There is an insurance company myth, often promoted by radio talk show hosts, about a litigation explosion that is damaging our country and our economy. Some call it a “lawsuit tax.” What they are suggesting is that uninjured people are going out and suing anyone they can for money. I’d like to clear this up with the real numbers.
I’m researching a new book that I’ve been working on for two years, and have some interesting numbers that tell the truth about how few people injured in a car crash end up going to trial. And these numbers come right from the insurance industry’s research arm, the Insurance Research Council, which releases reports on auto claim trends every five years. I’ve gone back and read several of these reports going back to the 1990’s (each about 250 pages) in order to provide you this summary that will go in my new book.
Due to changes in bumper construction starting in the 1990s, resulting in bumpers that are stiffer so they will decrease vehicle damage claims, the seriousness of injuries to people within these cars has increased. Auto manufacturers and insurers have successfully decreased the number of vehicle damage claims by 18% between 1990 and 2010, using information on crash damage from crash tests performed by the Insurance Institute on Highway Safety. This is why we now see so many people injured in crashes that result in little or no vehicle damage. The scientific literature has now demonstrated crashes up to 14 mph with no visible vehicle damage.
In fact, between 2005 and 2010 total property damage costs increased by only 1% despite five years of inflation on cars and car parts.  While less people seem to be getting injured and making claims (bodily injury claims have decreased by 29% between 1990 and 2010) despite what insurers are telling the public, the people who are injured seem to be getting hurt worse because of the stiffer bumpers.
According to the Insurance Research Council, only one in five (1:5) people who are hit in a car accident make any bodily injury claim – quite the opposite to what the insurance companies lead the public to believe is a “litigation explosion” Insurers have known that there has been no litigation outbreak in auto cases in America at least since 1999, when the IRC published its report “Injuries in Auto Accidents,” noting that of those one in five that makes any kind of personal injury insurance claim, less than 1% of all auto claims were filed for litigation, and that of those cases filed, more than 90% resulted in pre-trial settlements.  This means that in 1999, less than 0.02% of all auto accidents, and less than 0.1% of all auto injury claims went to trial. If I were to draw a pie chart representing all auto accident claims where injuries were reported, that 0.1% that made it to trial would be the size of a hair. If taken from the total of all car crashes, the number that reach trial would be so small it would be invisible. That is what the insurance industry is representing to potential jurors as a mad rush to the “lawsuit lottery.”
And, even that percentage has fallen since 1999. In fact, the number of bodily injury claims being made has fallen 24% between 1995 and 2011.  And an even smaller percentage of cases are going to trial. This leaves us with a situation in which the public (and the potential jurors deciding the value of our client’s cases) have been misled about the frequency and size of claims being made when someone is legitimately injured. The public deserves to know it is being intentionally misled by an insurance industry that is ignoring its own numbers. Insurance companies do this, knowing that if they can outrage jurors with lies about a “lawsuit lottery,” they will not be forced to pay equal value to the economic and personal losses experienced by injured people.
Rather than accepting the truth and offering a reasonable settlement offer, insurers hire doctors who will compound the lies by telling jurors that our clients are not injured and are the liars instead. They wrap the term “liar” in fancy medical or psychological terms like “malingering” or “somatoform disorder” (a term suggesting that someone has a personality disorder and is lying without even knowing it.) Imagine being injured, and trying to get better, just to have the other person’s insurance company (or your own) call you a liar, and hire doctors to say you are a liar to the jury. That’s what happens in every one of our trials.
The insurance companies pay any doctor willing to call an injured person a liar a lot of money. In fact, some doctors make their living out of doing just that. Some doctors make hundreds of thousands to millions of dollars per year to provide insurance companies reports and testimony saying that injured people aren’t injured. But, that issue aside, lets get back to the real numbers.
In our primary jurisdiction of practice, Multnomah County in Portland, Oregon, there have only been 95-105 civil jury trials per year for the past five plus years. That is out of approximately 13,000 civil cases filed. That means that 0.00807/100 cases filed go to trial in Multnomah County (by far the largest litigation county in Oregon) actually goes to trial. Of those 95-105 civil trials, many are contractual disputes between corporations, intellectual property disputes between corporations or individuals, contract disputes between individuals, civil sex exploitation cases, or other civil disputes. Only a fraction of all civil trials in a year are injury claims, and only a fraction of those involve personal injuries from auto accidents. So, only a handful of auto cases go to trial each year.
This is why, many are concerned that a cornerstone of the US Constitution, providing for a civil trial by a jury of your peers, is dying due to false messages by insurance companies and corporations that want to prevent injured people from recovering fair compensation when they are injured. Its a trend discussed at length in the recent HBO documentary Hot Coffee.
If juries continue to be swayed by these lies and turn away injured members of society, there will be no way to get help you, your friends or your family members when they are injured by someone acting dangerously. Plus, when jurors allow the responsible party to escape personal responsibility for their actions, we all pick up the financial costs for the injured person by paying for their support though public benefits. Who should be paying for the problem, the insurance company of the person who caused it, or everyone else?
Unfortunately, Oregon is one of few states with no viable laws for suing the insurance company directly for “bad faith” in the event the insurance company makes an unreasonably low offer, or no offer at all. In fact, some of our largest verdicts have been in cases where there has been an offer that was up to 100 times lower than the eventual verdict. In Oregon, there is no penalty to the insurer for failing to make a reasonable offer. Because insurers and other companies have created the impression through ads, television shows and movies that injured people are greedy and want to sue for nothing, they make little or no offer for injuries and then rely upon jurors to turn away injured people at trial.
Our firm continues to go to trial for our clients, because we think every person is worth fair compensation if they are injured out of no fault of their own. Why? Because in the United States we believe every person is created equal, and should be treated equally before the law. We represent more seriously injured people who need a lawyer who will go all the way through trial when the insurer doesn’t make a reasonable offer of compensation for injuries. None of our clients wants to sue anyone - it is always a choice of last resort. Litigation is very stressful, and, a trial is very expensive for our clients because they have to pay for doctors and other expert witnesses to come testify for them. But, when an insurer tells our client that the value of their life, and the injuries they have sustained are worth little or nothing, litigation is the only possibility to get fair compensation. They have to put their lives in the hands of 12 strangers, and hope they get an intelligent and impartial jury who is willing to give them a fair chance, who will not consider insurance company lies in deciding their fate.
 Trends in Auto Injury Claims, Insurance Research Council (2011), p. 8.
 Insurance Research Council, Injuries in Auto Accidents, p. 74 (1999). See also Saks “Do We Really Know Anything About the Behavior of the Tort Litigation System – And Why Not?” 1147, 1212-13, University of Pennsylvania Law Review Vol. 140, No. 4 (April 1992).
 Trends in Auto Injury Claims, Insurance Research Council (2011), p. 8.