“Frivolous lawsuit” – a buzzword that insurance companies use to vilify and misrepresent the work personal injury attorneys do for their clients. The insurance industry has funded entire think tanks dedicated to creating studies to make the public believe “frivolous lawsuits” are out of hand and terribly common. The lobbying of insurance reformists and pro-tort reform politicians has led to myths about certain cases being spread around liberally.

The oft-cited McDonald’s Hot Coffee case is used as the rallying call for pro-tort reformists, making it seem as if some careless person merely spilled hot coffee on their lap and was looking for a quick, easy payout. In reality, the victim Stella Liebeck was a 79-year-old woman who was inflicted with 3^rd degree burns requiring skin grafting to her groin area. If you are currently eating or have small children in the room, refrain from Google image searching her injuries. In the end, Liebeck was awarded with the equivalent of 2 days-worth of coffee sales ($2.7 million) despite Liebeck initially only wanting $20,000 to cover her actual and anticipated medical costs. This decision was appealed by McDonald’s and Liebeck eventually settled for an undisclosed amount less than $600,000.

So why is it that the insurance industry and tort reform lobbyists seem so insistent on perpetuating these frivolous lawsuit myths? The obvious and correct answer is it is in their (and truly only their) financial best interest to pass tort reform. The tort reform lobby wants the American public to believe tort reform will reduce medical costs and improve the supply of doctors.

The fact is it doesn’t.

A study published in 2012 by a bipartisan research group looked at medical costs in Texas after Texas passed a tort reform amendment in 2003. This group, composed of two Republicans, a Democrat, and a foreign national, concluded that medical costs in Texas in fact rose 1 to 2% faster than the rest of the country. You can read the full study here. This $750,000 cap on pain and suffering damages also made it difficult to justify the litigation costs of medical malpractice suits, leaving many victims of malpractice unable to find an attorney.

The pro-reform lobby also claims that tort reform will lead to an increase in the supply of doctors. The bipartisan group found that, considering factors such as doctors that leave the state or retire and physicians that only deal with research or administration, the number of direct care doctors actually grew more slowly following the passage of the tort reform amendment.

All of this research points to my earlier conclusion, insurance companies don’t care about the well-being of their insureds when they are promoting tort reform laws. They are only looking after the well-being of their profit margins. Using rising medical costs as a scapegoat, the insurance industry wants to make getting fair settlements for all insurance cases that much more difficult – ultimately to the detriment of the American people.  

If you need experienced legal representation that will fight for your right to fair compensation, contact me for a free consultation. 

Game tree for a trial, follow instructions below to understand. Right click and press "open image in new tab" to see the full image and details.

Recently, my son Hunter and I were discussing the process of predicting case results using a set of variables and probability analysis. Hunter is currently working on marketing and data analysis for me this summer. When a legal colleague of mine, Travis Jameson, wrote on the subject of probability analysis in injury cases I showed the post to Hunter because I figured he would be interested in the content as well. Hunter is a rising Junior at Washington University in St. Louis studying Business Economics (“Economics & Strategy” is the formal title) and Marketing in the Olin Business school. What follows is Hunter’s analysis and response to Mr. Jameson’s probability analysis:

Mr. Jameson is addressing the process of probability analysis in injury cases and its usefulness in choosing the right avenue to pursue for the best results for his clients in his article. In other words, Jameson proposed a model for determining the expected value of a case if it goes to trial (not a universal model, merely a methodology to analyze case values). This is an interesting approach but the base analysis oversimplifies the way these cases work from a game theoretic perspective.

Jameson’s base model assumes the insurance company is an uncomplicated player, which is to say that it does not make any relevant decisions in the trial and merely takes what the odds give them. The reality of the analysis is more complicated than this. Let’s take a very basic model of mixed strategy, sequential decision game theory and apply it to a trial setting.

Please note that any facts and figures are purely made up (the actual numbers are irrelevant but I tried to stay within the bounds of feasibility). The purpose of this example is to demonstrate how deep the rabbit hole goes once we step into the realm of probability analysis in trials. Additionally, we assume that the insurance company knows whether a case will be good or bad at trial due to their vast amount of data available to make that claim with a high degree of accuracy.

Again, to see the full game tree, right click on the image above and press "open image in new tab", the diagram makes the steps more clear.

To properly create a simple model for a case you have to consider a few assumptions and rules for the “game” as follows:

1. The plaintiff attorney is depicted as the letter A, Insurance Company as letter I and Nature (an independent actor representing the probability of an event) is depicted as N.
2. The plaintiff attorney moves first in the game and has the option to accept an offer of $50k or go to trial.
3. The game is a zero-sum game, in other words any gain for the plaintiff attorney is exactly equal to the loss of the insurance company.
4. Next “Nature”, which is the probability of an event occurring in game theory, takes its move. The nature node determines whether evidence is bad or good. For simplicity we’ll assign the probability of good or bad to both be .5 (p = .5, 1 – p = .5).
5. All parties involved in the game are aware of the probabilities of any Nature node branch.
6. Both you and the insurance company understand if you have bad or good evidence after the first nature node has moved (discovery and experience owing to this understanding).
7. Next, branching off of the good or bad results the insurance company can make its move. Here it has the option to offer a higher settlement ($60k) or pursue a trial.
8. The plaintiff attorney can decide to accept the higher settlement or reject the higher settlement in favor of a trial.
9. Nature again has a move here to determine the probability of settlement. If nature has determined you have good evidence, your probability (q) of acquiring a good settlement is .8 (q = .8 or 80% and 1 – q = .2 or 20%).
10. If nature has determined you have bad evidence, these probabilities switch giving a q = .2 for a good settlement and 1 – q = .8 for a bad settlement.
11. A good trial result gives a payoff of $100k and a bad trial result gives a payoff of $25k.
12. Payoffs are listed (Plaintiff, Insurance Company)
13. Now we can go about solving the game. The expected result of the Good evidence branch is a trial with Expected Payoffs (85, -85).
14. The expected result of the Bad evidence branch is (40, -40).
15. The optimum choice routes for any party that can make decisions (A and I) are depicted as green arrows.
16. The overall Nash Equilibrium (the most rational result) of the game is for the plaintiff attorney to pursue trial for an expected payoff set of (62.5, -62.5).

This model can adapt based off of other factors. For example, a plaintiff and their attorney may incur costs for pursuing trial that reduce their payoffs in that event which makes settling more favorable. Alternatively, the plaintiff and their attorney may receive a premium utility from winning the case. In other words a client that goes to trial may enjoy the possibility of winning so much that they value winning as an additional pay off to the value of any case result.

It should be noted that this game tree is the same as what game theorists would describe formally as an adverse selection problem and colloquially as the lemon problem (after lemon cars). Adverse selection games occur when the less informed party (the plaintiff attorney) moves first. We model the plaintiff attorney as less informed because the insurance company has access to enough data to make a reliable prediction on case quality.

My point with this analysis isn’t to call out Mr. Jameson’s thought process, but I believe it is very important (if we decide to go this route for trial analysis) to understand how the full game plays out in reality. This sort of subject is terribly complicated and even with my more complicated model it doesn’t adequately explain every variable that goes into a case. As such without a great deal of resources it is difficult to determine where you stand in a case before going to trial with a high degree of certainty. Statisticians usually use a significance level of alpha = .05 as a criterion, which means they are 95% certain of a factor or model’s significance, to determine whether or not a model is useful. I would be hard pressed to say any model we could produce with in-firm data could provide that level of accuracy, hence the value of acquiring experience trying cases.

This is why I like to think of law as both an art and a science. While models and data are all very helpful, there’s always the unexplained portion of the equation that, in law, can only be estimated through experience and subjective analysis. 

App-based car ordering services, such as Uber and Lyft, were recently given the go ahead by Seattle mayor Ed Murray allowing them to go beyond the previous 150 active driver limit that was imposed in March. As a whole we are in favor of this development. Easier, less expensive access to transportation will hopefully reduce drunk driving and lead to safer roads for Seattleites. However; we feel it is our duty to educate people on the consequences of being involved in an accident with an Uber or Lyft driver (or any other app-based transportation service).

These services contend that their service merely connects drivers with passengers and as such does not constitute employment. Instead these drivers are independent contractors. The TNCs (Transportation Network Companies) would therefore claim they are not liable for damages in the event of the accident. In Seattle, one of the requirements for operating as a driver with a TNC is to carry insurance. The press release for the deal did not specify what the insurance minimum to qualify would be, but we can only hope that it would be sufficient to cover the majority of accidents that could occur. Lyft claims it gives its drivers up to $1 million in liability insurance in addition to the driver’s own insurance. Uber grants $1 million of 3^rd party liability and $1 million of underinsured or uninsured motorist coverage only DURING trips. When not actively transporting passengers, active Uber drivers have up to $100,000 injury insurance and $25,000 property damage insurance provided by the company.

Even then, as with the case of the 6 year old girl who was killed by an Uber-approved driver, it is possible these insurance policies would not adequately cover the costs of a wreck. Then the question on whether or not a TNC would be liable becomes prevalent.

The IRS uses a three category test to determine if someone is an independent contractor, looking at the level of behavioral control, financial control, and the relationship of the parties.

The first quality, behavioral control, is at its core the level of control the company has over the independent contractor. For a TNC, this would be its ability to connect drivers with passengers. The TNC in this case does not directly control the actions of the driver, but they are responsible for the actual initiation of the transaction so a reasonable level of control might be argued. The second quality, financial control, means that the contractor has to have the freedom to work for other companies and maintains his or her own work equipment, among other qualities. For a TNC, their drivers are clearly responsible for the purchase and care of their vehicles (although we have no idea if Lyft provides their distinctive pink mustache for free to drivers). Looking at the relationship from this lens makes it more difficult to place liability on the TNC. The final factor is the absence or presence of a contract. Having a written contract is clear evidence that an individual driving for a TNC is an independent contractor, while the absence of a contract makes this relationship less clear.

To summarize: for the most part the insurance policies provided by TNCs like Lyft and Uber should cover less serious injuries. However; if injuries are more substantial there is a case to be made that the TNCs are liable for their driver’s actions, allowing the injured party’s attorney to seek additional damages in order to assure their client gets the help they need.

If you or someone you know has been injured in an accident involving taxis or a TNC in the greater Seattle area, contact Scott McDonald and Associates for aggressive, experienced legal assistance. 

The dead passenger, Mythili Gopalan, was not wearing a seat belt at the time of the accident. As we’ve mentioned in a past news post, seat belts are perhaps one of the most important safety devices an individual can wear to prevent injury while traveling in a car.

It is clear in this accident that Mr. Subraminam was at fault for the accident. This means that in order to win damages for their injuries, the passengers of the vehicle would sue Mr. Subraminam for a payout from his insurance. In fact, we have worked on cases before where a wife sued her husband for damages in order to maximize the recovery for that case. The spouse would have to be sued in their own name but their insurance company is responsible for paying the compensation. There is an advantage to this because the at-fault spouse will presumably support the injured spouse’s claim and the jury will likely conclude that any verdict would be paid by insurance.

The fact that Ms. Gopalan was not wearing her seat belt, under Washington state case law is not relevant for determining whether she has comparative fault (see Amend vs. Bell). However, if the cause of death makes it apparent that Ms. Gopalan was not wearing her seat belt, the jury may determine this fact. While legally this revelation should not affect damages awarded, this information could reduce a jury’s goodwill towards the injured party, thus lowering damages in a kind of jury nullification.

If you or a loved one has been injured in a crash like this we encourage you to contact us for a free consultation to discuss your case. A helping hand is just a phone call away. 

In the bicycle versus motor vehicle collisions there are many small issues the insurance company can assert in an attempt to deny an injured bicyclist full payment for the harm caused. In one case I litigated the driver’s insurance company asserted that the bicyclist, who had right of way, should have seen that the offending driver wasn’t looking before he proceeded. This defense was allowed to be asserted. This unfairly reduced my client’s damages. If the collision causes the death of the bicyclist then this presumption would allow liability to be established where it may otherwise be impossible (given the bicyclist would be unable to testify).

There are also many drivers, some of whom end up on juries, that don’t like to share the road with bicyclists. If jurors with this prejudice have the opportunity to use spurious claims of comparative fault they will reduce the damages unfairly.

Finally, the motorist will be able to overcome the presumption of liability by presenting evidence that the bicyclist caused the collision. This proposed law would work as a proof shifting tool so that the process is more just.   While I have had great success in the past with bicycle accidents, this law would ultimately serve to better protect Washington cyclists in collisions with motorists. 

Drunk drivers often cause more severe wrecks. In this case the driver of the Ford Ranger did nothing wrong to cause an accident. Our client in the Ford Ranger had to be pried from the wreckage of his vehicle with the Jaws of Life following the impact. He was lucky not to be killed. Our client suffered from low back pain and a modest amount of medical bills. More concerning than his physical injuries were his emotional injuries: our client suffered from post-traumatic stress disorder (PTSD) as a result of being hit by the drunk driver. He suffered from recurring nightmares of being hit by drunk drivers and required psychological counseling to work through these issues. Psychological issues, such as PTSD, are not always readily apparent to sufferers. Only through the careful listening of his attorney did our client realize that he could seek care for his PTSD from a psychology professional.

In an accident involving a drunk driver, it is often the case that the intoxicated driver has a low limit of liability insurance, or even no coverage. Drunk drivers typically cause more harm than a sober driver and they cause a disproportionately large number of accidents each year. For severe injuries that result in hospitalization for several days in a trauma center, such as Harborview in Seattle, the medical bills will be in the tens of thousands of dollars. Thus, it is recommended that responsible drivers have a high limit of underinsured motorist coverage. The driver of the Ford Ranger was able to obtain a $150,000 recovery through Scott McDonald and Associates because he had the foresight to carry underinsured motorist coverage.