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Mangy Peasant
Social climber
Riverside, CA
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May 19, 2011 - 04:12pm PT
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I think as a matter of responsibility and good business, the better approach for REI would have been to pay Monika from its own funds, at least for her medical expenses, immediately and without question, then sue the manufacturer for reimbursement.
REI, are you paying attention?
There are thousands of small-time ambulance-chasing hucksters out there who are paying attention. They would be pretty excited to hear about a company that pays "immediately and without question" to someone that claims an injury.
In this case, the injury was legit - but the only way to know that for sure is to investigate - which requires specialized resources.
REI, and most companies, are not in the business of investigating accidents. If they tried to do it, they would do a very poor job. Insurance companies are in that business. That's a big reason why REI, and every other company, has insurance for this sort of situation.
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atchafalaya
Boulder climber
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May 19, 2011 - 04:14pm PT
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Rox, still not clear and about to head over to the Co-op for some gear. Are you saying they are not a CO-OP?
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stevep
Boulder climber
Salt Lake, UT
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May 19, 2011 - 04:20pm PT
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As was pointed out on the other thread, it is possible that REI would have wanted to settle and pay out of its own funds to take care of her.
But their contract with their liability insurer might have prevented them from doing so.
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atchafalaya
Boulder climber
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May 19, 2011 - 04:28pm PT
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Alright, to recap:
REI never "shirked responsibility", but was insured and the insurance policy most likely requires that they tender all claims to the insurer for defense.
Since it is the insurer's money, they control the defense. They choose the attorneys and they work with the attorneys/insurer throughout the case.
The insurer is advised throughout the litigation and instructs its attorneys to fight the various legal battles and appeals.
The attorneys must pursue all legitimate or possibly meritorious arguments, or they may face liability in the form of a malpractice suit.
Summary: Everything is working just the way it should and it is REI's legal right to appeal an adverse ruling they disagree with.
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Gene
climber
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May 19, 2011 - 04:36pm PT
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Thanks you, Mr. Atchafalaya!
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John Moosie
climber
Beautiful California
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May 19, 2011 - 04:41pm PT
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Alright, to recap:
REI's product liability representation exists at the behest of REI, not the other way around.
In my opinion, there is something wrong with a system that doesn't allow for the insuree to take some control of the situation. Blaming the delays on the insurance industry seems a bit convenient to me.
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Gene
climber
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May 19, 2011 - 04:50pm PT
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John,
I understand what you're saying but that would be impractical since the insured would be spending the insurer’s $$$.
g
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blahblah
Gym climber
Boulder
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May 19, 2011 - 04:50pm PT
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The insurer is advised throughout the litigation and instructs its attorneys to fight the various legal battles and appeals.
No, the attorney represents the insured, not the insurance company, although the attorney and insured may be required to report to the insurance company according to the terms of the policy.
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atchafalaya
Boulder climber
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May 19, 2011 - 04:55pm PT
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Agreed, the attorney represents the insured, but it is the claims adjustor (insurer) who calls the shots during the litigation.
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graniteclimber
Trad climber
The Illuminati -- S.P.E.C.T.R.E. Division
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May 19, 2011 - 04:55pm PT
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REI never "shirked responsibility", but was insured and the insurance policy most likely requires that they tender all claims to the insurer for defense.
Since it is the insurer's money, they control the defense. They choose the attorneys and they work with the attorneys/insurer throughout the case.
The insurer is advised throughout the litigation and instructs its attorneys to fight the various legal battles and appeals.
The attorneys must pursue all legitimate or possibly meritorious arguments, or they may face liability in the form of a malpractice suit.
Summary: Everything is working just the way it should and it is REI's legal right to appeal an adverse ruling they disagree with.
Sure they are shirking responsibility. REI has more and legal responsibilities to its members. Those exist regardless of any relationship that REI may have entered into with its insurance companies. That is why REI is being sued, not the insurance company. That is why the court is saying that REI (again, not the insurance company) is responsible.
If the insurance company is involved, it is because REI chose to involve them, by entering into a contract with them to begin with, and then by having them handle this claim. If REI wished to settle directly with victim, the insurance company would not stand in their way. But REI would have to pay out of pocket.
As things stand, REI has already lost twice and will lose a third time. They have the legal right to appeal an adverse ruling, but they are going to have to pay anyway, and now when they do, the perception will be (quite correctly) that they did kicking and screaming with a gun to their head.
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blahblah
Gym climber
Boulder
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May 19, 2011 - 05:11pm PT
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I haven't read any of the underlying documents--is there really a reason to think that the insurance company is driving things, or is this just speculation?
This isn't the type of stuff I do, but it seems to me that the claim would be so slow in this case that it would be below REI's deductible (I may be wrong, no doubt). For example, I work for a large law firm--we have malpractice insurance, but it only kicks in at a VERY high deductible (I think one million, may be more, that's not my department).
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graniteclimber
Trad climber
The Illuminati -- S.P.E.C.T.R.E. Division
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May 19, 2011 - 05:19pm PT
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I haven't read any of the underlying documents--is there really a reason to think that the insurance company is driving things, or is this just speculation?
It's speculation, albeit, informed speculation.
This isn't the type of stuff I do, but it seems to me that the claim would be so slow in this case that it would be below REI's deductible (I may be wrong, no doubt). For example, I work for a large law firm--we have malpractice insurance, but it only kicks in at a VERY high deductible (I think one million, may be more, that's not my department).
When REI's general counsel meets with its outside litigation counsel, how likely are they to say, "hey, just pay it" as opposed to "hey, we have grounds for an appeal"? $600 an hour is a good reason for litigation counsel to recommend once course of action over the other.
Also, maybe they were too stupid to get high-deductible coverage.
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reddirt
climber
PNW
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Topic Author's Reply - May 19, 2011 - 05:20pm PT
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I think the original claim was rather low. Definitely not punitive, only compensatory.
Noteworthy repost from turns all yr:
What's more, one of the reasons that REI is even attempting to excuse itself from responsibility is the result of the forensic bike test that revealed a manufacturing defect in the Aprebic fork. Monika paid for the test out of her own pocket without so much as a dime in reimbursement from REI. Think about that, whoever reads this. Monika paid close to 10k out her savings to pay for a test that REI requested, and never received reimbursement. What's 10k to REI? To Monika it meant not being able to fly to Germany for her grandmother's funeral last year.
Libby stated in that mass email she sent to people who voiced concern that REI stands by its products and has been committed to its co-op values throughout its defense. Libby, if you read this, are you aware that REI refused to reimburse Monika for the cost of her bike!?
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graniteclimber
Trad climber
The Illuminati -- S.P.E.C.T.R.E. Division
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May 19, 2011 - 05:33pm PT
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She just wanted compensation for her expenses and for not being able to work full time on account of her brain injury.
This explains why they are fighting it. Paying for one-time medical costs isn't that much, but verdicts can get much more expensive when intended to cover living costs and ongoing medicial expenses for the rest of someone's life due to a brain injury.
When I read that she died in a mountaineering accident, I assumed that she had fully recovered.
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graniteclimber
Trad climber
The Illuminati -- S.P.E.C.T.R.E. Division
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May 19, 2011 - 05:35pm PT
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REI refused to reimburse Monika for the cost of her bike!?
I find that hard to believe. Did she take it to the customer service counter and try to return it? Wouldn't her lawyers want to keep it as evidence?
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Mangy Peasant
Social climber
Riverside, CA
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May 19, 2011 - 05:56pm PT
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Summary: Everything is working just the way it should and it is REI's legal right to appeal an adverse ruling they disagree with.
atchafalaya nails it.
The system is imperfect. There may be ways to improve it, and we should always strive to do so.
But there is no evidence of evil. None at all.
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malabarista
Trad climber
PA, then AZ, then CO, Now CA, soon OR
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May 19, 2011 - 06:20pm PT
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This really makes REI look bad IMO. Legal standards be damned, companies ought to have a human side as well. If they don't I'd rather not do business with them given choice. REI's conduct on this issue calls their values into question. At least they should they helped pay, better -they could have helped organize a fund raiser.
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crunch
Social climber
CO
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May 19, 2011 - 06:50pm PT
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"Summary: Everything is working just the way it should and it is REI's legal right to appeal an adverse ruling they disagree with."
That's true, but it's also my legal right to shop elsewhere, and to suggest to my friends that they do likewise.
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graniteclimber
Trad climber
The Illuminati -- S.P.E.C.T.R.E. Division
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May 19, 2011 - 06:52pm PT
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Summary: Everything is working just the way it should and it is REI's legal right to appeal an adverse ruling they disagree with.
The legal system is working as it should. REI has the right to appeal adverse rulings they disagree with. So does anyone else including Bernie Madoff, Charles Manson and the Unabomber.
The fact that they have a legal right to appeal that they exercise and the fact that the legal system is working just the way it should does not imply that what they did is right or that are good citizens.
The 2010 REI board of directors. Back row: left to right — Cheryl Scott, José Ignacio Lozano, Joanne Harrell, Brenda Davis, Anne Farrell, Charles Katz, Jr., Stephen Lockhart, Michael Smith. Front row: left to right — Jesse King, Sally Jewell, John Hamlin
REI is the nation's largest consumer cooperative with more than 4 million active members. A professional management team and staff operate REI, and a board of directors selected from REI's membership oversees the company.
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Mangy Peasant
Social climber
Riverside, CA
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May 19, 2011 - 06:58pm PT
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So anyone that files an appeal can be lumped into the same group as Bernie Madoff, Charles Manson and the Unabomber?
Hope you never get sued or accused of a crime.
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