Wednesday, February 27, 2013

Allocation of Fault a/k/a The Discount Coupon Defense

    Clients naturally ask how a party that clearly has acted wrongfully can not be responsible for paying 100% of the losses resulting from wrongful conduct.  For example, how can the driver making the bad left turn not be responsible for the injuries he has caused, how can the bar that wrongfully sold liquor to a minor not be responsible for the resulting drunk driving accident, and how can the foster home not be responsible for its employee's sexual assault on a resident.  The answer is the Discount Coupon defense in which the responsible party argues that, because others are at fault, its legal responsibility is limited to its share of the fault.

   Because of laws passed in 1997 questionably called "Tort Reform,"  parties legal responsibility is limited only to their share of fault.  What this means is that parties that have acted wrongfully look to blame others, including the accident victims for accidents.  For example, the driver making the bad left turn will say that the accident victim driving the other vehicle should have seen the bad left turn and avoided the accident, the bar will say that the minor is more responsible for the accident, and the foster home will say that its employee is responsible for the assault. 

   How does this work?  For cases that go to trial, the Court requires juries to allocate percentages of responsibility for accidents.  If the jury finds that accident victim to be 50% responsible for the accident, the bad left driver only has to pay 50% of the resulting losses.  If jury finds the minor is 90% responsible for driving drunk, the bar that sold the liquor only pays 10% of the resulting losses.  Similarly, if the jury finds the foster home employee is 90% responsible for the sexual assault, the foster home only pays 10% of the resulting loss.   In other words, the percentage is equivalent to a Discount Coupon for wrongful conduct. 

   I make no attempt to justify this system as being either fair or just, particularly with respect to situations like the bar or the foster home which the law requires to protect the innocent public from their wrongful actions.  However,  the Legislature in its infinite wisdom says this is how justice in Alaska works.    Accident victims have to play their hand smartly.  See  

Wednesday, February 20, 2013

How Lawyers Help Clients Deal With Insurers

     A Client came to me for help help on a problem.

     Through his work, he had purchased a small accident policy that was supposed to pay $10,000 in medical expenses and a small disability benefit for 6 month.  He also insured his long-haul Kenworth tractor with the same company.  Following a one vehicle accident that the Client believed was caused by faulty repairs leaking carbon monoxide into the cab, the Insurer denied all benefits, saying that the accident must have been caused by some unknown illness or disease.  The same Insurer was unresponsive on the Client's claim for the total loss of his tractor leaving a voice mail with no further explanation that all proceeds would be paid to the lender.

       I can remember the meeting where the Client shared his frustrations in how he had purchased the insurance to protect himself in case of an accident and how it had turned out to be worthless.  Convinced that his problems were due to misunderstandings and a failure of communication, my recommendation was that he file a Complaint with the Alaska Division of Insurance.  The Client's even more frustrated response was to say that he had!

        With the Client having given the Insurer every opportunity to perform as it had promised, a lawsuit was filed for insurance bad faith.  After a year, the Insurer finally paid the promised benefits in full, plus interest, plus additional damages.

       The playing field between an insurer and its insured is not level.  You have to play your hand smartly.  See