Vested Interest - Trends - September 2000 Issue

STATE FARM INSURANCE EARNINGS DROP BY 60 PERCENT

State Farm Insurance Companies announced Feb. 28 its net income had dropped by 60 percent last year, from $1.034 billion in 1999 to $408.1 million in 2000. The company said the drop was caused by a combination of increased claims and reduced rates. The company reported a pre-tax operating loss because of underwriting losses of $3.3 billion compared to $2.1 billion in 1999. Incurred claims and loss expenses rose 8 percent to $23.2 billion from $21.4 billion. The company also paid a record $1 billion dividend to policyholders last year. (Liability & Insurance Week – March 5, 2001)

FEDERAL APPEALS COURTS HANDLE RECORD NUMBER OF CASES IN 2000

The nation’s 12 federal Appellate court circuits handled 54,697 new cases in fiscal 2000 and acted on a total of 56,512 legal matters, bringing the total increase in caseload from 1996 to 5 percent. Despite processing this record caseload, the courts still had 40,410 cases pending at the close of fiscal 2000, the Administrative Office of the U.S. Courts has reported. Although this number of pending cases was less than in 1999, it was 4 percent above the 1996 level of 38,774 cases. (Liability & Insurance Week – March 19, 2001)

NUMBER OF TORT CASES IN DECLINE

The Los Angeles Times reported in a Feb. 1, 2001 article, despite myths pushed by tort ‘reformers’ there has not been a recent “explosion” of litigation in this country. Instead, the article entitled “We Aren’t Seeing You in Court” reports since 1990 the nation has seen a decrease in the number of tort cases brought to court, particularly in California. In fact, the article points out, “A massive study of the behavior of injured Americans in the late 1980s by the Rand Corp.’s Institute for Civil Justice found that only 2 percent of injured Americans sought compensation by filing lawsuits.” Plaintiffs’ lawyers offer one reason for the decline in tort filings, according to the article. They propose fewer people are being injured due in part to increased product safety. Another proposed reason for the decline in tort cases is there has, in recent years, been stigma placed on consumers who sue, the article notes. (atla.org – posted March 9, 2001)

HMO TO PAY $7 MILLION

A family in Wauconda will receive $7 million from defendant Rush Prudential HMO following the death of plaintiffs’ wife. A high-low settlement agreement was reached after plaintiffs’ argued that the defendants failed to adequately diagnose and treat his wife’s abnormal bleeding after the birth of her daughter. (Chicago Daily Law Bulletin – April 5, 2001)

TOBACCO INDUSTRY OWES FLIGHT ATTENDANT NOTHING

JUDGE'S DEADLOCK INSTRUCTIONS RESULT IN NEW MEDICAL MALPRACTICE TRIAL

An Illinois State appeals court panel overturned a $1 million verdict in a medical malpractice case, saying “the integrity of the verdict is necessarily impugned” because of the trial judge’s improper use of supplemental deadlock jury instructions. The panel concluded “the judge’s emphasis on the time and expense invested by the parties and the judiciary laid undue stress on economic factors and the importance of returning a verdict.” (Chicago Daily Law Bulletin – April 6, 2001)