After I-35W bridge collapse, lawyers promptly pounced

The last victim of the Interstate 35W bridge collapse has been recovered from the water. The long, complex search for the disaster's cause is ramping up in earnest. It's about the time we'd expect the lawyers to descend. But the pinstripes are already out of the gate, setting new records for jumping the gun in a disaster.

Just days after the collapse, while recovery crews were still battling treacherous waters, Schwebel, Goetz & Sieben -- one of the state's highest profile personal injury firms -- petitioned for access to the site for three attorneys and two expert witnesses.

An immediate inspection of the bridge "will be essential to vigorously ... prosecute wrongful death and personal injury claims" for five unnamed clients, the lawyers insisted.

Such an inspection, of course, would also create big-time publicity and a chance to attract more clients.

U.S. District Judge Patrick Schiltz rejected the petition. Judges have to be civil, of course, but in reading between the lines I detected a judge who was steamed.

In an order heavy with understatement, the judge made clear that the Schwebel firm's appearance in court was highly premature. The firm, he noted, "candidly admitted" that it does not yet know "whom it should sue or what allegations it should make."

The court found no precedent for ordering the government to let private attorneys inspect a mass disaster site while recovery efforts were underway.

The judge emphasized the government's "urgent interest" in recovering victims, clearing unstable and dangerous wreckage, reopening the Mississippi River to commerce and beginning to rebuild the bridge as soon as possible. These challenges are "daunting enough," he said, "without this Court turning loose dozens of lawyers, expert witnesses, and investigators on the site."

Trial Lawyer Report on Hurricane Katrina Called Self-Serving Fiction by Insurance Groups

A recently released report by a plaintiffs’ attorneys group ignores the facts about insurance companies’ response to Hurricane Katrina in a deliberate effort to pad the pockets of the lawsuit industry by drumming up litigation and high jury verdicts, according to a consortium of insurance groups.

“The trial bar, hiding behind the name of the American Association for Justice, is using the second anniversary of Hurricane Katrina to manipulate American consumers by spinning a fictional tale that comes straight from the pages of a John Grisham novel,” said Carl Parks, senior vice president for Government Affairs, at the National Association of Mutual Insurance Companies (NAMIC). “The facts tell a different story, and facts are stubborn things.”

Hurricane Katrina generated the largest loss in the history of the insurance industry—1.7 million claims resulting in $40.6 billion in insured damage, said Dr. Robert Hartwig, president of the Insurance Information Institute (I.I.I.). In addition, flooding from the storm surge and the ensuing failure of the aging New Orleans levee system cost the National Flood Insurance Program more than $16 billion.

Dr. Hartwig said Katrina’s 2005 companions, hurricanes Rita and Wilma produced another 1.4 million claims and $15.3 billion in damage. And the unprecedented four-storm season of 2004 resulted in an additional 2.5 million claims and $25 billion in damage.

Dr. Hartwig reported that two years after Katrina made landfall, approximately 99 percent of homeowners insurance claims, including those in hard-hit Louisiana and Mississippi, have been settled. In Louisiana, approximately 688,000 homeowners claims, totaling $10.8 billion, have been settled. In Mississippi, more than 350,000 homeowners claims, totaling $5.4 billion, have been settled. “Effectively all of the nearly 350,000 claims from damaged vehicles, totaling $2.2 billion, have been settled,” he said.

In Louisiana, only 537 out of more than 1,000 suits filed in U.S. District Court remain on the docket. The state-sponsored mediation program in Mississippi has settled 3,034 of 3,687 cases in that state.

Trial bar led challenges to insurance policy contract language, such as the exclusion of flood coverage in homeowners policies, have been rebuffed by federal courts in Louisiana and Mississippi.

“The trial bar’s defeats in the courts are behind its concerted effort to get the media to focus on the small number of disputed claims, creating the false impression that insurers turned their backs on large numbers of Gulf Coast consumers,” said Joseph Annotti, senior vice president – Public Affairs, of the Property Casualty Insurers Association of America (PCI).

Annotti noted that while the most significant lawsuits failed in the courts, the litigation succeeded in creating uncertainty about the validity of insurance contracts. This level of uncertainty helped to further destabilize insurance markets in the region, leading, in part, to higher rates and the unwillingness of some insurers to sell coverage in coastal areas.

Industry representatives pointed out that the visibly slow progress in rebuilding some Gulf Coast communities, most notably New Orleans, is due to the tremendous damage the storm did to municipal infrastructures (roads, waterways, and railways, water systems, electrical systems, schools and hospitals), to delays in the allocation and distribution of government funds, and to the tremendous dislocation of large segments of the population in the region—not to the lack of insurance dollars.

“There has been very little reporting on the fact that Gulf Coast banks are swollen with payments from insurance settlements and that the majority of the rebuilding efforts in the region are fueled by those claims payments,” said Gov. Marc Racicot, president of the American Insurance Association (AIA).

“Those homeowners and business owners who took prudent steps to adequately insure their property before the storm, particularly the purchase of flood insurance from the federal government, had the financial resources to rebuild in the Gulf Coast or to relocate,” said Racicot. “Unfortunately, the dramatic demographic shift in the Gulf Coast has resulted in many businesses thinking twice before re-opening in the same location and many citizens seeking areas with better schools and public services.”

The insurance industry representatives pointed out that the financial strength of the industry prior to Hurricane Katrina allowed companies to pay all covered claims promptly.

With the increased likelihood that stronger and more frequent storms will hit the U.S. in the coming years, a financially healthy insurance industry is a key component in protecting individuals and the U.S. economy from future natural disasters.

http://www.namic.org/newsreleases07/070829nr1.asp?utm_source=weekly&utm_medium=email

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