintimidated. The attorney still has to prove his case. Of course,don't play with fire. If the information shows a serious injury andclear liability, get it settled ASAP (We're talking LIST here, notthe serious accident).

Even if modern science puts us all in automatic moving machineswith no drivers, there probably always will be the allegation ofpain from whatever. I recall one young adjuster asking the attorneyhow hurt his client really was. I only heard one side of theconversation, but the adjuster commented, “Aww, heck! I got hurtworse than that just riding the roller coaster at the amusementpark, and I had to pay 10 bucks to get in!” I guess that claim wasprobably only worth 10 bucks.

Ken Brownlee, CPCU, is a former adjuster and risk manager,based in Atlanta, Ga. He now authors and edits claim-adjustingtextbooks.