Most attorneys earn a living the honorable way – by providing wise legal advice to clients and by advancing their client’s interests in court. Even when proper procedures are followed by the plaintiff, defendant and judge in tort actions, outcomes are not always fair and “fair” is what the public wants from its legal system. Unfair outcomes are especially upsetting when attorneys game the system to enrich themselves at the expense of consumers who have no say in the process.
At a federal level, regulatory agencies (such as the EPA) and attorneys representing special interest groups have perpetrated so-called “Sue and Settle“ scams. The special interest attorneys sue the regulatory agency for not adopting rules both parties would like to have in place – were it not for limitations in the agency’s authority or opposition from the Congress or administration. The regulatory agency then agrees to settle on a consent decree that a judge approves – completing the scam. The consent decree often forces the federal agency to pay the litigation costs claimed by the special interest group. The public, Congress, and administration are given no say in fee payments or the substance of the regulations. A bill to curb these fraudulent sue and settle lawsuits did not become law. The evil in this practice is not hard to spot.
In Florida, personal injury protection insurance was too often the target of fraudulent claims. Criminals would fill a car with a team of people ready to participate in an intentional accident. Using their personal injury protection insurance, the team of “victims” would seek medical care from colluding providers of massage, chiropractic, acupuncture and other expensive, often unnecessary treatments. Attorneys coached the “victims” on where to get treatment and how much cost to incur. The total spending associated with the treatments was apportioned among the scammers. Personal injury treatment costs billed to the insurance company would increase premiums for all Floridians in the following year.
After many years of inaction, the Florida legislature deserves acknowledgement for adopting some fraud reforms in 2013 that resulted in an almost 10% reduction in personal injury premiums. Despite personal injury fraud reforms, some Florida attorneys reportedly still pursue treatment reimbursement on behalf of colluding, fraudulent treatment businesses.
In the recent decade, sinkholes have occurred in Florida and that prompted the trial attorneys to find consumers with cracks in their sidewalk to file claims – sometimes in return for a payout, free golf cart or some other gift. Legislation has curbed this abuse.
Despite some positive steps, Florida is still in serious need of reforms. In recent years, some trial attorneys have perfected the next scam, by using “assignment of benefits” – a provisions that allows consumers to sign-over their insurance claim to contractors. The policy was intended to speed storm damage repairs to homes and cut tape, but some unscrupulous lawyers have found ways to bilk insurances with fictitious and overpriced claims, often without the knowledge of the homeowner. This shady practice has significantly pushed up insurance rates in Florida, while giving generous payouts to some attorneys and contractors. As a result, assignment of benefits claims has skyrocketed, making insurance-paying consumers the big losses in the state.
For this and other abuses, an annual report from the American Tort Reform Foundation now ranks Florida as the worst judicial hellhole. But, the report demonstrates a widespread problem among many states as well.
It is time for the all state legislators to address these problems, stop the sue and settle abuse, and reform assignment of benefits with the focus on protecting consumers. Failure to make these reforms would be a major legislative failure, but one that should point blame squarely in the direction of State House and Senate the members — many of whom are attorneys themselves. Consumers need to know where their state legislators stand on this issue – protecting consumers or protecting trial attorneys.