TIME: Almanac 1993/TIME Almanac 1993.iso/time/080789/08078900.011

Text File | 1992-09-23 | 5.5 KB | 105 lines

                                                                                LAW, Page 42

Showdown in "Sue City"


Lawyers race to file suits following the United DC-10 crash


    Philip Corboy doesn't need to chase ambulances. They seem
to chase him. Just one day after the July 19 crash of United
Airlines Flight 232 in Sioux City, Iowa, the white-thatched,
patrician-looking Chicago attorney was asked for legal help by
the family of one of the survivors. Within 24 hours, Corboy had
filed the first lawsuit to come out of the disaster. Since then,
he has received calls from twelve other people involved in the
crash. His fee, if he wins: as much as one-third of the damages.

    Corboy's lawsuit was the first volley in what promises to
be a high-stakes legal battle over the Iowa crash. Some
attorneys have even taken to calling the tragedy "Sue City"
because of the huge number of lawsuits that are expected to
follow. While the 185 survivors and the next of kin of the 111
who were killed are the ultimate beneficiaries, the struggle
will take place between a small cadre of plaintiffs' lawyers and
their counterparts, who represent airlines, aviation
manufacturers and their insurance companies. That kind of
tug-of-war has grown increasingly fierce over the past few
decades.

    Iowa bar officials arrived at the scene of the Sioux City
crash nearly as fast as the doctors did. They were determined
to head off a well-known postcrash problem: unscrupulous lawyers
soliciting clients on the scene in violation of ethics codes.
Representatives of the state bar set up an office at the health
center where many of the survivors had been taken for treatment.
Bar officials also placed an ad in the Sioux City Journal asking
people to call if they knew of any unethical contacts by
attorneys. None were reported.

    Other crash scenes have been more ghoulish. After 137
people died in the Aug. 2, 1985, crash of a Delta L-1011 at the
Dallas-Fort Worth airport, legions of lawyers sought business
amid the chaos, scurrying among emergency-relief workers and
hospital aides. They even tramped through the halls of Parkland
Memorial Hospital handing out name cards to the families of the
deceased. Top lawyers in the field, who get their cases mainly
through referrals, consider such tactics lowbrow. "I have utter
contempt for those who choose to get cases this way. They
deserve the bad reputation they have," says Lee Kreindler, a New
York City lawyer who won a record $7.9 million judgment in the
Delta case.

    Insurers show up just as quickly as the lawyers, seeking
through a disputed process known as claim control to keep costs
from spiraling. Associated Aviation Underwriters, one of the
major airline-liability insurance companies, has already begun
the process of talking with survivors and the families of
victims of the Sioux City crash, trying to settle their claims
quickly and dissuade them from going to court. Says Peter Magee,
executive vice president of the company: "If you buy a ticket
to get from Point A to Point B, and you don't make it there,
then the legal burden is on me to explain why. Statistics show
you're going to recover something. It isn't a question of Is
compensation fair? It's a question of how much."

    The answer, say plaintiffs' lawyers, is usually "not
enough" for those who sign up with the insurance companies.
Friendly letters urging families and survivors to take the
settlements initially offered to them -- and suggesting that
they shouldn't consult a lawyer -- are anathema to the aviation
bar. According to Gerald Sterns, a San Francisco lawyer who
specializes in air-crash litigation, "These letters can be very
dangerous for the victims if they decide later to file a
lawsuit. The insurance company's concern is damage control. What
they're doing is developing a rapport with the victims and
duping them."

    Lawyers for plaintiffs also accuse the insurers of more
dastardly deeds. Says Daniel Cathcart, a Los Angeles-based
lawyer who specializes in air disasters: "Either directly after
the accident or a little later, as soon as the insurance
companies know who the survivors are, they will dispatch a team
of investigators to find out your financial situation, whom
you're sleeping with and the status of your married life. Then
they'll use this evidence to try to intimidate and embarrass you
in court." Following the 1985 crash in Dallas, Delta was
criticized for prying into the lives of passengers during
litigation. After investigators found that one victim was
homosexual, insurance lawyers raised the issue of whether his
life expectancy would have been cut short because of AIDS.

    Plaintiffs' lawyers have a strong financial incentive to
keep people from settling without representation, since it is
virtually certain in crash cases that damages will be paid. But
a study last year by the Rand Corp. found that litigation often
does not yield the jackpots that the public imagines. Rand found
that airlines and other defendants paid victims' families less
than half their average "economic loss," the value of what the
deceased would have earned in a normal lifetime. Jury verdicts
averaged $599,000 per victim. Still, the odds are good enough
and the stakes high enough to ensure that lawyers will continue
to litigate these cases avidly. As insurer Magee puts it, "This
whole business has come to take on a lottery mentality. If
someone gets hurt this week, then they rush to court to see what
numbers come up."