Insurers Blatantly Ignore Entreaties to Abide by Ethical Rules

In letters to the National Association of Attorneys General and the National Governors Association, a broad coalition of national and state consumer and women’s rights organizations, led by the Foundation for Taxpayer and Consumer Rights (FTCR), called for action to address a growing threat to the impartiality of the judicial process that places consumers seeking redress in the courts at a serious disadvantage.

“In an effort to rig the justice system in their favor,” according to consumer advocates signing on to today’s letter with FTCR, “insurance companies and other large corporate defendants are forcing court reporters who take down testimony in depositions to adhere to inequitable contractual agreements.” These agreements require the court reporters to give special services on preferential terms that are not equally made available to other parties in a lawsuit.

“Judges, plaintiffs and defense attorneys, and consumer groups have all condemned this commercialization of justice,” stated Pamela Pressley, FTCR staff attorney, “but insurers remain determined to keep the scales of justice tipped in their favor by ignoring existing conflict of interest rules and opposing even the most moderate reform measures.”

Some blatant examples of preferential treatment required of court reporters through insurers’ special deals, as documented in an FTCR-prepared white paper, include:

• compiling exclusive witness databases of all deposition transcripts from all cases in which the insurance company is an interested party, thereby giving them the upper hand in future cases.
  

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

• providing the insurer’s counsel expedited delivery of a deposition transcript at a reduced cost prior to the other parties receiving a copy.
  

• providing uncertified, rough-draft transcripts to the insurer or their counsel.
  

• producing summaries or abstractions of depositions for the insurer or corporate defendant that are not made available to other parties in the case.
  

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

Despite the passage of laws in a growing number of states to address these abuses, insurance companies continue to seek out preferential deals with court reporting firms on a nationwide basis, even in the face of demands from state and national ethics boards to refrain from such practices. The letters to the Attorneys General and Governors urge them to end these abuses by supporting pending state measures and enforcing existing laws.

“Because these agreements cut across state lines, it will require a coordinated effort by state leaders to protect consumers from insurers’ practices that seek to deny equal justice in state courts,” states Pressley.

The American Judges Association has resolved to support legislative and judicial efforts to ban preferential agreements between court reporters and interested parties in litigation, recognizing that: “court reporters are officers of the court whose impartiality, as with judges, must remain utterly beyond question in order to ensure the enduring confidence and faith from which our judicial system derives its legitimacy.”

So far, sixteen states have passed measures to ban or strictly limit these biased contracts and at least twenty other states have similar proposals pending.

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