How About NO Judges Attending?

When a judicial branch has a monopoly on hearing a certain type of case, one would think that judges in that branch would be meticulous in steering clear of anything which might make them look like they favored one side or the other.

Why then do some Federal District Court judges continue to attend a luxurious “forum” on Defending and Managing ERISA Litigation, a conference which “…is devoted entirely to the defense of claims…”? There has been an improvement, though. Last year 21 Federal judges attended this meeting (see Lest Ye Be Judged). This year only 9 Federal judges are scheduled to speak.

That’s progress, but what about ERISA disability income claimants who may be litigants in the district courts of these judges? How comfortable can they be?

We would guess the claimants would not be too comfortable if they knew the flier announcing the conference proclaims that the attending judges will discuss for the attending ERISA defense lawyers: "View from The Bench: Federal District & Magistrate Judges Speak out on How to Convey Complexities to the Court (including plan documents and the ERISA Statute), Effective Theories/Defenses, Evidentiary Approaches, Statute of Limitations, Deciding Cases Early, Discovery, Forum Shopping and More."

The brochure follows this synopsis of judicial topics with more of an explanation: “You cannot afford to miss this unique opportunity to hear (from the judges): “…the theories and defenses that are most effective; which arguments are most effective on a motion to dismiss; the best ways to limit discovery in a conflict of interest situation; and judicial pet peeves that could turn a case in your favor”.

These judicial insights are being revealed to a conference which strictly appeals to one side of bar - the ERISA litigation defense bar. If you figure that the judge’s trip to the posh Helsmsley Hotel in New York and other seminar goodies were paid for by the conference sponsors and that the judges were surrounded for a couple of days by attendees whose sole occupation is to beat ERISA claimants in courts presided over by Federal District Court judges, you have to wonder why any judges participate.

How “comforting” to a disabled ERISA worker trying to battle an insurance company for disability benefits, especially if the claimant’s case is being heard by one of the judges on the panel giving insights to insurance defense lawyers.

We know that some judges are able to overcome the effects of being treated well and being exposed to a one-sided view of a legal issue, but why should an ERISA litigant have to wonder if his or her judge is one who can really shuck off all that one-sided baggage?

Wouldn’t it be better for judges to avoid attending and lecturing at highly partisan convocations which take a single-minded, biased view of a legal issue when that legal issue might well come before that judge in future?

Like Caesar’s wife, these arbiters of ERISA claims should be above any suspicion.


Insurers Love "Docility"

Ever wonder why insurance companies pursue a policy of turning down apparently valid claims out of hand? I have and the only thing I can figure is that they are relying on the “docility” factor. They have found through experience that a substantial number of people will accept a turndown, right or wrong, and do nothing further about it.

One would expect an insurance company to have a tendency to say “no” when asked to pay a claim. That is not what is surprising. What is surprising is that they say “no” in cases where they know they are likely to have to pay. This is because when they say “no”, there are a slew of additional costs in defending a claim which they know they are likely to have to pay anyway.

Why they do this is a mystery which seems to have one likely solution – they do it because it saves the insurers money.

The one thing you can bet on with certainty is that insurance companies can mathematically calculate the probability of any financial result they face. They know how much the legal, medical, court, and internal costs of litigating a claim will likely be.  And, they know these costs are substantial. So, why do they do it?

They do it because they have also calculated the “docility” factor – the chance that a valid claimant will not challenge a denial of a claim for a variety of reasons. Nobody but the insurance companies know the percentage of valid, but denied, claims which are never pushed to a conclusion, but even if the number is between 10% and 20%, the savings turn out to be a big windfall for the insurance companies.

Some of the reasons people may not fight for their rights are innate - they hate conflict and controversy. Other reasons (excuses) are:

  • "You can't fight City Hall", i.e.,insurance companies are too big and powerful ever to be challenged by an individual.
  • They find it difficult to cope with stress.
  • They believe the insurance company acted fairly and made an unprejudiced decision.
  • They won’t take the risk of spending money on fees without a guarantee they will win.
  • They have an aversion to getting involved with a lawyer (I wonder if insurance companies have been fostering all of those “shark” jokes about lawyers). The vast majority of lawyers don’t bite, no matter what the jokes lead you to believe. If they are retained by you, lawyers work for you and only for you and your claim.

There is a whole host of reasons (maybe excuses) why a goodly number of people will not take on an insurance company. And, in that goodly number of people lies a treasure for insurers.

This is particularly so in disability income and long term care insurance claims. The payments for these types of claims can go on for decades and cost millions of dollars. Evading payment on 10% or 20% of these types of claims comes to a hefty amount of money saved for the insurance companies. And, since insurers do this consistently, one has to believe that they know that the “docility” savings more than offset what they spend to defend claims they know they will have to pay – if the claimants undertake and follow through on the job of properly pursuing the claim.

Advice to the leery claimant: Before you become one of the “docility” herd, have a competent insurance attorney evaluate your claim and advise you on if and how to challenge a denied claim.

Only then is it fair to yourself to decide whether or not to pursue you claim.