Weston, S. Burns

English

Case Western Reserve University School of Law

Case Western Reserve Law ReviewVolume 23 | Issue 21972The Injury Industry - and the Remedy of No-FaultInsurance, by Jeffrey O'ConnellS. Burns WestonFollow this and additional works at: https://scholarlycommons.law.case.edu/caselrevPart of the Law CommonsThis Book Review is brought to you for free and open access by the Student Journals at Case Western Reserve University School of Law ScholarlyCommons. It has been accepted for inclusion in Case Western Reserve Law Review by an authorized administrator of Case Western Reserve UniversitySchool of Law Scholarly Commons.Recommended CitationS. Burns Weston, The Injury Industry - and the Remedy of No-Fault Insurance, by Jeffrey O'Connell, 23 Case W. Res. L. Rev. 437 (1972)Available at: https://scholarlycommons.law.case.edu/caselrev/vol23/iss2/1119721BOOK REVIEWTHE INJURY INDUSTRY - AND THE REMEDY OF NO-FAULT INSUR-ANCE. By Jeffrey O'Connell. Chicago: Commerce Clearing House,Inc. 1971. Pp. 268. $8.50.The name of Jeffrey O'Connell, Professor of Law at the Uni-versity of Illinois, has gained national prominence. In 1965, Pro-fessor O'Connell, in joint venture with Professor Robert Keetonof Harvard, published Basic Protection for the Traffic Victim, com-monly known as the Keeton-O'Connell no-fault concept for auto-mobile insurance. Since then Professor O'Connell has extensivelypromoted no-fault insurance as the panacea to cure criticisms of thepresent insurance system that is based upon the proof-of-fault con-cept. He even suggests that no-fault, which in effect abandons per-sonal responsibility, should not be restricted to the automobile.The idea of applying the no-fault principle to automobile acci-dent cases was first proposed in 1919' and again more specificallyin 1932.2 However, it was not until the Keeton-O'Connell assaulton the proof-of-fault principle that the no-fault concept was givenextensive publicity. In the last six years, at least 40 variations ofno-fault insurance have been formulated, bills have been intro-duced in several state legislatures, and a number of states have en-acted no-fault legislation.3At first neither the insurance industry, the organized bar norlegislators took seriously the Keeton-O'Connell proposal, but even-tually there was an awakening to the potential revolution. First,some of the insurance industry spoke out, although without a con-sensus, urging the widest possible range of proposals. Some ofthese proposals went further than Keeton-O'Connell, while othersconstructively opposed their plan. Belatedly the organized bar alsobegan to express itself.The fact is that today's no-fault proponents are asking for areturn to the English common law of the 17th century, when onecausing harm to another was required to pay damages regardless of1 Carman, Is a Motor Vehicle Compensation Act Advisable?, 4 MINN. L. REv. 1(1919).2 COLUMBIA UNIVERSITY COUNCIL FOR RESEARcH IN THE SOCIAL SCIENcES, RE-PORT BY THE COMM. TO STUDY COMPENSATION FOR AUTOMOBILE AccIDENT 299(1932).3 The Illinois statute has recently been declared unconstitutional. See Grace v.Hewlett, 40 U.S.L.W. 1105 (Ill. Cir. Ct. 1971).CASE WESTERN RESERVE LAW REVIEW [Vol. 23:437fault.4 Why now a return to this 17th century concept? ProfessorO'Connell argues that the automobile is the culprit, because its wide-spread use causes so many accidents and injuries and gives rise toso many claims and lawsuits that numerous court dockets becomedogged. Also, O'Connell believes that too much is paid for minorinjuries and too little for the serious ones, and that the cost of auto-mobile insurance is too high. Whether or not one agrees that no-fault insurance is a cure-all, there is no question that the Keeton-O'Connell proposal of the mid-60's focused attention upon the needto face up to the "impact" of the automobile in producing death,injury and economic loss.In legal parlance Professor O'Connell's latest work, The InjuryIndustry - and the Remedy of No-Fault Insurance, serves as thecomplaint, answer, some evidence and the jury's verdict. No onedenies O'Connell's sincere commitment to no-fault insurance legis-lation, but to a knowledgeable reader his theme is weakened bydogmatic, extravagant, broad-brush accusations against those with adifferent point of view. One would think that anything wrong withthe fault system is due to the venality of claimants, lawyers, theinsurance industry or automobile manufacturers.For example, Daniel P. Moynihan - who wrote the forewordand is quoted several times in the text, presumably with approval -states that the judicial system cannot allocate costs of motor vehiclecrashes "efficiently or even, it would appear, fairly."5  But the factis the judicial system has been determining costs fairly for manyyears. In another instance, it is alleged that the allocation of colli-sion costs "has brought on a near breakdown of the judicial systemitself [and that the] courts are overwhelmed, swamped, inundated,choked."' To the contrary, the judicial system is making substan-tial improvements, through constitutional amendments, legislationand action by the courts themselves. Granted that an independentjudiciary is among the most precious of our institutions, it is notbeing sacrificed as Moynihan claims. It is viable. Both Moynihanand O'Connell ignore the increase of criminal and divorce cases and4 See Weaver v. Ward, 80 Eng. Rep. 284 (K.B. 1617); Dickinson v. Watson, 84Eng. Rep. 1218 (K.B. 1682). See also Ames, Law and Morals, 22 HARV. L REV. 97,99 (1908); Wigmore Responsibility for Tortious Acts; Its History - i1, 7 HARv. L.REV. 441, 443 (1894).5 Moynihan, Foreward to J. O'CONNELL, THE INJURY INDUSTRY - AND THE REM-EDY OF NO-FAULT INSURANCE at xi (1971).6Id.BOOK REVIEWthe fact that negligence actions account for only a small fraction ofthe civil cases the court must consider.7At the outset Professor O'Connell blasts the entire insurance sys-tem as "cruel, corrupt, self-righteous, dilatory, expensive and waste-ful while it grimly goes about the business of failing."8 Undoubt-edly there are isolated examples to support some of these accusa-tions but do we burn down the house to save the baby?O'Connell constantly refers to the high cost of automobile insur-ance and contends that the limited no-fault Keeton-O'Connell planwould cost substantially less - if the modest no-fault bill in Massa-chusetts can result in savings, "the savings from a truly adequateno-fault bill [wouldj obviously be that much more impressive."'It is true that the limited experience in Massachusetts indicates lowerinsurance costs with the no-fault plan, but this is only part of thestory. A recent United Press release from Boston states: "In fact,many drivers are paying more for auto insurance because reductionsin bodily injury premiums under the no-fault plan have been morethan offset by increased costs for property liability and collisioncoverage.'"'" Moreover, there is still the cost of liability insuranceprotection from claims or lawsuits against the alleged wrongdoerfor damages above the $2,000 no-fault limit in Massachusetts. InAppendix III, O'Connell himself expresses doubt about cost savings.Some other examples of the author's barbs include: "Lawyershave traditionally been notorious for being dilatory and extravagantoperators."'" And while he suggests a milder course, nevertheless,the author quotes from Shakespeare: " 'The first thing we do, let'skill all the lawyers.' "12 "'All this chicanary by lawyers can lead tostrong public reaction.' ",13 He justly criticizes ambulance chasing,fee-splitting and abuses of the contingent fee among plaintiffs' law-yers and then asks, "[wjhere are the bar associations in the face ofall this flaunting of their Canons of Ethics?"'" The fact that suchtransgressions are hard to police is no excuse, but it is not fair tosay that all bar associations fail to enforce the Canons of Ethics.7 See Weston, What Now? - Defense Counsel Viewpoint, 34 INS. COUNSEL J.530 (1967).8 J. O'CONNELL, supra note 5, at 2.9 Id. at 120.10 The Cleveland Press, Jan. 5, 1972, at F-9, col. 1.11 J. O'CoNNELL, supra note 5, at 7.12 Id. at 7.13 Id. at 45.14 Id. at 63.19721CASE WESTERN RESERVE LAW REVIEW [Vol. 23:437Why no word about the responsibility of law schools in the selectionand training of students?As with other advocates of no-fault, O'Connell asserts that anylawyer who questions its being a panacea does so out of self-interest.When the Keeton-O'Connell Plan first argued that the fault con-cept in automobile insurance creates a socio-economic deficit, thisreviewer discussed the issues raised and suggested needed researchand possible remedies. 5 It was proposed that, if in fact there is animportant, unmet socio-economic problem, there should be first partycompulsory accident automobile insurance to protect the driver,pedestrian and passenger against net economic loss from medicaland hospital bills, lost wages and rehabilitation expenses. However,the claimant should be allowed recovery, upon proof of fault, fordamages not covered by no-fault insurance. O'Connell is correct inopposing the collateral source rule which permits double recoveryfor payments from other sources for economic loss.Concerning the "valuable asset" of traffic claims, the authorstates that "from the moment the asset is created, a skilled opponent(an insurance adjuster) is trying to take advantage of the owner'signorance by 'buying' his asset at a fraction of its value."' 6 All in-surance adjusters? How does such a charge square with the com-plaint that more is paid for small claims than is justified? Or thatmany claims are built-up to force nuisance settlements? Will no-fault eliminate built-up economic loss claims?The automobile manufacturer also does not go unscathed. Ac-cording to O'Connell, "[jfust as Detroit has long been notoriousfor building needlessly unsafe cars, so it has been equally guilty ofbuilding needlessly fragile ones.' '1 7  And yet, in another placeO'Connell argues that the decline in auto injuries and deaths is duenot only to better highways but to engineering advancements nowcommon in automobiles, such as seat belts, collapsible steering col-umns, and less dangerous windshields and dashboards.', As formore rigid licensing of automobile drivers or enforcing greater re-sponsibility for safe driving, the author subscribes to a Depart-ment of Transportation study which regards present driver behavior15 Weston, At Fault or Not At Fault, That is the Question, 32 INS. COUNSEL J.264 (1965); Weston, Defense Costs, Where Angels Fear to Tread, 34 INs. COUNSELJ. 244 (1967).16 O'CONNELL, supra note 5, at 67.17 Id. at 109.18 Id. at 127.BOOK REVIEWas normal, indeed inevitable, and places it last in priority for trafficsafety!On the one hand, O'Connell urges a $10,000 limited no-faultplan, with the right of the seriously injured to sue under the faultprinciple for economic loss and "psychic" damage, which is notcovered by no-fault insurance, but then states: "Why do we needto duplicate the no-fault insurance with liability insurance based onfault?"'19 He adds, "[w]ho benefits from all those suits over whowas at fault except lawyers and insurance companies ?"2 Where,in fact, does the author stand?O'Connell disputes the position that it is immoral for the wrong-doer to be reimbursed, arguing "that every form of insurance exceptliability insurance pays wrongdoers... ,"21 giving as examples life,accident, health, fire, medical, collision and social insurance. Is onewho dies, becomes ill, whose house is burned or whose car is stolena wrongdoer? Is one who has an accident or collects collision cover-age necessarily at fault?O'Connell also criticizes trial lawyers who argue that it is wrongfor no-fault to pay the drunk driver and allow him freedom fromliability. Then, the author comments that "[i]t is time the prob-lems of dealing with the drinking driver were discussed withoutfatuous fulminations commonly dominating such discussions."' Heexcuses the problem and social drinker on sociological grounds."We are a society whose mores, like it or not, call for drinking anddriving.""3  Will no-fault alter these mores? Should the problemdrinker be entitled to drive? Ownership of guns is permitted butthere is no right to use them to kill. If reimbursement to the alco-holic under no-fault is humane, is it not equally humane to preventhim from driving to avoid injury to others? Why the crying towelfor the drinking driver as to automobile accidents? Neither faultnor no-fault will cure him. From the standpoint of responsibilityfor one's acts, what is the difference between the drunk driver whocauses injury and death and the driver who is just plain reckless?As the book progresses, the author's accusations are undimin-ished. In his last chapter the author draws a strained analogy be-tween Detroit and the Pentagon:191d. at 113.-0 Id.21 Id. at 130.221d. at 132.23Id. at 133.19721CASE WESTERN RESERVE LAW REVIEW [Vol. 23:437What with the pervasive presence and effects of the automobileand the dominant place it has in our society in so many ways -economically, culturally, socially, atmospherically, legally - Gen-eral Eisenhower might just as reasonably have warned us of theinsidious and invidious effects of the automobile-industrial-com-plex as of the military-industrial-complex. 24And after sweeping statements about lawyers and insurance per-sonnel, the author concedes, in the Epilogue, that "[wle certainlyare not dealing, in the case of the defenders of the present system,with evil men," but two sentences later refers to "the extent of cor-ruption in the present system."25Professor O'Connell asserts that in auto insurance, the largelosses are not covered. 6 No doubt too much is paid for minorclaims, but there can be honest debate as to whether most seriouslosses are not well compensated by the party at fault. In any case,he recognizes that the seriously injured can recover only under thefault system, the system which he criticizes so vehemently. If it isso bad, why then such willingness to use it for recovery in seriouscases against the wrongdoer? The only other recourse apparentlywould be for the car driver to buy sufficient first party coverage overand above statutory limitations, at an unknown cost.It is not clear from the text whether O'Connell favors only ahigh limit no-fault (up to $10,000), without any recovery for painand suffering, or whether he believes there should be a right to sueunder the fault principle for economic loss and pain and sufferingthat no-fault does not cover. Appendices I, II and III give a betterinsight into his thinking, although even then his position is am-bivalent.In Appendix I, Vehicle Protection Insurance is recommended onan optional basis to cover property damage. It provides three op-tions: no-fault protection for the insured's own car damage; pro-tection for car damage only if the owner has a good fault claimagainst another; or "dispensing with all claims for damage to one'sown car while remaining free of liability for damage he might negli-gently cause to cars of others.' 7  None of these options includefire, theft or windstorm damage.Appendix II suggests an optional voluntary plan that gives theindividual the freedom to choose the kind of insurance he prefers. 28241d. at 151.251d. at 155.26 Id. at 5.27 Id. at 159.28 Id. at 163.BOOK REVIEWO'Connell mentions surveys indicating "that a significant number[of people] are apparently willing to live with the present faultsystem,"29 and indeed it is heartening to find a concession to "thefreedom and flexibility permitted by practical, competitive experi-mentation." 0 But the options in the overall plan are so varied thatone wonders how the resulting complexities of.coverage can be ad-ministered effectively, especially in view of the recognized statutorydissimilarities that would exist in various states. If the present sys-tem is complex, as the author maintains, no reader can fail to belost in the complexities of Appendix II. If no-fault is the answerfor small claims - and it may have to be - why not require limitedcompulsory no-fault ($2,000 to $5,000) and then third party liabil-ity coverage and uninsured motorist protection under financial re-sponsibility laws, with the voluntary option to buy collision andcomprehensive coverage?Would the Keeton-O'Connell plans cost less? Evidentiary proofis lacking. To the cost of no-fault insurance must be added the costof third party coverage plus property damage, collision and compre-hensive, which is about twice as much as the bodily injury liabilityalone. More and more questions are being raised.3'Finally, Appendix III. Here the author concedes that no-faultcoverage without limit is socially desirable, but he points out thatthis presents a "cost-equity dilemma" and returns, therefore, to theBasic Protection Plan, reserving tort action for severe cases. Ap-pendix III indicates doubts in Professor O'Connell's mind as to justwhat he favors. He does say that the solution to the cost-equitydilemma is:(1) to provide by compulsory insurance a basic level of no-faultinsurance for out-of-pocket losses of all victims, (2) to offer op-tional no-fault coverage for additional out-of-pocket losses withoutlimit and (3) to provide that tort actions will be preserved forlosses above the limit of the compulsory coverage, unless the victimhas elected to carry the unlimited no-fault coverage that wouldcorrespondingly preclude his tort claim in full.32But whether the foregoing is in fact what Professor O'Connell isrecommending, this reviewer cannot answer. And in the last para-graph still another concept is suggested: the inclusion of "a basicamount of liability insurance in the compulsory package [of] at29 Id.30 ld.31 See, e.g., Barron's, Jan. 17, 1972, at 7, col. 1.32 Id. at 173.19721CASE WESTERN RESERVE LAW REVIEW [Vol. 23:437least $10,000." 33 This leaves unanswered the question of what thecar owner does for protection against suits for damages that exceed$10,000, other than carry third party liability coverage, not to men-tion property and comprehensive protection as to his car.Everyone should acknowledge the need for some changes inanswering the personal injury and property damage issues arisingfrom the use of the automobile. Professor O'Connell forces us notto play ostrich by raising important questions. The problems areindeed complex, but O'Connell seems to further complicate thiscomplexity. One feels that Messrs. Keeton and O'Connell wouldaccept the general objective of serving the best interests of the pub-lic, but unfortunately, no method has been devised to bring togetherrepresentatives of the public, proponents of no-fault, the judiciary,the legal profession and insurance companies for a dispassionate,constructive dialogue to design an acceptable solution. There is thedanger of hopes becoming a mirage. In any case, the jury is stillout, and the courts and legislatures will be the final arbiters.S. BuRNs WESTON*33 Id. at 175.* Member of the Ohio Bar and the Committee for the Achievement of Justicethrough the Adversary System of the Insurance, Negligence and Compensation Law Sec-tion of the American Bar Association.

The Injury Industry - and the Remedy of No-Fault Insurance, by Jeffrey O\u27Connell

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The Injury Industry - and the Remedy of No-Fault Insurance, by Jeffrey O\u27Connell

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