Consumer Group Calls On Legislators To Enact Real Reforms To Preserve The Impartiality Of the Judicial Process

In a letter to California legislators today, the Foundation for Taxpayer and Consumer Rights (The Foundation) exposed several serious loopholes in a bill purportedly aimed at curbing the abuses posed by insurers’ special deals with court reporting entities that give them strategic advantages over the other parties in litigation:

• SB 877 does not require that insurers’ preferential deals with court reporters be disclosed to plaintiffs.
  

• SB 877 contains no penalties for court reporting entities or insurers who fail to disclose special deals.
  

• SB 877 places the burden of disclosure on the attorney who is the least likely to know of all the special services made available through a deal brokered by insurers with a court reporting entity far in advance of a particular lawsuit.

“SB 877 is nothing more than ‘window-dressing’ that will allow insurers to continue to reap the benefits of special deals with court reporters while keeping plaintiffs in the dark,” states Foundation attorney, Pamela Pressley.

Insurers, including Farmers Insurance, and the owners of court reporting entities who enter into long-term, preferential contracts with insurers and other corporate litigants have given their tacit approval of SB 877 because of its weak disclosure requirements. At the same time, they mounted a major lobbying effort to kill a stronger reform measure, AB 1158, sponsored by the Court Reporters Board of California (CRBC) and supported by the Foundation and a majority of licensed court reporters in the state.

According to CRBC Executive Officer, Rick Black, “SB 877 does not further the Board’s goals of discouraging preferential arrangements with court reporters.”

The Foundation has compiled a first-of-its-kind white paper documenting the most egregious abuses posed by preferential insurer deals, including:

• compiling databases of all deposition transcripts from all cases in which insurance company is an interested party, thereby giving them an advantage in future cases

As part of many contractual arrangements with insurance companies, court reporters are required to provide a computer diskette version of the deposition to the insurance company and to the contracted court reporting agency. The agency then databases all depositions for that insurance company that can then be used in future legal actions.

• completing “Witness Information Sheets” that collect otherwise confidential information from witnesses, such as social security numbers, for quick reference in later cases

Insurance companies are actively using court reporters to invade the privacy of consumers by requiring the collection of personal, identifying information either through the completion of a “witness information sheet” that is turned in with the completed transcript or the entering of this private information directly into the record. Once in the hands of the insurer, there is no control over who may access this personal information that may be shared with the insurers’ affiliates or subsidiaries without the permission of the individual.

• remaining after other parties have left a deposition to take dictation from the insurance company’s counsel as to his interpretation of deposition

Many court reporters have complained that they have been asked by insurance company counsel to stay after a deposition to record a summary of what happened in the deposition as dictated by the insurance counsel– a prime example of how court reporters are being used by insurance companies as part of their litigation support team to give them an advantage over opposing parties. In a complaint to the State Bar of California, one court reporter stated that she was asked to not report any further depositions by the insurer’s counsel when she tried to explain that she believed it was unethical for her to be taking dictation from the attorney of his account of the deposition.

• expedited delivery of transcripts

Insurance companies and other corporate defendants or their intermediaries are also attempting to control when the other parties to a case will receive copies of deposition transcripts by directing the court reporter to deliver the original and all copies of the transcript directly to the insurance company or their intermediary.

SB 877 will be heard in the Assembly Judiciary Committee as soon as next week.

###