Insurers Striking Deals With Court Reporters;

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Preferential treatment for companies weakens justice system

San Francisco Chronicle

Insurance companies have spent millions to weaken safety laws, attack our civil jury system and persuade the public that lawsuits by injured consumers need to be scaled back. They have continually misled the public and policymakers with the lie that if insurers are able to cut back on their litigation costs, any resultant savings will be passed on to consumers in the form of lower insurance premiums.

Despite what insurers promise lawmakers and the public, however, state laws restricting the ability of consumers to seek redress in court have not lowered insurance rates.

Indeed, insurance companies have instead used spent millions in premium dollars to lobby against consumer protection laws so they can charge more and pay out less on legitimate claims.

Insurers’ $50 million campaign to overturn — through Propositions 30 and 31 — California laws that would have allowed consumers to sue an at-fault driver’s insurance company that denied, delayed or low-balled their claims is but the latest blatant example of spending premium dollars to mislead the public.

In yet another attempt to rig the justice system in their favor, insurance companies have implemented broad “litigation cost-control” pro grams that, in reality, compromise the ethical obligations of both the attorneys who defend the insured and the court reporters who take down the record in depositions while seriously disadvantaging consumer plaintiffs.

As a part of their “cost-control” efforts, insurers are striking
preferential deals with court reporting agencies that require the
“neutral” court reporter in depositions to give insurance counsel
special services not made available to the plaintiffs.

Such services include the expedited delivery of deposition transcripts, exclusive searchable witness databases, free rough draft transcripts, and other preferential litigation support services.

Just as plaintiffs would not tolerate insurers striking these kind of secret, one-sided deals with judges (although industry-employed
arbitrators are a step in that direction), they should likewise not
tolerate such preferential agreements with any officer of the court,
especially those that are responsible for creating the official record.

Essentially, these practices are heading in the direction of a privatized system of justice in which insurers and other corporate
interests are able to control the rules and the outcome of litigation.

At the same time insurance companies are lamenting their rising litigation costs, they are spending millions to lobby against laws that
would protect consumers by restricting these preferential deals with
court reporters:

Farmers Insurance Group opposed and helped to stall California
legislation (AB 1158) and a code of professional conduct proposed by
the Court Reporters Board of California that would have simply
required the disclosure to opposing counsel of the special deals
between court reporters and insurers.

— The Insurance Federation of Pennsylvania has opposed legislation
in that state backed by the Pennsylvania State Bar that would require the equal provision of deposition services, such as simultaneous
delivery of transcripts to all parties.

— The Coalition for Litigation Cost Containment — consisting of
American Insurance, Amica Mutual, Beacon Mutual and Metropolitan Life — has opposed a Rhode Island bill that prohibits court reporters from entering into long-term, exclusive deals with interested parties. The coalition’s position statement provided to legislators clearly misconstrued relevant case law and misrepresented the position of the National Court Reporters Association as favoring such deals, when in fact, that professional organization is working at the state and federal level to ban these insurer practices.

— American Family Mutual In surance Co. has led the Wisconsin Insurance Alliance to oppose a Wisconsin bill that aims to ban preferential deals between insurers or other interested parties and court reporters, erroneously claiming that the bill “is anti-consumer and will raise the cost of litigation to all parties” when in fact, any cost savings of insurers only serve to boost their profits.

Clearly, these purely profit-driven abuses of our civil justice system must be stopped if we are to preserve any semblance of fairness in our courts.

In this regard, California legislators should side with consumers and the public interest in favor of strong measures that ban insurers’
preferential deals with court reporters.

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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