Insurers hit the trifecta this week! First Eliot Spitzer had to step down as New York's crusading governor after a prostitution scandal, then trial attorney extraordinaire Dickie Scruggs pled guilty to bribing a judge in a Hurricane Katrina suit. Now the king of class-actions, Melvyn I. Weiss, copped a plea for his role in a scam to drum up plaintiffs. Why isn't Congress investigating this parade of misconduct by officers of the court?
As reported by our own Dan Hays, Mr. Weiss agreed yesterday to plead guilty to a federal racketeering charge, pay a $10 million fine and accept a jail sentence of up to 33 months for his illegal plaintiff recruitment activities in connection with hundreds of class lawsuits. (Click here for the complete story.)
This kickback scheme lasted for more than 25 years and had a severely detrimental effect on the administration of justice across the nation as lies were routinely made to judges, said U.S. Attorney Thomas P. OBrien in Los Angeles. The scheme was based in greed, and it affected the integrity of the courts and the interests of an untold number of absent class members.
What a month! Insurers saw three of their biggest nemeses eliminated in two weeks.
What gets me, however, is the deafening silence out of Washington.
When insurers step out of line–such as when bid-rigging and contingency fee abuse was exposed, or when thousands of policyholders were left bare after questionable Hurricane Katrina claims-handling–Congress rushed to probe the business, vowed to pass sweeping reforms and threatened to revoke the industry's cherished federal antitrust exemption.
However, I don't see Congress rushing to investigate the plaintiffs bar, despite the outrageous criminal behavior of two of the profession's highest-profile litigators. As far as I understand the system, lawyers are state-licensed. Perhaps the Feds should take over! (Or shall we have an optional federal license for attorneys?)
I guess Congress is averting its gaze because just about all of our legislators are members of the bar themselves. Let he who is without sin cast the first stone, right?
Of course, as I said when Spitzer and Scruggs came crashing down because of their self-inflicted wounds, this doesn't mean insurers or brokers are saints, or that they weren't guilty of the wrongdoing they were caught committing.
But it must feel good among the vast majority of those who conduct business honestly and honorably in the insurance community to see the shoe on the other foot for a change.
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