You have the right to an attorney. If you do not like the attorney your insurance company provides to defend a personal injury claim, you may pick your own attorney. In the event of a dispute between your chosen attorney and counsel from the insurance company, you win. The insurance company counsel must follow the trial strategy selected by your attorney.
While this is not exactly like a Miranda warning, it could be just as important in a personal injury trial following a truck accident, Leo Scheuring, a partner in the Sacramento, California, law firm of Scheuring, Zimmerman & Scully, told a general session of the annual meeting of the Refrigerated Division of the Truckload Carriers Association. The meeting was held in Sonoma, California, July 11 to 13, 2001. Scheuring took part in a presentation advising division members how to avoid becoming the victim in a personal injury or employment discrimination suit. Karen Khan, a partner at Kahn Romberger in Arlington, Virginia, and a former attorney for the Equal Employment Opportunity Commission, made the employee discrimination presentation.
The best protection against lawsuits is an operating record that prevents suits from being filed. However, no carrier can be totally free from risk. Of course, good lawyers can help prevent loss in court. The most productive defense is a lobbying effort that changes the way the law is applied to personal injury suits, Scheuring said.
Seek Changes to Law
In general, lawsuits are built from three parts — general damages, wage loss and medical bills, and punitive damages. Those at risk from personal injury suits should be looking at ways to reduce their risk, Scheuring said. While it is not an immediate fix, the best solution is a change in the law to cap general damages. Another solution is to change the rules of evidence so that evidence of collateral sources becomes admissible. Simply put, getting evidence of collateral sources admitted allows a defendant to show that lost wages and medical bills have been paid by insurance, he said.
Although all motor carriers want to operate accident-free, that simply does not reflect reality. As soon as an accident occurs, the carrier faces the prospect of a suit, Scheuring said. Carriers can be sued even when an accident clearly is not their fault. This is based on the theory of comparative fault. A jury can find that an accident is 90% the fault of the victim or another party and still award a huge judgment that represents its view of 10% of potential damages.
Some things need to be done immediately following an accident. First, inform the appropriate insurance authorities, Scheuring said. Next, retain experts who can evaluate the accident. These experts should be independent from those assigned by the insurance company. Independent analysts are necessary, because law enforcement does make mistakes. The highway patrol does the best it can at accident scenes, but it has two primary goals that supersede investigating any accident. The first is to prevent subsequent accidents at the site of the first crash, and the second is to restore safe, normal traffic flow. Independent accident analysis is necessary to provide an accurate picture of events.
Find Experienced Counsel
The experience level of the lawyers assigned to an accident case should be considered, Scheuring said. Many insurance companies assign junior personnel to initial investigations. These junior lawyers are probably just out of law school. “Secretaries working for trial lawyers in a firm that specializes in personal injury defense probably know more about accident investigation than a junior associate just out of law school,” he said.
Insurance companies generate a constant stream of reports while they work up an accident case. As a client of the insurance company, the motor carrier is entitled to see all that reporting, Scheuring said.
Motor carriers purchase insurance to protect them from claims. Insurance offers good protection against general damages and lost wages and medical bills. In general, however, carriers cannot insure against punitive damages, which result from actions that the law calls willful and wanton misconduct contributing to an accident, Scheuring said. Those are such things as a drunk driver or obviously unsafe equipment.
In the case of a drunk driver, he has to be fired immediately, Scheuring said. “The driver may be a loyal employee, but keeping him on the payroll after an accident is a sign that the company ratifies the driver's willful and wanton misconduct,” he said. “If the driver is fired immediately, he can be held liable for punitive damages, but the company cannot.”
Insist on Removal of Punitive Liability
This is where cooperation between the carrier and an insurance company is vital. Once a suit has been filed, it becomes obvious where the liability lies. If the company has done its part correctly, then it must insist that the insurance company do everything possible to remove the carrier from punitive damage liability, Scheuring said.
In California and some other states, a defendant is entitled to separate counsel, independent of the insurance company, but whose fees are paid by the insurance company. This independent lawyer has absolute control over the conduct of a case, Scheuring said. For instance, the independent lawyer can insist on additional discovery and can set trial strategy regardless of the wishes of the insurance company.
Obviously, the best solution is to resolve all claims without going to trial. When a claim arises, motor carriers should demand that their insurance company settle it within the limits of the insurance policy, Scheuring said. In that regard, carriers protect themselves from claims most effectively by buying insurance with the largest limits possible. If the insurance company refuses to settle within the policy limits, goes to trial and loses, the loss belongs to the insurance company, not the policyholder.
Seek Arbitration of Employment Claims
The Supreme Court has held that arbitration of employment discrimination claims is a valid way to settle claims, Karen Khan said. Arbitration is a trend in employment law and may actually be the best option, because juries always represent a gamble. No matter how many times a lawyer has tried an employment case, going in front of a jury is just the same as rolling dice, she said.
The best way to avoid employment claims is to manage the equal employment process carefully, Khan said. To avoid claims, employers must take their obligations under the employment laws seriously and administer them fairly. “That's the best protection,” she said. “Follow the law and things will be alright. That's not a promise of no claims, but it is a promise of reasonable outcomes.”
Take the hiring process seriously, Khan said. Do all the background checks necessary to ensure that applicants are who and what they say they are. A simple reason for this is that liability arising from negligent hiring is not subject to any monetary caps in most states.
Promote Company Policies
One big part of the hiring process is getting applicants to acknowledge receipt of the company policy handbook. Get a signed statement that new employees have been given copies of company policy, that they have read the policies, and that they understand the policies. By the same token, make sure that managers responsible for application of company policy are well trained, that they know the policies, and that they know how to interpret policies for employees, she said.
Another important way to limit risk from employment claims is to purchase insurance. It is called employment practices liability insurance, Khan said.
However, arbitration is the best way to limit liability. Put a requirement for binding arbitration into company employment policy, Khan said. Include a notice requiring arbitration in the employment application. Check the law carefully to make sure that the notice is worded properly and presented to employees correctly. When the arbitration policy is implemented, go to all present employees and get a signed statement acknowledging the change in company policy. This may require an accommodation for some employees, because the change was made after they were hired.
The important thing is to notify employees that arbitration of employment disputes is mandatory. Present employees may not want to agree to the change, but they can be required to consent as a condition of employment. Employees cannot dictate the terms and conditions of their employment to the company, Khan said.