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The National Law Journal asked Richard Campbell, chair of the ABA’s 25,000-member Torts and Insurance Section and a partner at Boston’s Campbell Campbell Edwards & Conroy, about trends in the insurance industries’ legal world. The interview was conducted via e-mail. NLJ: What do you foresee as a trend in insurance litigation in 2002? Campbell: If the question is directed at personal injury and property damage cases where the costs of defense and indemnity payments are underwritten by property and casualty insurance carriers, then I believe that the Sept. 11 attack on the country and the ensuing catastrophes that befell so many thousands of individuals and businesses will have a dramatic effect on claiming behavior, jury response to calamities and damage awards. And by claiming behavior, I mean both the likelihood of making a claim or bringing a suit and the amount of money offered in settlement. NLJ: What will be the effect on jurors? Campbell: It seems inevitable to me that jurors will take a much more conservative view of personal injury and property damage claims now in the face of such evident hardships born by so many people. Every member of the jury pool will come to jury selection with vivid images of the attack and the suffering of innocent victims and their families. … In making normative judgments, jurors will have difficulty concluding that plaintiffs have suffered to a compensable degree and that defendants’ alleged “wrongdoing” is worthy of a judgment for the plaintiffs, particularly in run-of-the-mill claims. NLJ: What will happen to recoveries? Campbell: I believe that judgments will be lower in amount than they have been in recent years. In anticipation of these changes, lawyers may choose to delay filing claims hoping to distance their clients’ causes from that horrible event. NLJ: How about the types of lawsuits? Campbell: If the question is directed at insurance coverage litigation, I do not see any change, as lawsuits of this type are a variant of contract disputes and depend heavily on the contract language evidenced by the policy. If Congress changes ERISA (Employee Retirement Income Security Act), for example, by enacting a patients’ bill of rights, we may see a flurry of claims against HMOs. NLJ: What about class actions against insurance companies? Campbell: Class actions are of great interest to the insurance industry, particularly following the enormous verdict against State Farm arising out of its use of non-OEM (original equipment manufacturers) parts. It seems unlikely, though, that the State Farm case will generate a rush of additional class action lawsuits. Carriers are heavily regulated at the state level and bad corporate behavior is more difficult to pursue when regulators watch your every move. But, equally important, the industry had enough experience with extracontractual (or bad faith) litigation over the past decade to pay close attention to business practices in an effort to avoid disputes of this type. NLJ: Has the focus of consumer privacy changed post-Sept. 11? Campbell: Consumer privacy is a huge problem for the insurance industry in light of Gramm-Leach-Bliley — a statute that authorized bank and insurance mergers and included a mandate for privacy without providing details. Complying with the law is presently impossible, as the laws are quite vague on the topic. NLJ: So what can insurance companies do? Campbell: Perhaps the best solution for the carriers interested in protecting insureds’ privacy rights is the development, implementation and strict oversight of privacy policies that are comprehensive and consumer-biased. The carriers might follow the example set by federal criminal law that calls upon corporations to establish corporate compliance programs in advance of wrongdoing in order to achieve any downward departures from the sentencing guidelines in the unfortunate event the company is indicted.

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