Trial bar, insurers roll up sleeves for Ref. 67 fight

OLYMPIA — Who says an off-year election has to be boring?

With millions in campaign contributions, weeks of bruising TV ads and plenty of name-calling, trial lawyers and insurance companies are doing their best to spice up this fall's otherwise ho-hum statewide vote.

The two powerful lobbies are fighting over Referendum 67, a new law that would allow consumers to collect triple damages if their insurer unreasonably denies a claim or violates unfair practice rules. It does not apply to health benefits.

Supporters say R-67 gives consumers a powerful tool to punish bad actors in the insurance industry. Opponents say it's a magnet for unfounded lawsuits that will drive up insurance rates.

Fair enough. But along with dueling sets of studies and lists of nameplate endorsements, the R-67 race is veering toward a much lower level of political discourse.

In one corner, insurers have conjured up the jackpot-seeking stereotype of trial lawyers, asserting that failure to defeat the referendum will be a guarantee for higher insurance rates.

Trial lawyers counter with tales of callous insurance firms hanging innocent ratepayers out to dry for a few dirty dollars of extra profit.

In the end, voters may essentially be choosing which side they find to be less despicable.

Controversy over R-67 started during the last legislative session, when the bill was approved by lawmakers on mostly party-line votes.

That alone wasn't much of a surprise in Olympia, where trial lawyers often support majority Democrats and insurers often back minority Republicans.

But the bad blood it generated was notable, particularly when one House Republican suggested the bill was being railroaded by House Majority Leader Lynn Kessler, D-Hoquiam, who is married to a prominent trial lawyer.

Democratic Gov. Christine Gregoire was unable to smooth things over after the session, and eventually signed the bill into law.

Insurers immediately launched a referendum drive to get it struck down at the ballot box, easily collecting enough petition signatures. Phase two of the war had begun.

Dana Childers, spokeswoman for the Reject 67 campaign, says the law is a solution in search of a problem.

There are already ways to sue your insurance company if it's acting illegally, she says, and Insurance Commissioner Mike Kreidler also offers free consumer advocate services that bring back millions for claimants.

"It's simply not needed," Childers said. "One thing the trial lawyers haven't been able to do is talk about the crisis in Washington state."

If R-67 is allowed to stand, Childers said, consumers will eventually see higher rates as insurance companies are forced to settle more lawsuits for fear of paying inflated damage awards.

"It's a big club for the trial lawyers to force bigger and faster settlements," Childers said.

Referendum supporters don't deny the law carries force. But that's what it takes to put consumers on a level playing field with huge insurance companies, Approve 67 spokeswoman Sue Evans said.

And because R-67 only allows triple damages when an insurance company acts unfairly, firms will no longer get a competitive edge from overzealously denying claims, Evans said.

The existing types of lawsuits simply aren't enough because they don't necessarily apply to all types of insurance, Evans said.

And without the multiplier effect, supporters say some people's legitimate claims end up being too small to attract help from lawyers.

"This is about bad faith. Nobody should have to hire a trial lawyer to settle a legitimate claim, period," Evans said. "If they treated people fairly, trial lawyers would be out of a job."

Much of the early attention has focused on how much — or how little — money the campaigns are raising.

Reject 67 has reported more than $8 million in donations, from insurance companies around the country. State Farm auto insurance has contributed more than $1.6 million, with homegrown Safeco chipping in more than $1.3 million.

Their most visible use of the money has been on TV spots, featuring a fictitious law firm called "Sooem, Settle and Kashin" plotting ways to exploit the new law for big paydays.

Approve 67, meanwhile, had only raised about $887,000 as of last week, almost exclusively from attorneys.

Instead, the campaign has been focusing on getting various interest groups to mobilize their members, from AARP to labor unions.

The approve campaign also has support from Kreidler, a moderate Democrat, and from Gregoire, who recently said she'd vote for the measure and seek unspecified changes during the next Legislature.

Evans isn't convinced the campaign will even get $1 million from trial lawyers, who spent heavily during 2005's initiative fight over medical malpractice and have plenty of presidential candidates beckoning for their checks.

Childers doesn't buy it. She expects the Approve campaign to come in with plenty of dough before election day. If she's right, the nastiness and name-calling may just be getting under way.