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'Tort Reform, Industry Reform'

August 13, 1986

Congratulations on your editorial (Aug. 5), "Tort Reform, Industry Reform." The reading public is finally getting some intelligent help in understanding this problem.

You write that the legal system bears at least some responsibility for the astronomical increase in insurance rates. I would suggest you examine how this has occurred. In our adversary system of jurisprudence, advocates are always going to try to get whatever they can for their clients. It is the courts that are supposed to exercise calm and reasoned judgment in supervising jury verdicts. Unfortunately, our appellate courts have virtually abrogated this responsibility.

When trial judges attempt to reduce unreasonable jury verdicts, they are frequently overruled by the appellate courts. The jury verdict has become almost untouchable. This is wrong.

Your editorial states: "The answer won't be known until a relationship between claims and premiums is established," and goes on to say that this cannot be done until insurance companies open their books. If you will go back a step or two into the insurance process, you will find that opening the books may not be very helpful.

I would wager the companies themselves have as yet no experience with such problems as claims of child abuse at day-care establishments. Trying to calculate the premium that should be charged to enable a company to respond in damages to such a claim is just not possible without a broad spectrum of claims, settlements, jury results, appellate opinions and years of experience to draw upon.

What is unconscionable is for an insurance company to triple the premium for an insured whose claim record is known and stable, whose risk and exposure is constant, and whose efforts to reduce even minimum risks are ongoing and effective. Even worse, to deny coverage for such a customer is the next thing to criminal conduct.

However, items such as your editorial are good steps in the direction of coming to grips with the many facets of this problem.

JOHN H. BARRETT

San Diego

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