IRC Survey: Plaintiff Lawyers Don't Satisfy

By Mark E. Ruquet

NU Online News Service, Aug. 20, 3:53 p.m. EDT?Auto injury victims who hire an attorney are less likely to be satisfied with their total payment than people who settle directly with insurers, a new study said.[@@]

The Insurance Research Council released the findings of its fifth consumer panel survey focusing on auto injuries "from the perspective of a person injured in an auto accident" within a three-year period.

This report covers 1998 to 2002, IRC said. IRC is a division of the American Institute for Chartered Property Casualty Underwriters and the Insurance Institute of America, based in Malvern, Pa.

According to IRC, the study found that 74 percent of those who did not hire an attorney were satisfied with their payment, compared to only 49 percent who had an attorney represent them. The non-represented claimants said they had faster claims settlement than those with an attorney.

While claimants represented by an attorney reported a higher gross payment, attorney fees and expenses, on average, took 32 percent of the claim, contributing to the dissatisfaction.

Most of the increased cost in medical care was attributed to those represented by an attorney. Between 1998 and 2002, average medical expenses increased from $4,436 to $5,405 for non-represented claimants, while represented claimants average medical care costs rose from $12,878 to $25,734.

Those hiring an attorney were more likely to report a disabling effect from their injury, the survey found.

In 2002, 43 percent of people filing an auto insurance claim hired an attorney, the highest percentage since 1977, and a three percent increase from 1998, IRC said.

"Attorney involvement is clearly driving up the cost of medical care for auto accident victims," said Elizabeth A. Sprinkel, senior vice president of the IRC, in a statement. "Yet more medical care for people who hire an attorney evidently does not always produce satisfaction with the final settlement. Other factors, such as the timing of the payment, affect how accident victims feel about the settlement of their claim."

Carlton Carl, vice president and director of media relations for the Trial Lawyers Association, was skeptical of the report.

"It's an insurance industry document designed to lift up the insurance industry, not designed to tell the truth," he said.

Mr. Carl said the reason medical rates are so much higher for those cases represented by lawyers is because attorneys are taking on the most serious cases that require legal redress because the industry refuses to pay the victim.

On the issue of contingency fees, he said it is the only system available for the "least powerful to go against the most powerful and hold them accountable," adding that most clients could not afford to pay an attorney by the hour.

The 2002 sample consisted of 3,478 individuals from 2,866 households who were injured in an auto accident between Jan. 1, 1999 and June 30, 2002. The mailed survey was conducted in June and July of 2002.

While 23 percent of those surveyed reported a fracture or serious injury (unchanged from its 1998 survey findings), the use of health care services increased. There were more visits made to different types of medical professionals, such as occupational therapists, which increased by 50 percent.

Average total payments increased from $9,607 in 1998 to $16,002 in 2002.

In 2002, 77 percent of payments went to 19 percent of claimants with losses of more than $10,001. In 1998, the figure was 13 percent.

More information on the report, Paying for Auto Injuries: A Consumer Panel Survey of Auto Accident Victims, and how to obtain copies is available at www.ircweb.org.

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IRC Survey: Plaintiff Lawyers Don't Satisfy

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