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

We hear a lot about pain these days. There is the daily dose of television 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 advertising executive who dreamt that one up.) Arthritis sufferers experienced even pain when Vioxx was taken off the market; it had brought relief to millions of arthritis suffers, better than other similar medications in many cases. Hopefully our medical system will find a safe substitute.

Like it or not, pain is real. For young men and women handling auto injury claims, pain may be difficult to imagine. Imagination is necessary for empathy with the injured claimant or insured. Not sympathy — that's something else, and probably has no place in our business. But if we cannot empathize with the people we must deal with, 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 in the injury claim business. It is a mystery, often tied to emotions, but ultimately it is usually very real, regardless of whether it has physical or only mental origin. In workers' compensation claims, for example, injuries often are categorized as physical-physical, mental-physical, physical-mental, and mental-mental. The first is a purely physical injury manifested with physical symptoms. The second is an emotional or mental situation that brings on a physical manifestation, an emotional situation that triggers a heart attack, for example. A physical-mental situation is one where the injury is so serious or debilitating that it causes emotional or mental problems. This often occurs in serious accidents where pain is so severe that strong medications are needed, which in turn create social, emotional, or mental problems. The final stage, one not legally recognized by all state workers' compensation laws, is the purely mental injury, now popularly known in Vietnam and Iraq war veterans as post-traumatic stress disorder (PTSD). For those with it, there is no doubt that it is disabling. Even the Doonesbury cartoon series featured it in 2006. Auto injury claim adjusters may encounter it in the so-called mental anguish or emotional distress claim, an aspect of general damages that, if awarded, can require reporting 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 having experiences similar to ours. Yet although pain is really mental, we are accustomed to linking it invariably to physical damage, to bangs, blows, and cuts. Because of the difficulty in distinguishing between the physical cause of pain and the mental experience which actually constitutes it, it is extraordinarily difficult to define pain neatly.”

One of the worst pains is a disease called tic douloureus, suggests Dr. Bonica, who directed a pain clinic at the University of Washington. Another chronic and inexplicable pain syndrome occasionally encountered in claims is reflex sympathetic dystrophy, a condition that appears to have no causation, but can be entirely debilitating. Though it only affects about seven million people, it may prove totally disabling unless it is diagnosed and treated within the first three to six months. It affects skin texture, causes rashes, muscle atrophy, and sensitivity to touch or vibration. It is as if the sympathetic nervous system has simply gone berserk.

In 1979 Dr. Stephen F. Brena, director of the Pain Control Center of Emory University in Atlanta, wrote, “It is now all too clear that chronic pain has become a problem of great magnitude, both medically and socially. The American society is awakening to the fact that pain is not necessarily a symptom of some disease, but is a disease entity within itself. Chronic pain is pain that continues to manifest itself long after the original traumatic cause 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.” Even electrical stimulation of peripheral nerves or the dorsal spinal cord have been attempted for pain relief.

Is the Answer in Surgery?

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

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

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

On the Other Hand…

Some insurers take a firm – even as rigid as a stone-wall firmness – stance on LIST claims, especially with alternative medical providers and high bills with no serious auto damage. The fact that all too often their claims are settled with attorneys and unrepresented claimants for less than the medical expenses presented leads one to suspect that the billing, pain and suffering, and extent of injury were greatly exaggerated. I won't go so far as to call it fraud. It is only criminal intent that constitutes fraud, and that is awfully difficult to prove. Few insurers will try, despite the encouragement of their SIU specialists, because it gets one into deep trouble.

Consider the case of Crackel, for example, in which an overly aggressive defense of an injury, deemed of little value due to light impact, soft tissue, resulted in an abuse of process verdict against the insurer. (Crackel v. Allstate, 207 Az. 345, 85 P.3d 925 (App. Div., 2004, reporting possible withdrawn and superseded on reconsideration at 208 Az. 252, 92 P.3d 882.) It was a typical rear-end collision, with the claimants taken to the emergency room with the claimant driver and passenger each sustaining less than $1,000 in medical expenses. They brought a claim against the negligent driver, and the insurer elected to defend on the basis that it was a minor impact, soft tissue claim, which that insurer always vigorously defended. An amount of $101 dollars was offered against medicals of $890 on the driver and $720 on the passenger. These were later increased to $801 and $1,001 respectively. At arbitration, awards of $2,300 and $3,400 were entered. The insurer appealed the arbitration, and at a subsequent settlement conference the judge ruled that the insurer and its defense counsel had not participated in good faith. The crux of the matter was that the bad-faith suits that resulted cost the insurer awards of $15,000. Whether the case still stands two years later is not clear, but what is clear is that (as discussed in this column in July) the Lowball & Stonewall Insurance Company may well be handed its head by a jury.

But let's not sell juries short. Shown evidence that there was little damage to the vehicles, no immediate complaints of pain, no treatment until representation, and similar factors, many LIST claims settle for a fraction of the medical expenses. Both the physicians and attorneys know that the billing may be “high” (I'll not use the word “inflated,” but…) so things may not necessarily be exactly as stated in the typical “claim package” wrapped up and sent to the insurer with a policy-limits demand to be paid in two weeks 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 is legitimate or not, the adjuster may not have enough information. If a claimant is represented, then it is the attorney's job to prove the damages. Many just submit bills, some with medical coding but little else to explain the causation, diagnosis, treatment, and prognosis. Even if the statute is about to run, request details. That attorney has to prove his case, in or out of court. An independent medical exam may or may not be helpful. A year or more after the accident, what is a physician going to be able to say that isn't already known? But go for the facts. If both sides agree on the facts, negotiation is far easier.

The insurer usually can't prove there was no pain or injury. If fraud is suspected, then that's another matter, but that is a difficult and expensive toll road. Again, go with the facts. If there were x-rays or MRIs or CAT scans, review the findings carefully. But look at other factors as well. What is the claimant's employment? Could that affect the injury, or be a contributing factor to the pain that is being alleged? What activities does the person undertake? One unrepresented LIST claimant 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, he just was, he said, but he quickly got the message that big bucks were not soon to be flowing in his direction.

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

Even if modern science puts us all in automatic moving machines with no drivers, there probably always will be the allegation of pain from whatever. I recall one young adjuster asking the attorney how hurt his client really was. I only heard one side of the conversation, but the adjuster commented, “Aww, heck! I got hurt worse than that just riding the roller coaster at the amusement park, and I had to pay 10 bucks to get in!” I guess that claim was probably only worth 10 bucks.

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

Special Reports /

No Pain, No Gain

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