O authored. The basic theory behind no-fault insurance is the application? first-party bene- fits ~~ to'y" automobile in- surance with the aim, hopefully, of cutting premium costs, speeding insurance payments, and encouraging more equitable settlements. Most types of insurance already work on a first-party basis in that it is not necessary to establish fault prior to paying benefits. With automobile insurance, however, there is often a long and ar- duous process of determining who is at fault and whose in- surance company will foot the bill for damages. In many cases this process becomes a legal hassle of fkajor proportions. The Nixo# Administration has taken a stand in favor of no fault insurance but it has also an- nounced that it will leave the job of instituting such insurance up to the individual states. There is, therefore, no absolute plans both adopted and pending throughout the country differ widely. No state has yet adopted what the American Insurance Associatic@gycalls a ‘total no- fault plan.” Under the AIA’s definition a total no-fault plan would require an accident victim’s insurance company to reimburse him for all out-of- pocket losses including wage loss, medical payments, and rehabilitation expenses. At the same time the AIA would in- ‘clude no provisions for recovery for general damage (pain and suffering) as part of com- pulsory insurance. Ideally this incurred $1 million in medical expenses, lost wages, etc., he would be paid that amount by his insurance company but he would have no right to sue for pain and suffering. The Denenberg bill (Senate Bill 999) comes closer to the AIA ideal plan than any other bill currently #¥der consideration in this country. In essence, 999 would reimburse an accident victim on a first-party basis for all: damage to property; all medical expenses, funeral charges to $1,000, expenses incurred for obtaining services in. substitution for those the victim would have performed, and economic loss up to a $36,000 ceiling (payments need not exceed $1,000 per month or 85 percent of the victim's monthly earnings, which ever is less). The bill requires all drivers (unless self-insured) to carry compulsary insurance, and sets the minimum liability coverage at $10,000 per person, $20,000 per accident, and $5,000 for property damage liability. The bill would allow compensa- tion for pain and suffering only if an injury caused death, loss of an eye or member of the body, or permanent and partial disability of 70 percent or more, or disfigurement that is per- manent, severe, and irreparable. Finally, the bill provides that economic loss payments must be made within 30 days or be subject to one percent interest per month and make mandatory a 10 percent rate reduction for insurance coverage. lawyers try to underplay this for obvious reasons. Not all trial lawyers-handle a signigicant amount of accident claims cases, but some lawyers work almost exclusively in this area. The Trial Lawyers Association has shown itself to be a powerful lobbying force, counting among its sympathizers many mem- bers of the state legislature who are themselves lawyers and who make up a good deal of the opposition to Mr. Denen- berg’s bill. This situation has extracted both hints and open accusations of conflict of in- terest from supporters of the administration measure. The primary aim of the Denenberg bill is to abolish the tort liability system of in- seriously restricts recovery for pain and suffering. In a letter to the Harrisburg Patriot, Davis S. Shrager, president of the Penn- sylvania Trial Lawyers Associ- ation, contends, ‘‘the Denen- berg bill is not a true no-fault bill because it completely de- nocent victim of the accident now enjoys to attempt to recover a fair measure of com- pensation for both the economic and non-economic or human loss associated with an acci- dent.” Under the Denenberg bill there would be no necessity to establish guilt or innocence in an accident case. Judge John Hester of the Allegheny County Court of Common pleas touched losses . .. The effect of this bill would be, according to Dr. Denenberg, to insure faster payments and cheaper premiums by cutting insurance company costs. ‘“The present system,” the insurance commissioner states,” burns up 58 cents of every premium dollar in expenses. Thirty percent of all premium dollars go for lawyer’s fees in claims adjustment expenses alone. Then there is the problem of ambulance chasing and phony claims . . . So the only ad- vantage of the present system is that it:provides juicy legal fees for trial attorneys'and alot of money for insurance company expenses.’ There is no doubt that the Denenberg bill would sub- stantially reduce the amount paid in legal fees, and con- sequently reduce case loads. in the Commonwealth’s courts. This fact is the basis for op- position from the Trial Lawyers Association, although the trial \ surance compensation, a system Dr. Denenberg calls a “consumer’s nightmare.” The U.S. Department of Tran- sportation study which con- cludes that less than 50 percent of those seriously: injured recover anything at all under the present system, and, that of those who do collect, the more seriously injured receive only a “small fraction’’ of their economic loss while the least seriously injured collect four times their loss. The insurance commissioner: sums; up. his position by saying, ‘the highly abstract standard of liability called ‘fault’ and the in- determinate measure of damages called ‘pain and suffering’ offer rich rewards to the claimant who will lie, the attorney who will chisel, and the insurance company that will stall or intimidate.” Those who take issue with S999 press the point that the bill on this during a Senate In- surance Committee hearing held in Pittsburgh last October. “Any program,’ the judge testified, ‘‘which proposes to pay or reward the offender, the party causing the accident, the reckless, irresponsible, ne- gligent driver, is one which is American system of justice.” The proposition that there would be no legally responsible party in an accident situation is a strong force behind opposition to no-fault. Some critics believe that the possibility of ‘guilt acts as a preventative to auto ac- cidents. Atty. Gerald Litvin, president of the Philadelphia Trial Lawyers Assoc., cites an engineering study commission- ed by 15 insurance counsel groups which concludes that “ . . adoption of a no-fault in- surance system would substan- tially increase the frequency of major automobile accidents.” Dr. Denenberg, in countering by Ralph Nader Presidential candidates, in- Lkie, Lindsay, McGovern and McCloskey, are about to, take positions on the issues of concentrated power, secrecy and monopolistic practices of giant cor- porations. monopolies and giantism into an election campaign is something of a revival. Although virtually * ignored for three decades @t draws on the historic aversion of many S¥mericans to the “trusts” that erupted on the national political stage with the popular-progressive movement in the early years of this century. Why, in an era of skyrocketing cam- paign costs, would any politician believe that the reform of corporate power is a subject sufficiently compelling to risk both the withdrawal of business campaign contributions and the active opposition of industry? The example of Senator Harris, who tried this theme last fall and went broke in his brief run for the Presidency, should tend to dissuade other hopefuls. Harris recalled the disgruntled words of a Several, he said, “can’t you stick to the dope traffic and safe subjects like that?” Harris and some ogyer politicians are convinced that the a important and that there is an emerging populist revival of concern about the power of the corporate state in America. In the first place, such events as the bankruptcy of the Penn Central, the nation’s biggest railroad, and the near collapse of Lockheed, the aerospace giant, conservative politicians alike. companies had to be rescued by govern- ment loans or guarantees; both reflected mismanagement and a secrecy that precluded early detection or public ac- countability; and one, Penn Central, was replete with managerial looting and serious breaches of responibility to ' shareholders and passengers alike. The myth that connected bigness with 'ef- ficiency and stability was severly shat- tered. Furthermore, there is a movement spreading out of the farm belt made up of against the conglomerates which are buying up huge hunks of land and swallowing the family farm in their in- tegrated agribusiness operations. Ap- proximately 2,000 farms are going out of business in this country every week. The National Farmers Organization, the fastest growing and most militant op- cry: ‘Pull together men of the soil, so that farmholders, not shareholders, reap the benefits of your toil.” Moreover, there is now a remarkably broad agreement among economists and lawyers specializing in antitrust studies that legal action must be taken to undo economic concentration... Without such action, it is feared that what is left of the benefits of competitive enterprise will go the way of the dodo. The last two Presidential Task Forces, representing liberal and conservative schools of thought, analyzed the problem for Presidents Johnson and Nixon. Both Task Forces repeatedly urged tougher en- forcement to stop the monopoly of many industries by a few firms. The Johnson Task Force went so far as to urge legislation that would divide into more competitive firms any industry in which four or fewer companies held 70 percent or more of sales. Since 1965, eleven suc- cessive reviewers in the Justice Depart- ment’s antitrust division have recom- mended legal action to break up or divest the General Motors complex into various competitive units. General Motors has been in violation of the antitrust laws for many years. According to a former Presidential assistant, Lyndon Johnson, if he had run for a full second term, was prepared to propose a deconcentration bill to the Congress. Increasing public interest in big business abuses can be seen in the growth of the consumer movement, in such best- selling popular books as America, Inc., and The Rich and The Super Rich, and in the = burgeoning resentment of many Americans over the invasion of privacy by the computers of big business firms. A 1970 survey by the Opinion Research Cor- poration found that 65 percent of the public (up from 60 percent in 1967) thinks that “in many of our largest industries, one or two companies have too much control of the industry,” while 45 percent of the public (up from 36 percent in 1967) thinks that “for the good of the country many of our largest companies ought to be broken up Last month the Federal Trade Com- mission, in its strongest antitrust move in years, filed suit against the big four ready- to-eat cereal firms who control 90 percent of the market. Senator Philip Hart, Chairman of the Senate Antitrust Sub- committee, is soon expected to submit a major deconcentration bill. For years, his subcommittee has been holding in- vestigative hearings, documenting in detail the real costs to Americans of the widespread practices of price-fixing, tying arrangements, and the freezing out of superior innovations, as well as other collusive behavior on the part of conglomerates involving ' drugs, bread, auto parts and repair, medical laboratories, and petroleum—to name only a few. Such anti-competitive en- terprise by supposedly competing businesses devalues the consumer’s in- come and the general standard of living. A secret staff report of the Federal Trade Commission estimates that “if highly concentrated industries were decon- centrated to the point where the four largest firms control 40 percent or less of percent or more.” It is on the basis of such an abundance of documentation that these Presidential candidates can afford to reopen the old political debate over monopoly and economic concentration. If they succeed, the virtues of competition — to consumers, to innovators, to small businesses en- couraged to challenge the giants — will be given more realistic attention than they have for many years under our little-used antitrust laws. TN this argument, points out that since the institution of no-fault in Puerto Rico, deaths from auto accidents have declined and the increase in the accident rate dropped from 10 to 5 per- cent. Critics of S999 contend that the bill would, in acutality, dis- criminate against the poor. They point to the likelihood that a rich accident victim is likely to get better hospital care than a poor victim and therefore be compensated at a higher rate than those who don’t, in prac- tical terms, ‘have access to better medical facilities. The Denenberg bill, they say, offers compensation for domestic help necessitated by an accident, but in actuality the poor will not be able to hire help but will rather depend upon their friends and neighbors. One of the measures in the Denenberg proposal that has come under widespread criticism ‘is the 70 percent disability clause. In an attempt to limit pain and suffering cases S999 stipulates that compensa- tion for suffering due to a partial disability can only be allowed if the disability is 70 percent or larger. As has been pointed out in ‘public hearings, this provision is open to numerous interpretations. Does 70 percent mean an injury is 70 percent of the body or does it mean the victim is 70 percent incapacitated to carry out his normal functions? Who will de- termine a 70 percent disability? These questions and others in- dicate that because of lack of definition the 70 percent clause could lead to numerous court challenges in an attempt to more clearly define the provision. Massachusetts, whose no-fault law comes closest to the Denenberg bill of those already enacted, allows no compensation for intangibles unless the disability is per- manent or medical expenses total more than $500. The object of this limitation is to eliminate nuisance claims while retaining the right to compensation in more serious cases. While Commissioner Denenberg believes that the bulk of insurance expenses can be reduced by limiting liability, critics of his proposal state that 66 percent of the insurance dollar goes to cover physical damages, mostly in the area of collison. Reflecting this theory is Senate Bill 923 introduced by Sen. Freeman Hankins (chair- man of the Senate Insurance Committee) and others. This bill is called a no-fault bill, but its first-party benefits are severely limited in comparison with $999. Among the first-party benefits are medical expenses (up to $10,000 within two years of an accident), uninsured motorist coverage, income dis- ability (no less than $50 per week and no more than $100 per week), and accidental death benefits ($10,000). The bill places no limits on compensa- tion for pain and suffering, nor does it remove or limit the possibility of a liability suit. For this reason the bill is backed by the trial lawyers, who are giving it their full support. Pro- visions for property damage are deductible in the amount of $100, with the insured being ob- ligated to pay 30 percent of the repair bill which exceeds $100. For repairs exceeding $500 up to $1,000 the insured must foot 15 percent of the bill. Beyond those already men- tioned, there are other objec- tions to the Denenberg bill, but by and large they are minor. The problem with no-fault in- surance is that each state is instituting its own unique plan and there are therefore no reliable models against which to test S999 and S923. The for- of Massachusetts, while> the latter approximates the plan adopted by Oregon; however neither are so similar or spring from such similar circum- stances that would allow legis- lators to resolve such questions as ‘Will the Denenberg bill actually reduce insurance pre- miums as is the case in Massa- chusetts?”’ Though the debate on no-fault has raised many serious points about the advantages and dis- advantages of both plans, un- deniably the driving issue has been the tort liability system and its ramifications. It is almost certainly because trial lawyers stand to lose substan- tial busines if the Denenberg plan is implemented that oppo- sition is so strong. There are, no doubt, merits on both sides and it would be unfair to consider the trial lawyers a completely self-serving organization; nevertheless, merits aside, it is ‘obvious to most observers that Dr. Denenberg would like to do away with a large portion of the trial lawyers’ business and it is this fact that makes opposition as strong as it is. This is the issue that has spurred the heated propoganda campaign Page 5 (continued from PAGE ONE) that surrounds no-fault in- surance. The trial lawyers, in an attempt to discredit Dr. Denenberg, have discovered and publicized a $16,000 settle- ment received by the commis- sioner and his wife in 1962 as a result of a fairly miror ac- cident. Dr. Denenberg con- tinues to attack laywers for ambulance chasing and per- sonal greed at the expense of the consumer. no-fault insurance rests in the hands of the Senate Insurance Committee, which will be con- ducting a’ public hearing on the matter tomorrow in Scranton. Vehicle Violations Result in Charges Atty. Michael Lewis Jr. re- presented James C. Brown and Lois Jean Brown of RD 2, Dallas, in a hearing before Dis- trict Magistrate Leonard D. Harvey Feb. 9. The charge against James Brown was that he had operated a vehicle in Lake Township on Rt. 29 while under suspension of his license. A prima facie case was found and the transcript forwarded to the Luzerne County Court of Common Pleas for grand jury action. Mrs. Brown was fined $25 plus $5 costs for permitting her hus- band to operate their 1966 Ford sedan on Jan. 18, knowing his license had been suspended. Henry Stefanowicz, Lake Township police chief, was prosecutor. TU EOE “I'd love to featuring Price includes: homes. of finishes. . Exhaust Hood. . Self-closing drawers. 10. Bread Box. 11. Cutlery Dividers. manship. MORE!
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