During discovery in a Kansas City, Missouri personal injury case, the plaintiffs requested from Allstate 12,500 pages of documents prepared consulting firm McKinsey & Co. Allstate is claiming that the documents, which allegedly detail an Allstate plan to systematically shortchange their clients by organizing a payment system that generates huge profits, are trade secrets.

Under the rules of civil procedure, trade secrets are not made available to the other side during the discovery process. However, Jackson County Judge Michael Manners, ruled that the documents are not trade secrets and ordered that Allstate turn them over.

Allstate refused.

Judge Manners subsequently instituted a $25,000 a day fine against the insurance company. This fine has been accruing (with interest) since September of 2007 and currently stands at over $2.4 million. The Missouri Supreme Court has upheld Judge Manners’ ruling.

Allstate, who is constantly arguing that personal injury lawyers are ruining the judicial system by winning large verdicts, is solely to blame for this $2.4 million bill. This case stems from Allstate’s bad faith refusal to pay claims in a car wreck in 2000. That year, the plaintiff in this case was rear-ended by a driver and severely injured.

The McKinsey documents represent the 180 degree transformation of Allstate and the rest of the insurance business, argues David Berardinelli, the author of From Good Hands to Boxing Gloves. The title of the book is taken from one of the slides in the McKinsey PowerPoint presentation.

According to Berardinelli, the documents portray the way that the business strategies that are at the heart of Allstate’s operating system include goals of paying the absolute minimum claim possible and playing hardball with anyone they insure who asks for more.

Among other things, the documents contain Allstate’s “Claim Core Process Redesign” (CCPR), which is aimed at lowering payment levels. The CCPR goes beyond the reasonable goal of eliminating fraudulent claims to the systematic denial of legitimate benefits claims.

In designing the plan, McKinsey and Allstate mainly had in mind increasing the insurance company’s bottom line. As one slide of McKinsey’s PowerPoint presentation indicates, a 25% drop in lawsuits would mean a $1.60 increase in share price.

 

If you or a loved one has been injured in an automobile accident, contact David M. Benenfeld. You need an experienced attorney to handle your case and get you the compensation you deserve.