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The much anticipated Michigan Supreme Court opinion in McCormick v Carrier has been issued. I have read the entire opinion and it seems to be well reasoned; it also seems to restore some fairness to the previous unfairness established by the case it overruled, Kreiner v Fischer, which was an opinion that "misinterpreted" the Michigan legislature’s 1995 amendment to the liability threshold established in Michigan’s historic 1973 "No-Fault" law, the only one of its kind in the United States.

Here is a little history: The Michigan No-Fault Statute was passed in 1973. The law provided insured accident victims with what I consider a fair trade. They had to trade their right to sue a party who caused a minor accident and minor injuries for the right to collect out-of pocket expenses, sooner, directly from their own, 1st party carrier. Thus, the victim of a "minor" auto accident would be entitled to collect medical expenses, wage loss, and vehicle repair costs from his own insurance company. The other interesting feature is that these benefits were made available to all accident victims, regardless of whether they were the victim of someone else’s negligence or were the at-fault driver. Medical expenses under the law were and still are unlimited, for either the victim or the at-fault driver. And this is the main reason for the trade-off. If insurance companies were required to pay unlimited medical benefits, they needed relief from having to pay liability benefits in smaller cases; as I indicated, I considered this a fair trade at the time (I have been an attorney for almost the entire history of no-fault litigation) and I still consider this a fair trade. Thus, according to the 1973 version of the law, only someone who has suffered a "serious impairment of body function", "death" or "serious disfigurement" could sue the responsible party for tort liability damages.

Because a definition of "serious impairment of body function" was not supplied by the legislature, insurance companies started denying almost every claim, spawning significant litigation. Several important decisions were issued and lawyers on both sides of Michigan Automobile practice began to gain wisdom as to what level of injury constituted a "serious impairment of body function".

Along came Governor John Engler, trial lawyer hater, insurance company suck-up. Engler took office at the right time for insurance companies and the wrong time for accident victims. He passed anti-victim legislation; appointment anti-victim judges, several of whom now serve on Michigan’s Supreme Court. In 1995, it was the Engler legislature that passed a stricter standard of "serious impairment"; it was the Engler Supreme Court that made "Kreiner" the law of the land. Kreiner took the 1995 amendment and created such an onerous standard of interpretation that almost no injury, short of death or serious disfigurement could qualify for recovery. And this standard remained until a sitting supreme court justice was defeated and replaced by a judge with a more sensible approach to victims’ rights. This is the backdrop that leads us to McCormick.

The McCormick decision restores the rights of innocent victims to recover compensation for serious injuries caused by negligent and drunk drivers, by returning to the specific legal standards that were enacted by the 1995 amendments. Remember, this is not new law, but rather a return to the no-fault threshold passed by the Michigan Legislature in 1995. The decision recognizes that Kreiner was nothing more than judge-made law that constituted a
radical departure from the specific language and overall intent of the Michigan No-Fault Act. The Act required a seriousness standard; it did not seek to prevent the vast majority of accident victims from recovery.

It has been argued that returning to an appropriate standard of proof in serious impairment cases will result in an increase in Michigan automobile accident litigation. On the contrary, it is reasonable to expect that this decision will actually reduce the number of lawsuits filed in circuit court for the reason that under the Kreiner decision, victims were forced to file lawsuits by insurance companies intent on defeating legitimate claims in court by imposing
the draconian legal standards of the Kreiner case. Hopefully, this practice will end under McCormick, and insurance companies will recognize legitimate claims and deal with innocent victims in a fair and just manner. As to the appellate courts, McCormick should dramatically decrease the amount appeals, thus returning Michigan to the stable and less litigious environment that existed prior to the Kreiner decision. Prior to Kreiner, less than 10 Court of Appeals cases per year were filed in controversy over the tort threshold; in the nine years since Kreiner, there have been over 250 appellate decisions pertaining to this single issue. Obviously, less appeals amounts to considerable tax savings.

Insurance industry spokespeople are already indicating that rates will rise because of the opinion. Shame on them! As usual, these corporate interests are lying to the detriment of the public interest. Here’s the truth:

1. Michigan auto insurance carriers have enjoyed low statutory minimum policy limits of $20,000-$40,000 for the entire time (33 years) that I have been a lawyer. The majority of citizens buy insurance coverage at the state minimum. Thus, under Kreiner, if you were catastrophically injured, you collected $20,000; if you were seriously hurt you collected nothing. Insurance companies have been laughing at (and substantially profiting from) Michigan citizens for years. Have they reduced your premiums as a result?

2. Changes in the law regarding the coordination of no-fault benefits and health insurance benefits have significantly reduced the amount of medical benefits that these carriers have had to pay. Have they reduced your premiums as a result?

3. Insurance companies employ doctors who’s job it is to evaluate injured people and provide a reason to cut-off the plaintiff’s no-fault benefits. They pay these cut-off doctors millions of dollars for defense medical examinations; the sole purpose of which is to stop the flow of needed benefits to seriously injured people. Aside from being a despicable practice that insurance companies use against their own customers, this practice saves them millions in benefit pay-outs and spawns needless litigation. Have they reduced your premiums as a result?

A return to fairness and sanity should not raise insurance premiums, unless insurance companies decide to gouge the public in response to McCormick. Like any and all of the tort reform, lawsuit abuse nonsense, this is nothing more than sour grapes, the same sour grapes that was espoused by the dissent in McCormick. Hopefully, this decision will provide hope for thousands of injured Michigan citizens who were shut out of the legal system by Kreiner. I am cautiously optimistic for the first time in a long time.

Mark Bello has thirty-three years experience as a trial lawyer and twelve years as an underwriter and situational analyst in the lawsuit funding industry. He is the owner and founder of Lawsuit Financial Corporation which helps provide cash flow solutions and consulting when necessities of life funding is needed during litigation. Bello is a Justice Pac member of the American Association for Justice, Sustaining and Justice Pac member of the Michigan Association for Justice, Business Associate of the Florida, Tennessee, and Colorado Associations for Justice, a member of the American Bar Association, the State Bar of Michigan and the Injury Board.

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