Friday, November 22, 2002

As a Wisconsin personal injury lawyer, I have long known that insurance companies engage in business practices, which sometimes include targeting certain types of claims or people, hiring biased physicians and doctors to do medical exams, destroying records and hiding information, etc. Sometimes such cases result in "bad faith" litigation against the insurer, but more often insurance companies get away with such conduct. For this reason, we, personal injury lawyers, relish the moment when an insurer is caught red-handed by a court of law, especially a federal court.

A recent case was in U.S. District Court where a judge upheld a multi-million dollar bad faith jury verdict against insurers Paul Revere Life Insurance Company and UnumProvident Co. The decision states:

"There was testimony at trial that Paul Revere adopted Provident’s claims handling policies as part of the transition when it was acquired by Provident, including targeting certain categories of claims, and that Paul Revere employees admitted to such practices as destruction of the original medical reports from examining physicians, not knowing the California definition of total disability, and adopting a policy of failing to document claims processes in the file. There was testimony from experts and others that Defendants used a biased medical examiner, failed to advise its insured of covered benefits, targeted claims like hers for termination, failed to settle a claim when liability was clear, and forced its insured to litigate to obtain benefits. Based on the evidence presented at trial, this court concludes that Defendants have violated the Unfair Insurance Practices Act, Insurance Code §790.03, and that their bad faith in doing so, as found by the jury in this case, constitutes a violation of Cal. Bus. & Prof. Code §17200."

In addition to upholding the jury verdict the judge went one step further making a heroic order, which states:

"The court finds it more appropriate in this instance to order Defendants to obey the law, and hereby enjoins them from future violations, including but not limited to, targeting categories of claims or claimants, employing biased medical examiners, destroying medical reports, and withholding from claimants information about their benefits." See the full UNUM decision.