Every month, millions of us pay our car insurance premiums. We also pay our homeowner’s insurance premiums, and we pay premiums out of our paychecks for health insurance, life insurance, and more. We pay for insurance to protect us and our loved ones from the unthinkable: an accident, severe injuries, a fire that burns our house down, a tornado, and even death. More than that, we pay so that our families and neighbors won’t be left with the bill from these events.

It’s part of being a responsible, decent human being. Every single one of us has made a mistake in the past, and when that mistake results in a car wreck that injures someone else, we have an obligation to that person to make sure they’re taken care of when the medical bills come. We also have an obligation to our families and those who depend on us, because if we don’t have insurance, we could be facing lawsuits that could threaten everything we’ve worked hard for: our homes, our savings, and even our future earnings.

There are at multiple parties in any accident, such as the responsible party, the victim, and the insurance companies. The responsible party and the victim met their responsibility to each other by purchasing insurance coverage, but what happens when the insurance company doesn’t want to meet its responsibility? What happens when a victim has $15,000 in medical bills, but the insurance company only wants to pay out $5,000, even though the insurance policy insures up to $25,000 in damages?

Every day across this country, that scenario plays out. Millions of victims face off with an insurer who looks at them as an individual without the power or the resources to force the insurer to meet its obligations. You’re injured, you’re out of work, and you’re in a hurry to pay for your bills. Insurance companies know this, and they’ll use that to their advantage.

Even though you paid your premiums, and even though the person responsible for your injuries paid his premiums, his insurance company wants to step over a dollar to pick up a dime at your expense. The insurance company wants to get something for nothing. They want to take our hard earned money that we spend on insurance premiums and deny us the coverage we’ve paid for when we’re sick or injured.

Insurance companies spend hundreds of millions of dollars each year portraying accident victims as greedy, opportunistic individuals looking to get rich quick. The insurance companies say that lawsuits aren’t about recovering money for medical bills; instead, lawsuits are about making a profit on an accident. If that was the case, we’d have an epidemic of people in this country deliberately getting hurt. We don’t.

We have plenty of people who commit insurance fraud by pretending to be injured, but what we don’t have are people deliberately getting into accidents in order to suffer actual catastrophic injuries. It’s common sense: you can’t pay anyone to get severely burned, suffer paralysis, or risk a lifelong complication from a catastrophic injury.

The history of personal injury and the facts underlying the rise of personal injury as a distinct area of law completely contradict what insurance companies portray as reality.

The History of Personal Injury

Personal injury hasn’t always been a distinct area of the law. For the vast majority of human history, injuries were covered under the principle of retribution, or what you know as “an eye for an eye.” If you injured another person, you were to be repaid in the same manner. Over time, this evolved into more civilized forms of legal redress, with the rise of both statutes or written laws and common law or judge made law.

There were two major events that led to the rise of legal remedies for injuries to individuals: one was the Industrial Revolution, and the other was the rise of the automobile. With the Industrial Revolution, workplace injuries were becoming more common, which led governments to pass laws that allowed for workers to sue their employers for their injuries.

Over time, the government began to view injury lawsuits as a potential threat or hindrance to commerce, and Worker’s Compensation was worked out as a solution. In order to limit lawsuits by workers, a system of insurance coverage was worked out to compensate workers for on the job injuries. This kept such cases out of the courts, and limited the potential for large verdicts that could financially cripple an employer and result in the loss of jobs.

By the 20th century, two landmark cases, Palsgraf v. Long Island Railroad Company and Donoghue v. Stevenson, established proximate cause and negligence. Proximate cause established certain injuries as a natural consequence of certain acts. Negligence established the idea that a duty of reasonable care was present between a producer and a consumer, as well as any neighbor to the consumer.

What does it mean to be a “neighbor” to a consumer? Before Donoghue, only the tortfeasor-the person who commits a tort that injures someone-and the immediate party could be part of a negligence claim. That is, if you purchased a beer that was poisoned due to the negligence of its manufacturer, and you gave your neighbor that beer at a party and they were poisoned, your neighbor could not sue because they were not a party to the original transaction. They didn’t buy the beer, you did. The tortfeasor didn’t owe them a duty of care, he only owed the purchaser of his product a duty of care.

Donoghue extended the concept of negligence beyond immediate parties who purchased a product to end users who consumed the product. It established that the duty of reasonable care to ensure the safety of a product extended beyond the producer and the purchaser to anyone who consumed the product.

These two cases revolutionized what would later become a distinct field of law: personal injury. By the 1960s, with the rise of the automobile as a mode of personal transportation and the corresponding increase in car accidents, many attorneys and firms were suing to recover damages for injuries suffered in car accidents. However, the damage awards were small.

Then came Unsafe at Any Speed by Ralph Nader, a book that detailed the American auto industry’s deliberate decisions to design their cars without regard for passenger safety. The most famous chapter of the book dealt with the Chevrolet Corvair, which was a rear-engine vehicle with a swing-axle suspension design. General Motors knew that the car was unstable; one of their suspension mechanics, George Caramagna, fought internally to include an anti-sway bar on the Corvair. He was overruled because General Motors wanted to save money.

As a result, General Motors manufactured the Corvair for four years between 1960 and 1964 without the anti-roll bar, and Corvairs were prone to roll over with two or more passengers.

If you’ve ever wondered why your car has an automatic transmission organized by P R N D L, it’s because of Ralph Nader’s book. Early automatic transmissions were organized by a P N D L R, which led to drivers moving the shift lever down to reverse rather than low gear by accident. In addition, your car door has a “Nader bolt” which prevents the car door from flying open in a crash. From 1966 onward, every car sold in the United States has been equipped with a Nader bolt.

This is because manufacturers, like insurance companies, often decide to step over dollars to pick up dimes at the risk of your safety and well-being. After all, what can you do? You’re just an individual. Big corporations have a massive advantage in terms of resources to fight off lawsuits.

They also have huge resources to control the narrative in the media when it comes to lawsuits. That’s why you hear all about the ridiculously high punitive damages corporations face in personal injury or class action lawsuits. What you don’t hear about is the deliberate decisions corporations make to cut corners by risking the lives of consumers.

The most infamous example of this is the 1971 Ford Pinto. Ford knew that the Pinto’s design was flawed: in a rear-end collision, the fuel tank would rupture and cause fires, but Ford’s accountants wrote a memo detailing that it would be cheaper to settle wrongful death lawsuits resulting from the defect than it would be to fix the design flaw. How much would it have cost Ford to make the Pinto safe? $11 per car.

Ford chose to put a car on the road that would burn people alive in an accident, as opposed to spending a mere $11 per car to fix the design flaw that would kill 900 people. Ford wound up paying out millions of dollars in wrongful death settlements for its decision to save $11 per car. 900 families lost their loved ones as a result of Ford’s willful decision to manufacture a car that would burn its occupants alive in a crash.

After the Corvair and the Pinto, it was no wonder that the first television advertisement for a personal injury law firm premiered in 1979.

As time went by, the efforts of insurance companies and big corporations to re-victimize people who suffered horrible injuries grew over time. In addition to dealing with their injuries, victims had to contend with insurers and businesses portraying them as greedy for simply wanting their medical bills paid. At no point did the insurance companies and big businesses ever acknowledge that one of the reasons personal injury awards and settlements were so expensive was a deliberate decision on the part of insurance companies and businesses to avoid responsibility and limit risk.

Lying About the Victim: How McDonald’s and State Farm Added Insult to Injury

February 27, 1992 began for Stella Liebeck like a normal day begins for many of us: waiting in a drive through lane for our coffee. Liebeck’s car didn’t have cup holders, so her grandson parked the car in order for her to add cream and sugar. When Liebeck placed the coffee cup between her knees and and pulled the lid off of the cup, the coffee spilled into her lap. It scalded her thighs, buttocks, and groins, resulting in third degree burns. Liebeck was in the hospital for eight days, and she went from 103 lbs to 83 lbs, and she was partially disabled.

Originally, Liebeck tried to get $20,000 to cover her $10,500 in past medical expenses, her $2,500 in anticipated future medical expenses, and the $5,000 in lost income her daughter suffered by missing eight weeks of work to take care of her mother. McDonald’s offered just $800, even though it was undisputed that Liebeck had at least $10,500 in medical expenses.

Liebeck got a lawyer, who filed suit and offered to settle with McDonald’s for $90,000. Morgan then offered a settlement of $300,000 after a mediator recommended a $225,000 settlement. McDonald’s refused all of these attempts to settle. At trial, Liebeck’s attorney showed internal documents from McDonald’s that proved McDonald’s knew of 700 other incidents where its coffee had burned people. McDonald’s had settled claims for over $500,000 in the past.

Despite the fact that McDonald’s knew its required coffee temperature of 180-190 degrees was unsafe, and that it had resulted in 700 other burn incidents, McDonald’s continued its unsafe practices. Inn fact, McDonald’s quality control manager Christopher Appleton said that 700 injuries weren’t enough of a reason to change the practice.

The jury awarded Liebeck $200,000 in compensatory damages, but reduced this by 20% because Liebeck was found to be 20% at fault. The jury also awarded $2.7 million in punitive damages, which the judge reduced to $480,000. Eventually, the case settled out of court.

McDonald’s could have settled the entire case for $20,000. Instead, they gambled that they’d be able to push Liebeck around and give her a mere $800 or nothing at all for her $10,500 in past medical expenses and her $2,500 in future medical expenses. McDonald’s stepped over a dollar to pick up a dime, and lost big.

After the case, McDonald’s and advocates of tort reform blamed the victim. Even though McDonald’s knew keeping its coffee at scalding temperatures was dangerous, and had burned 700 other people, McDonald’s kept risking injuries to its own customers. Those who defended McDonald’s called Liebeck greedy, and held her up as a pariah. They misrepresented the facts by acting as if Liebeck had put the cup between her legs while she was driving the car.

Stella Liebeck wasn’t greedy: she only asked for $20,000 to cover her medical bills and the time her daughter missed from work. McDonald’s got greedy, and in their greed they lost a lot more than $20,000.

Sadly, this kind of behavior isn’t limited to businesses. Insurers get greedy, too. Everyone reading this article has seen the State Farm commercials, and you know the jingle: “Like a good neighbor, State Farm is there!” What happens when an insurance company isn’t a good neighbor?

In 1981, Curtis Campbell and his wife Inez Preece Campbell were driving along a highway in Cache County, Utah, when he decided to pass six vehicles. When he moved into the other lane, he drove directly into the path of Todd Ospital, who swerved to avoid Campbell and hit Robert G. Slusher. Ospital was killed, and Slusher was permanently disabled.

Witnesses and investigators pinned the fault on Campbell, and his insurance company State Farm decided not to settle with the Slusher and Ospital, who were willing to settle for the policy limit of just $50,000. State Farm told Campbell that he had no liability for the accident, and that there was no need for Campbell to get his own attorney.

The case went to trial, and the jury found Campbell 100% at fault. They awarded damages of $185,849. State Farm then refused to pay the verdict in excess of the $50,000 policy limit, and it refused to post a bond for Campbell to appeal the verdict.

In 1984, the Campbells settled with Slusher and Ospital’s estate, reaching an agreement whereby the Campbells would pursue a bad-faith claim against State Farm for the failure to pay the veredict. Slusher and Ospital’s attorneys agreed to represent the Campbell’s in the bad faith suit; additionally, the parties agreed not to seek to satisfy the original judgment against the Campbells. Slusher and Ospital’s estate would receive 90% of any verdict against State Farm.

Five years later, in 1989, the Utah Supreme Court denied Campbell’s appeal of the original verdict. State Farm paid the entire judgment, but the Campbells filed suit against state farm for bad faith, fraud, and intentional infliction of emotional distress.

State Farm lost the trial, and the jury awarded $145 million in punitive damages to the Campbells. The Utah Supreme Court upheld the verdict, and State Farm appealed to the U.S. Supreme Court, which overturned the verdict and remanded the case for reconsideration to the Utah Supreme Court. The Utah Supreme court then reinstated the original $145 million punitive verdict on remand, and State Farm wound up paying $145 million to resolve a case that could have been settled for $50,000.

There was no greed on the part of the Campbells, the Ospitals, or Robert Slusher. Curtis Campbell and his wife wanted State Farm to settle the case using the insurance policy they had paid for, and the Ospitals and Robert Slusher only wanted $25,000 apiece. The Campbell’s insurance policy had a limit of $50,000 which would have covered the $50,000 settlement, but State Farm had a different number in mind: zero.

That’s what State Farm wanted to pay: zero dollars for the death of Todd Ospital and the disability of Robert Slusher. State Farm wasn’t just willing to burn Todd Ospital’s family and Robert Slusher; they also tried to rip off their own policyholders, Curtis and Inez Campbell. By stepping over $50,000, State Farm suffered a $145 million loss due to its own greed and stubbornness. State Farm was willing to let its own policyholder lose all of his assets to satisfy the original $185,849 verdict, even though he had paid his insurance premiums.

Why They Do It

Today, big business and insurance companies alike insist that personal injury settlements are out of control, that the costs of lawsuits are driving businesses under and causing their employees to do their jobs. What these businesses and insurance companies have in common is simple: they want it all for nothing. They want your insurance premiums, but they don’t want to cover you when you have an accident.

They want your business, but they don’t want to treat you like a valued customer by making sure that their products are safe.

Why do they do it? Because they can, and because it works. If you’re the typical accident victim, you probably feel guilty for going to an attorney. You think lawsuits are for people who are trying to get rich by cashing in on their injuries. Nothing is farther from the truth.

Stella Liebeck would give her settlement back in a second if it meant that she never had to experience 190 degree coffee scalding her vagina. Todd Ospital’s family would trade their share of $145 million if it meant bringing Todd back. Robert Slusher would give up his share of the money if it meant living a normal life, rather than being permanently disabled.

These people suffered once from their injuries and the deaths of their loved one, and the companies that were at fault caused them to suffer again and again by lying and misrepresenting them as greedy, selfish people. Insurance companies and businesses don’t do this just to be cruel to the victims of their negligence and deliberate acts; they do it to intimidate you when you’re injured. They do it to deter you from seeking what you’re entitled to when you’re injured, or when your loved one dies as a result of their wrongdoing.

You’ve likely heard the words tort reform, but you never knew what it was. Tort reform is the principle that a company can offer $800 to a woman who has $10,500 in injuries, and refuse to take responsibility for the deliberate decisions they made that led to those injuries. Tort reform is the idea that an insurance company can take your money as a policyholder and hang you out to dry when you’re in an accident by leaving you on the hook for a $185,000 verdict.

When you’ve been injured or your family member has been killed through the negligence or wrongdoing of a company, and the insurance company refuses to deal with you fairly, they’re stepping over dollars to pick up dimes at your expense. You shouldn’t feel ashamed to stand up for yourself. You shouldn’t be conned into insulting the victims of McDonald’s and State Farm by defaming them as greedy. After all, you could be next.

Most of all, you should understand that by supporting tort reform, you’re just giving a bailout to businesses that routinely make deliberate decisions to choose dollars over safety and human life. You’re doing so at a risk to your own health and safety, because if insurance companies and big corporations can put a price on your life that will enable them to make a profit off of your injury or death, they will.

We know this, because they already have. That’s why personal injury lawyers will never run out of work: the greed of insurance companies and big businesses, and their disregard for the safety and well-being of others.

The Personal Injury Education Center of Utah wishes you a safe and happy life, free from injury or wrongful death, but if you ever do have to face such a horrific outcome, don’t be ashamed to stand up for yourself. It’s not greedy to expect the people responsible for your injury or the death of a loved one to pay for their actions. When they refuse to deal fairly with you, they put themselves at risk of a big court verdict. That’s not your fault; it’s theirs.

Dan Garner

Author Dan Garner

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