The ability to accurately evaluate comparative negligence in automobile accidents is a vital skill for any claim representative. The liability decision support system used by the claim representative must serve to augment and bring consistency rather than restrict that skill. Unfortunately many of the liability decision support systems used by insurers today are designed to second guess the skilled thought processes of the claim representative and channel them into a pre-determined, one-size-fits-all decision tree. Although, many would tell a tale of the salvation of their computer programs – we are not of that mind set.
In this article we will show how an advanced liability decision support system can augment the inherent skills of the claim representative and allow that representative to make comparative negligence evaluations that are multidimensional, viewing the claim as a whole rather than as isolated elements. This multidimensional approach allows the claim representative to structure their evaluations of the key elements of the investigation to make comparative negligence assessments. In addition, these assessments reflect both the factual elements of the claim as well as the more intangible elements such as credibility, quality, and reliability of information sources, elements which can have major impacts on the outcome of negotiations or litigation.
Brief History of the Development of Comparative Negligence vs. Contributory Negligence
Over the past half century the doctrine of comparative negligence has gradually replaced that of contributory negligence in American tort law and has now become the standard in state automobile insurance regulations across the country. In a 2001 Harvard Law School – John M. Olin Center discussion paper, author Oren Bar-Gill noted:
The comparative negligence rule, and more generally the principle of comparative fault, is sweeping through the law of torts, and beyond. Through statutory intervention or judicial innovation, the traditional common law doctrine of contributory negligence has been gradually pushed aside. And the march of comparative fault continues. (Paper 346, 12/2001, p4)
The contributory negligence doctrine had been the governing standard for automobile insurance law for the first half of the twentieth century throughout most of the United States (it remains so in four states and the District of Columbia – see Appendix A). Under the contributory negligence system, third party lawsuits for injuries sustained in automobile accidents were not permitted if the plaintiff in that lawsuit was judged to be even partially at fault in the accident. It did not matter how minor the fault, if it existed at all, recovery of damages was prohibited.
Acceptance of the contributory negligence standard slowly began to decline as dissatisfaction with its relatively harsh results grew among the general public. Pressure from the motoring public and lobbying from trial attorneys resulted in a shift away from the contributory negligence standard. State legislatures across the country began to substitute the new standard of comparative negligence into their automobile insurance regulations. Comparative negligence in its simplest form is a legal doctrine that enables claimants to recover a portion of their damages even when they are judged to be partially at fault for an accident. Each driver’s degree of negligence is compared to that of the others and a claimant’s recovery is reduced by the percentage of his or her negligence.
Depending upon state statutes, comparative negligence takes one of three forms: pure comparative negligence, modified comparative negligence – 50% rule, or modified comparative negligence – 51% rule.
- Pure comparative negligence – Thirteen states use the pure comparative negligence rule which allows any person suffering damages to recover even if that person was 99% at fault. Any damages awarded however, are reduced, by the damaged party’s degree of fault. In a noted 1975 decision (Li v. Yellow Cab Company), the California Supreme Court, moved the state of California from a contributory negligence system to one of pure comparative negligence. In its decision the court mandated that:
Therefore, in all actions for negligence resulting in injury to person or property, the contributory negligence of the person injured in person or property shall not bar recovery, but the damages awarded shall be diminished in proportion to the amount of negligence attributable to the person recovering. (1975, p10)
- Modified comparative negligence – 50% rule. In the twelve states utilizing this variation of modified comparative negligence an injured third party can only recover damages if his or her fault does not reach 50%. If a driver is judged to be 50% or more responsible for an accident that driver is prohibited from recovering damages. As with pure comparative negligence, damage awards are apportioned according to the degree of responsibility.
- Modified comparative negligence – 51% rule. Twenty one states use the 51% rule. Under this version of modified comparative negligence an injured third party may recover damages if his or her responsibility is 50% or less. In other words damages can be awarded to a driver who was 50% responsible for the accident, but not if he or she was 51% or more responsible. As with pure comparative negligence, damage awards are apportioned according to the degree of responsibility.
Note – for a listing of the damage award system in use by each state, see appendix A at the end of this article.
A Structured Approach to Evaluating the Components of a Claim Investigation
All claim investigations are built around three key foundational pillars: investigative reports, physical evidence, and statements. Investigative reports can take the form of police reports, accident scene photos, skid mark analysis etc. Physical evidence is the evidence resulting from an accident – damage to vehicles and injuries to those involved. Statements include statements by the involved parties or witnesses, made to the police at the scene or to the adjuster during his or her investigation, as well as statements provided by expert witnesses brought in to analyze specific elements of the claim.
During the initial portion of a claim investigation the goal of the adjuster is to ascertain the facts of the accident and to determine the liability of each of the involved parties – the claimant (or claimants) and the insured. A key element in determining liability is assessing the comparative negligence for each party involved in the accident.
In assessing comparative negligence, the adjuster uses the investigative reports, physical evidence, and statements to evaluate their content as well as their reliability, quality, and credibility. This evaluation in essence determines if there was a breach of duty by any of the involved parties and if so, what part those breaches of duty played in the accident. This linkage is important given the fact that the concepts of duty owed and duty breached are tort concepts that would be used in a judicial context. Below is a summary of the main elements inherent in the concept of negligence and breach of duty as outlined by author David J. Shestokas in his article, “The Law of Negligence”:
Doctrine of Breach of Duty in Motor Vehicle Accidents
A claim investigation can establish that an insured either had no duty or did not breach a duty they did have, or it can establish that a claimant contributed to an accident by breaching a duty the claimant had.
In order to recover damages based on negligence a claimant must prove that all of the elements that comprise negligence are present. These elements are:
- Existence of a duty by the insured
- Breach of that duty by the insured
- Actual harm or damages caused to the claimant
- The breach of duty by the insured was the proximate cause of the actual harm or damages suffered by the claimant. (Mar 25, 2009, p1)
The operation of a motor vehicle on a public roadway imposes duties upon the operator. There are duties that are common among all states and jurisdictions and there are other duties that are state specific. Common duties include:
- Duty to look out – you must pay attention and be aware while driving.
- Duty to operate safely
- Duty to Avoid – you must do all that is reasonable to avoid a collision or contact with another vehicle or pedestrian.
- Duty to obey traffic laws
- Duties created under the “reasonable man” theory. – You must operate your vehicle as would a “reasonable man” in similar circumstances.
The breach of duty concept is fundamental in assessing degrees of comparative negligence for both claimants and insureds. Anyone who is determined to have a breach of duty in an accident is negligent. In any accident, one or both parties can be found to have committed a breach of duty resulting in negligence which contributed to the accident. A sophisticated liability decision support system can assist the adjuster in determining comparative negligence by allowing the adjuster to rate the reliability, quality, and credibility of each the three investigative pillars: the investigative reports, physical evidence, and statements. These ratings, based on the expertise and experience of the adjuster, are used by the liability decision support system in determining the probable shared responsibility of the claimant for the accident.
Given the fact that this assessment of duty owed duty breached is critical to a comparative negligence determination, a system that provides investigation survey templates that are populated with the factors that are relevant in determining the comparative negligence of both the claimant and the insured is paramount. The factors within the templates will assist in determining which driver breached which duty, and the degree those breaches played in the comparative negligence of the claimant and the insured. Because those factors vary greatly with the specific type of accident, the liability decision support system must be adaptive and flexible enough to provide the adjuster with only those query sets that are relevant to the specifics of the particular accident. In addition, a truly advanced liability decision support system will allow an adjuster to use their experience in rating the reliability, quality, and credibility of the reports, physical evidence, and statements themselves. These ratings will be used in generating both comparative negligence assessments and in more advanced systems, an overall strength of case evaluation which can assist the adjuster in deciding the best strategy to adopt in settling the claim. This will insure consistency across claims and within the organization, and provide defensibility should the analytical process itself be challenged.
The results of the analysis provided by the liability decision support system should produce a liability and comparative negligence assessment that provides a useful guideline that the adjuster can use for negotiations and settlement of the claim. We have found that providing the adjuster a visual scaled representation of the probability of the claimant’s shared responsibility for the accident, is an effective method of alerting the adjuster that there is a comparative negligence element that should be pursued.
When considering the processes involved in the investigation and evaluation of claims some of the fundamentals that an organization should keep in mind include:
- The liability decision support system should allow the adjuster to focus on the key elements of the claim, and produce a liability and comparative negligence assessment that provides a guideline for negotiations and settlement of the claim.
- The adjuster must have the flexibility in their investigation to pursue whatever avenues of information are relevant to the claim. The liability decision support system must not become an impediment to that flexibility by forcing the adjuster to adhere to a pre-determined, one-size-fits-all investigative template.
- The liability decision support system must provide a support structure that allows the adjuster to apply their investigative skills in the most productive and efficient manner.
- In assessing liability and comparative negligence the adjuster must be able to document objective and consistent standards that are applied across all claims. The liability decision support system should provide a mechanism that is defensible and demonstrably unbiased.
- Ideally, the liability decision support system will also provide an objective assessment of the strength of case in the event the claim was to proceed to litigation.
- The liability decision support system should provide a mechanism that allows the adjuster to enter both the factual and subjective elements of the claim for evaluation. The evaluation returned should provide both a strength of case rating, and negotiation points that can be used by the adjuster in determining whether a case should be defended or settled.
The liability decision support system should augment and support the adjuster’s investigation and evaluation of the claim. It should not be thought of as a sort of “electronic adjuster” that is able to replace the judgment, skill, and analytical expertise of the adjuster. Rather, it should serve to aid the adjuster’s evaluation of the claim by structuring the process of the evaluation itself. Providing a structural framework upon which the adjuster can build an evaluation gives consistency to the evaluation process across claims and throughout the organization.
Bar-Gill, Oren. (12/2001, p4). “Does Uncertainty Call for Comparative Negligence?” (Paper 346). Harvard Law School John M. Olin Center for Law, Economics and Business Discussion Paper Series. Retrieved 2/10/2011 from: http://lsr.nellco.org/cgi/viewcontent.cgi?article=1134&context=harvard_olin
Li v. Yellow Cab Co. (1975 p10) 13 C3d 804 [L.A. 30277 Cal Sup Ct Mar., 31, 1975] Opinion – Sullivan, J. – III . Retrieved 3/11/2011 from: http://online.ceb.com/calcases/C3/13C3d804.htm
Shestokas, David J. (Mar 25, 2009, p1). The Law of Negligence: Duty, Breach of Duty, Injury and Causation. Suite 101.com. Retrieved 3/8/10 from: http://www.suite101.com/content/the-law-of-negligence-a105023
Appendix A – Damage Award Systems Used by the Various States
Contributory Negligence States: Alabama, Maryland, North Carolina, Virginia, (Washington D.C.)
Pure Comparative Negligence States: Alaska, Arizona, California, Florida, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, New York, Rhode Island, South Dakota, Washington
Modified Comparative Negligence States – 50% Rule: Arkansas, Colorado, Georgia, Idaho, Kansas, Maine, Nebraska, North Dakota, Oklahoma, Tennessee, Utah, West Virginia
Modified Comparative Negligence States – 51% Rule: Connecticut, Delaware, Hawaii, Illinois, Indiana, Iowa, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Hampshire, New Jersey, Ohio, Oregon, Pennsylvania, South Carolina, Texas, Vermont, Wisconsin, Wyoming
(CC) March 2011 Vatti-Manhattan Group
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