Allstate Tactics on Display with Internal Company Documents in Georgia Civil Trial
By Gerri Elder
It wouldn't surprise anyone to learn that Allstate Insurance Co. has faced more and more scrutiny of subversive tactics involving personal injury claims and payouts. Like all insurance companies, Allstate protects its own bottom line by using any strategy it can think of to pay the least amount of money possible through low settlements, threatening extensive, drawn-out legal proceedings and outright rejecting claims for illegitimate reasons.
However, a new civil trial could be a major blow to Allstate's reputation and bank account by focusing on these very tactics that Allstate has been able to deny for years.
The new trial, slated for Fayette Circuit Court in Georgia, is for a massive lawsuit of $1.425 billion, filed by Geneva Hager of Richmond, Georgia.
What is particularly groundbreaking about the civil trial is that a set of documents that detail the evolution of the insurance company's claims handling through the 1990s will be publicly revealed for only the third time during the trial.
The so-called "McKinsey" documents, named after the consulting firm that helped Allstate revise its claim-handling practices in the mid-1990s, are a group of 12,500 Powerpoint slides that detail the motivations for and behind-the-scenes reasoning on the claims process.
The most notorious part of the document is a section in which the writer does a word play on the company's motto, "You're in good hands with Allstate." As it's put in the document, the claimants who accept Allstate's offers are in "good hands" while those who object get the "boxing gloves." Trial lawyers who have been fortunate enough to see the McKinsey documents call them a blueprint for fraud.
Hager's attorneys claim in their lawsuit what has become an all-too-familiar story for personal injury victims trying to get insurance claims approved for their medical needs. They accuse Allstate of systematically engaging in various schemes and delay tactics to bully car accident victims into accepting unfair compensation for personal injury claims.
Hager's complaints arose from her dealings with Allstate during an insurance claim she made for a 1997 truck accident injury. It took two years for her to the claim, which was settled for the $25,000 policy limits four days after it was scheduled for trial.
However, for the tactics that she faced during the two-year delay, Hager is seeking $475 million in compensatory damages, and $950 million in punitive damages. Originally, the suit sought $6 million, and many believe that the unprecedentedly high damages request could potentially hurt Hager's case.
Previously, Allstate has characterized its stringent claim-handling process as a necessary step in order to uncover fraud and discourage potential illegitimate claims. However, the many lawsuits currently in court against the company portray these tactics otherwise.
Homeowners in Louisiana have alleged that Allstate used hardball tactics to deny coverage or reject claims following damage done by Hurricane Katrina, among the presence of countless other cases regarding Allstate's tactics have gone to trial or been settled.
Yet, this is only the third time that the McKinsey documents are being allowed to be used as evidence in the case. In order to prevent them from being released, Allstate has paid massive fines to delay or ignore cases. For instance, since September 4, the insurer has been paying the state of Missouri $25,000 per day for refusing to make the documents public in a court case there.
They are currently appealing the case in the Missouri Supreme Court, content to continue paying the $25K per day fine instead of allowing for the possibility of letting these documents go public.
After the Fayette Circuit trial, Allstate has asked Judge Thomas Clark, who is ruling on the case, to seal the documents after trial, a very unusual request. Clark has ruled the documents are not trade secrets, giving Hager's lawyers access to them for the case. On their part, Hager's lawyers have not gone public with the information yet as a gesture of good faith in order to prevent the trial from delaying indefinitely as Allstate continues appeals.
However, for those personal injury victims who have seen Allstate tactics all too closely, there may be good news in the revelation of this information that has been kept behind locked doors for too long. Obviously, given the extreme measures that Allstate has taken in order to prevent the information from being disclosed, there's something they're trying to hide.