An attorney representing a Kentucky woman suing Allstate Insurance Co. in a $1.4 billion trial accused the insurance giant of using delay tactics and schemes to prod injury victims into accepting lower offers for pain and suffering.
On the opening day of the trial Monday, attorney J. Dale Golden accused Allstate of rigging a computer program to produce artificially low values for injury claims, sending fraudulent information to state regulators to avoid scrutiny and accepting lawsuits over its claims handling as a cost of business.
Golden represents Geneva Hager of Richmond, who is suing Allstate in Fayette County Circuit Court for bad faith over the way it handled an insurance claim from a 1997 wreck.
Golden showed jurors 23 slides of what are known as the McKinsey documents, created by an international consulting firm hired to redesign Allstate’s claims-handling processes in the 1990s.
One document, playing off the company’s slogan, showed how Allstate wanted to redistribute settlement times. The 90 percent who settled within 250 days – and accepted paltry offers, Golden says – were in “good hands.” The 10 percent who held out got “boxing gloves.”
Attorneys for Allstate said its claims handling was designed when bodily-injury payouts were increasing faster than medical inflation, though crash rates were not increasing.
Working with McKinsey & Co., Allstate found that soft-tissue injury claims arising from minor impact accidents were rife with fraud, exaggerated injuries and “padded” medical treatment, attorney Floyd Bienstock said.
He said Golden is cherry-picking and distorting the McKinsey documents, which are actually 12,500 PowerPoint slides. Contrary to Golden’s claims, the McKinsey documents show that Allstate tried to settle cases more quickly, he said.
Bienstock said the claims targeted for “boxing gloves” are the 10 percent thought to be fraudulent.
Golden showed jurors a slide stating that Allstate could make $475 million from the new claims-handling process, implemented in 1995. That estimate was later increased to $700 million, and another document forecast an increase in Allstate’s stock price.
Golden said Allstate’s hardball tactics are so profitable that only a massive jury verdict against it would deter it.
Information from: Lexington Herald-Leader,
http://www.kentucky.com
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