Can anyone recall the Latin maxim for the legal principal ofprofundus marsupium? Probably not because I just inventedthe term using a Latin translator. It roughly converts to “deep”(profundus) “pockets” (marsupium.) For a largeinsurance carrier, the perception of having “deep pockets” is acommon concern, and based on some trials, it seems there are lawschools aggressively teaching a form of profundusmarsupium.

There is a retail giant in the U.S. whose logo is an enormousred target. Can you imagine an insurer intentionally approaching anad agency and asking, “Can we use a big red bull's-eye?” Manyalready feel like there is a target on their backs.

Judiciary bias

Regardless, it is not unusual to find attorneys who pursue thedeepest pocket regardless of the proportion of fault, perhaps evenletting those more responsible walk away. Concerns of the“targeted” are reasonable, since they are often repeat players inthe same system with plaintiffs cherry-picking defendants in abizarre lawsuit lottery.

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Any deep pocket bias may not be limited to attorneys or juries,but may also emanate from the court itself. According to the 2014Florida case of Great American Ins. Co. of New York v. 2000 IslandBoulevard Condominium Association, a judge told an insurancecarrier to, “Fork over the money.”

A condominium association filed a lawsuit against a carrier thathad not concluded its investigation due to the association'salleged failure to provide documents and submit to an examinationunder oath. Regarding the carrier's inability to make a decision,the judge stated:

JUDGE: We've got a lawsuit filed. We've got aninsurance company that's not paying a claim… You said we would givethem a report when they got all of that information to you. Itstrains all credulity for me to believe that your carrier has notdenied coverage based on the information they know now.

DEFENSE: But they have not (deniedcoverage.)

JUDGE: Then fork over the money.

Regarding a claims correspondence, the judge added:

JUDGE: You can't read the June 26, 2012 letterwithout saying this is a denial letter. “We're not sure?” You cansay “we're not sure” until the cows come home. And, in fact, youwon't be sure until the jury speaks, and then you won't be sureuntil the Appellate Court rules, and then you won't be sure untilthe Supreme Court rules after that…That's just the nature oflitigation. That's how it works.”

The judge continued to show his hostility towards the carrier bycalling their claims letter, “Fancy talk for 'we're not payingyou.'”

The carrier moved to have the judge recused, stating hiscomments showed bias in favor of the plaintiff. A three-judge panelagreed.

In addition to liability, as part of a deep pocket bias, jurorsmay take the financial strength of a company into account whenquantifying an award. This could include the company's status, sizeand recent media attention. The assets of the carrier may be moreimportant to the jurors than any unknown good deeds.

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Spill a cup of coffee…make a fortune

An example that gained notoriety even before social media is the1992 case of Stella Liebeck who was burned by McDonald's coffeethat was purportedly too hot. She was awarded $2.9 million by ajury for punitive damages. If you're curious as to how they arrivedat that sum for a burn from an eight-ounce coffee, according to astory in the Wall Street Journal, the attorney suggestedpenalizing McDonalds for the equivalent of “two days of companywidecoffee sales, estimated at $1.35 million per day.”

Certainly coffee sold by a mom-and-pop cafe would not havereaped the same figure, even for comparable injuries from the sameeight-ounce cup. Despite real injuries, the Liebeck case has sincebeen on top-ten lists and was even a Seinfeld plot. (Inthe Liebeck case, the award was reduced by the judge to $480,000and settled out of court for an undisclosed amount.)

For insurance carriers, such deep-pocket precedents can bedevastating. News of the Liebeck verdict spread like wildfire. Aneditorial in the San Diego Union Tribune stated:

“When Stella Liebeck crumbled her coffee cup as she rode in thecar with her grandson, she might as well have bought a winninglottery ticket…Our guess is that other greedy copycats inrestaurants throughout America soon will be happily dumping coffeein their laps in a bid to make similar killings in thecourtroom.”

So there are juries who have made up their minds before hearingany facts, judges telling insurers to “fork it over,” andmultimillion dollar awards because it's merely a few days'earnings. How can honest, diligent insurance carriers possiblypersevere? Insurers' employees, adjusters and agents work todemonstrate the utmost good faith. So what can insurers do if theother players already have a bias against them?

If prejudices exist, it is important to understand the source.They could be drawn from media coverage involving large carriers orcorporate liability cases (Phillip Morris, GM's extensive recalls.)Even in the entertainment trade, books and movies such as JohnGrisham's The Rain Maker depict an exaggerated bad faithinsurance carrier – and should be required reading for new claimsadjusters (on what not to do).

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Changing the perception of insurers

When potential jurors report for duty, the insurance company maybe a faceless, multibillion-dollar conglomerate. On the other side,the plaintiff is a wounded human; perhaps someone who looks liketheir aunt, uncle, daughter or their favorite teacher. In thiswriter's experience, the cliché can hold true: the defense may becharacters in immaculate suits, displaying staunch poker faces.Consider the first trial you observed and being told not to makeany expressions or show any emotions. Unfortunately, this may havesent the wrong message to the jury.

Insurers can combat any bias by proving what upstanding,professional humans we are. Our companies are not facelessentities. It is crucial to begin demonstrating this instantlyduring voir dire, and then proceeding with the case withwarm people at the table representing our companies.

During voir dire counsel should carefully probe for any biases.Questions in the spirit of: Have you ever had a prior claim withthis carrier? What feelings do you have about this carrier? Wouldany feelings affect your evaluation of the facts? Do you agree thatinsurance companies, as well as people, are entitled to a fairtrial?

It is essential to put a human face on the company. Aknowledgeable, appealing representative seated at the defense tablefrom voir dire through closing arguments can help in an effort tofocus on the people who are part of the carrier rather than just acommissioned “legal team.”

It's unreasonable to have the president of the company or claimsdepartment attend the trial, but a carefully-selectedrepresentative who's amiable and familiar with the claim, can besomeone with whom the jury can place a “face” whenever the companyis mentioned. It will be vital to have the defense becomeacquainted with the representative in preparing the case. Ifexecuted properly, this person should exhibit the opposite of acold, impersonal corporation.

Another cliché to dispel: appearing argumentative or defensive.It may add drama on television to have the attorneys shout “Iobject!” However in the real world, excessive objections can beviewed by a jury as trying to bar a witness from sharinginformation or trying to keep evidence hidden.

Motions made in limine should be considered to avoidunnecessary objections during trial. The motions can be presentedin advance to preclude certain questions being posed in the firstplace. Motions in limine may include prior offers of settlement,expert testimony, evidence not permitted due to statutes, and thelike. Or more significantly, the defendant's net worth on apunitive case can be deliberated in advance.

There is value in working harder to soften the perception oflarge carriers. Through the innovation of social media, newgenerations can see the wonderful ways in which carriers help thosein need. From an advertising standpoint, images are alreadyshifting. In an industry that had been known as a humorlesscommodity, commercials are creating smiles. From the trailblazingads of State Farm to the Geico gecko and Progressive's “Flo,” viewsare changing through outlets that did not exist 20 years ago.

Being cognizant that biases exist is the first step to remedyingthem. Handling claims with the utmost good faith and top-notchservice can soften insurance's image one claim at a time. If itgets to the point of a lawsuit and then trial, insurers cancarefully select juries and provide the best presentation of facts,with real, knowledgeable people at our side.

And maybe one day, law schools will no longer encourage thelegal tactic of profundus marsupium.

Richard Wickliffe, CPCU, ARM, CLU, is a 25-year insuranceprofessional in leadership at one of the nation's largest insurancecarriers. He enjoys writing and speaking about unique claims trendsand his articles have appeared in National Underwriterand SIU Today.