Torts - Cases, Principles, and Institutions Fifth Edition, 2016a

Witt & Tani, TCPI 4. Negligence Standard
play claims agents and defense lawyers can look less like tort law in the courts than like the public
bureaucratic systems that administer accident claims in programs like workers’ compensation.
Such private claims settlement systems emerged by the 1950s and 1960s:
The development and increased coordination of repeat-play claimants’ agents, of
course, promoted considerable anguish among certain sectors of the defense bar.
Yet as some defense-side agents noted, the presence of bargaining agents who knew
the short-cuts, the heuristics, and the rules-of-thumb often made the settlement
process considerably more efficient. In Chicago, for example, insurers found that
for precisely these reasons, the repeat-play plaintiffs’-lawyer specialist was “an
easier man to deal with than a general practitioner.” Insurers dealing with such
lawyers reported that they were regularly able to strike “package-deals” in which
they disposed of “a great many cases at one time.” Indeed, together the plaintiffs’
bargaining agent and the liability insurer’s claims adjuster were, as the vicepresident
of one early casualty insurance organization put it, the “lubricant” that
made the law of torts “run with as little friction as possible. . . .” [B]y the mid-
1960s, automobile accident tort claims were being settled with much greater speed
than other personal injury tort claims.
John Fabian Witt & Samuel Issacharoff, The Inevitability of Aggregated Settlement: An
Institutional Account of American Tort Law, 57 VAND. L. REV. 1571, 1614 (2004).
One example of such repeat-play plaintiffs’-side claims agents are the so-called
“settlement mills”: high-volume personal injury practices that, as Professor Nora Engstrom
describes them, “aggressively advertise and mass produce the resolution of claims, typically with
little client interaction and without initiating lawsuits, much less taking claims to trial.” The eight
firms from around the country that Engstrom studied resolved three times the number of claims
heard by jury trials in all federal district courts in the same period. Intriguingly, in the absence of
individualized accident information or proven ability and willingness to take a claim to trial,
bargains between insurance companies and mill lawyers were informed by past settlements, rather
than past jury verdicts. Engstrom found that, by using these settlement mills, plaintiffs with very
small meritorious claims and plaintiffs with any size of unmeritorious claims fared fairly well,
with far lower costs than further litigation would have imposed. However, plaintiffs with
especially meritorious claims or serious injuries fared relatively poorly when they hired a
settlement mill lawyer. Thus insurance companies may be cooperating with settlement mills
because they “share two sets of overlapping interests: speed and certainty. Insurers, it appears,
cooperate with settlement mills, even in marginal cases, because cooperation is profitable.” Nora
Engstrom, Run-of-the-Mill Justice, 22 G. J. LEGAL ETHICS 1485, 1486, 1491 (2009).
Theoretically, the past settlements that such lawyers rely upon to produce new settlements
were once informed by a jury verdict in a related negligence case. Is that a satisfactory
relationship to the negligence standard and the formal tort system? If not, what would you do to
influence or change the settlement mill system? Does the merit or seriousness of a plaintiff’s
claim change your judgment? Is the existence of the settlement mill a good or a bad thing for the
plaintiff who wants her day in court?
Interestingly, Engstrom’s paper was published in a journal of legal ethics. Why do you
think that is? What kinds of ethical problems arise from the settlement mill system?
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