Allstate in Missouri Personal Injury Case Ignores Court Order, Fined $25,000 a Day

In a personal injury case pending in Missouri, Allstate Insurance Co. is racking up $25,000-a-day in court fines, because it refuses to comply with a judge’s order to hand over documents, the Kansas City Star reports.
At the center of the controversy are papers prepared by consultant McKinsey & Co in the 1990s. Dubbed the McKinsey documents, they were used by the insurance company to formulate its policies, methods and claims procedures. Policyholders and the lawyers who represent them believe the documents show how the company amassed large profits at the expense of its own policyholders.
One of those policyholders sued Allstate for bad faith in Jackson County Circuit Court. He alleged that Allstate refused to pay a claim arising out of a car wreck more than seven years ago. A Jackson County Judge ordered the insurance company to produce the documents to the plaintiff, making them open records for public view. Flouting the judge’s order, Allstate has refused to comply. In mid-September, the judge fined Allstate $25,000 each day. That fine is now about $2.5 million. The insurance company’s San Diego lawyer told the judge the company would not provide the documents without a protective order sealing them off from the company.
This case is a perfect example of shortsighted policies motivated by greed. If Allstate simply paid its policyholders as they promised, there would be no need for the strategies and procedures outlined in the McKinsey documents. If Allstate had simply paid this policyholder’s claim after the accident, there would have been no need for the lawsuit and legal expenses. If Allstate had not flouted the judge’s order, it would not be facing multi-million fines. Unfortunately, the company shows no sign of abandoning its ill-advised strategies anytime soon.