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Thread: legal liability discussion

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    legal liability discussion

    http://www.repairerdrivennews.com/20...e-for-repairs/

    An interesting but non informative discussion about 'possibilities' for liability.

    Brings to mind can a DRP be an "employee" of an insurer? Are insurers the predominate contributor or causation for poor repairs?

    Is there evidence that a repairer has no real choice than go out of business, or follow the insurer's directives?

    And what would the situation be called when you either adhere or toe the line, or destroy your investment?

    Rather than fool around with whether a tech could be held accountable, why not look at the elephant in the room?

    What is an employee? Simply a person that works for some other entity. Do corporations share that designation; do corporations and company have the same rights as an individual person? Can a company be an 'employee' of another company? Or would they be a "partner"? That sure does ring a bell........
    Last edited by Roy Smalley; 04-14-2018 at 07:34 PM.
    Roy Smalley,
    Texas

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    I have been always told that an employer cannot hold an employee responsible for any losses he may cause to the employer.

    ie, Cracked windshield runs in paint or broken tools etc.

    I have also heard that if an employee follows the employers directions that are illegal, the employee is also at risk.

    In reference to,
    QUOTE
    "Is there evidence that a repairer has no real choice than go out of business, or follow the insurer's directives?

    And what would the situation be called when you either adhere or toe the line, or destroy your investment?"

    Answer,
    It would seem to me that extortion, or at the least restraint of trade would come to mind.

    The law stating the difference between an independent contractor and an employee are explained in the following address to the IRS.

    https://www.irs.gov/pub/irs-regs/sub...rstext.prn.pdf

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    Just for fun......

    In reality, an employee be it defined for IRS purpose or not, is in the "employ" of someone and that someone is in most cases, the one that signs the check. In the case of the collision repairer, they provide the production operation that in turn has two governing parameters: when, how his service is to be delivered and the price the repairer can charge. Those parameters are provided by the insurance industry that binds the majority of the collision market with an "agreement". Ostensibly they are involved on behalf of the consuming public with their advertised claim that the consumer is best served by the insurers intervention.

    One could say this is the classical case of buyer influence over a seller, as in the long studied effect of buyer market power over producers like Sears in its' day, and Wal-Mart, Amazon today that have very rigorous rules they place on suppliers, rules that allow the buyer to go to another supplier if their needs are not met. This is the basic insurers claim.

    However there are two stark differences. Insurers directly control the cost of production through the use of data and "surveys". A typical buyer is only interested in the price their supplier charges , in that they don't specifically limit the process other than demanding a certain produced unit. The only limit they place on a supplier in terms of price is just that which assumes that at some point the selling price, thru competition will reach an equilibrium where it can go no lower without sacrificing or reducing the delivery requirements. Then the market will weed out those that don't produce that "certain level of produced unit". None of this is possible in the collision market except the lowest price because there is no real competition between producers; only "competition with limits on repairers" between insurers and the entire repair market. Those that are willing to comport their business in accordance with the rules set forth by the insurer thrives at least in financial terms of their acceptance, others decline.

    The second difference between insurers and other ‘buyers”, insurers do not contract as a buyer of repairs. Insurers tie the hands of repairers with their ‘agreements’ that implies the reality of market share interruption. And they do replace the insured in the interface with the repairer, assuming all the property rights of the insured, except the signature on bottom of the repair order. Insurers in many cases pay the repairer directly, completing the façade that they are the buyer of services.

    So the collision market place reality is one in which the insurer controls the entire cost & repair process and has assumed the rights of their insured, the buyer that signs the contract.

    But the scheme as I call it, diverts all the consequences flowing from the repair process to the repairer. The liability.

    The ‘blown roof’ case brings the liability question to the front but as usual, lots of heat discussing non-issues as this one about “is a technician responsible for his repairs”? No one seems willing to tackle head on the issue of “who is really liable”? My question is, given the above that I believe is fairly accurate but still my opinion, are the constraints placed on the repair industry outside the normal course of interstate commerce? Insurers are clearly demonstrating that they do follow a national process even though again ostensibly, are governed by each state. What force is being used to control the collision industry? Is it extortion or just a free market use of buyer power? I don't think these discussions by legal experts understand the full scope of the scheme, but I remember long ago a really smart attorney told me "Roy, I ain't interested in screwing any more alligators", only he was a bit more crude. Perhaps now all are avoiding the alligators.

    In this single case, the full consequences have not been fully revealed yet but apparently a collision repairer has been destroyed assuming the judgment stands. Always a lingering question is there shared liability between the repairer and the insurer? My opinion is absolutely. But the alligator always wins.
    Roy Smalley,
    Texas

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    now Mr.Clark's story

    http://www.repairerdrivennews.com/20...lawsuit-story/


    If you don't read RDN, this one you should read thoroughly. This one IS a teaching moment.

    These cut and pasted quotes:

    Clark’s failure to follow OEM repair procedures wasn’t a conscious decision (unlike the shop in the John Eagle Collision case). Collusion Solutions was either unaware that the requirement existed or didn’t understand it, he said.

    Clark also noted that “I was not asked to do anything wrong” by an insurer.



    And this one:

    Clark said the insurer’s response was that they would pay for him to perform that work. However, it said his shop could no longer be on the DRP as the carrier never paid for those procedures, and if he asked to be compensated, it wouldn’t be competitive for the market, according to Clark.

    Now there is the case for those studied attorneys.

    To me is the most important is the one where he said 'the insurer didn't ask me to do anything wrong" but they told him he would be removed from the DRP because they, the insurer didn't pay for that.


    I hope people realize the relevance of the first part of the statement. Insurers don't have to specifically 'ask' or 'tell'; they only do that if you ask for more than is in their internet based directions for repair. Isn't that the program that all repairers must follow in order to get paid? The estimating platforms? And the reason folks don't ask for more is because it has been beaten into their heads for decades and decades and frankly, and casting no stones here against Mr. Clark, the repair industry just doesn't know any better. Do repairers understand their legal liability when contracting with a consumer; or only what the non contracting "partner" tells them?

    And then the kiss of death: we will divert business to a more compliant shop away from you and run you out of business (the later if you continue to not follow our 'guide' estimating platform'..whatever you want to call the program.

    As for the John Eagle comment. I don't know the specifics about how the decision was made or who made it. But it matters not if a decision to not do something is either conscious or unconscious when your other option is the kiss of death for you. Is what remains that the insurance industry has formed a process that is the default repairers must follow? Are repairers guilty of being manipulated? Yes we all were and are.....

    Of course there is one very simple solution that props up the entire scheme........

    These are my opinions and I think i still have the right to express them.....thanks Mr. Clark for your story. It is an important one.
    Last edited by Roy Smalley; 04-07-2018 at 09:36 AM.
    Roy Smalley,
    Texas

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    This post reminds me of a truck rollover where the engine kept running for a time while it was on its side.

    The insurance company would pay me for inspecting the engine bearings IF the bearings were damaged due to lack of oil, BUT would not pay for the inspection if the bearings were not burnt, as it would have been an unnecessary operation!

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    Clark's story illustrates why the repair shop must carefully follow all OEM repair protocol and provide the documents to prove the necessity of the procedures to the vehicle OWNER. That puts the insurance company in the position of having to explain to the customer, not the shop, why they will not pay to follow the procedures that will ensure that the vehicle is repaired thoroughly and safely. How do you think the vehicle owner will react to being told "No one else follows the procedures, so we do not and will not pay this time either." Negotiating with the insurance company instead of the vehicle owner is what has allowed insurance companies to do their dirty work out od sight of consumers.

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    I listened to a recording the other day between a shop and an "estimate review" company hired by Allstate. The shop told the reviewer, "I did not write the estimate for you or for Allstate, I wrote it for the vehicle owner. So unless you are the vehicle owner or the owner has agreed to allow me to speak with you, I have nothing to say to you, nor do I need to hear anything you have to say." The estimate review person was dumbfounded and could only say. "If you have any questions, call Allstate." The dummy missed the point; the shop had no questions, they had the answers. All shops need to conduct their business in this way.

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    Oh but were it that simple. I try to come up with some sort of analogy to explain the situation the repair industry finds itself after many decades following the insurer directions. And not just repairers. Insurance employees, legislators, courts, consumers, all for the most part believe the insurer's actions are correct, backed both by tradition and law. Like lemmings. In the charge to the sea there might be one or two that say hell no, I see the cliff and I am going to turn left. Unfortunately that feller is overwhelmed and can only go forward over the cliff.

    The direction has to be changed if ever the repairer is able to operate as a truly market competitive entity. Unfortunately, the cliff is above and behind them.....
    Roy Smalley,
    Texas

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    Quote Originally Posted by Bill View Post
    I listened to a recording the other day between a shop and an "estimate review" company hired by Allstate. The shop told the reviewer, "I did not write the estimate for you or for Allstate, I wrote it for the vehicle owner. So unless you are the vehicle owner or the owner has agreed to allow me to speak with you, I have nothing to say to you, nor do I need to hear anything you have to say." The estimate review person was dumbfounded and could only say. "If you have any questions, call Allstate." The dummy missed the point; the shop had no questions, they had the answers. All shops need to conduct their business in this way.


    Quoting Roy,
    "Oh but were it that simple."

    I have stated that to an estimate review person, asking if he had personally viewed the car and if he was licensed by the state of Ma.
    Not viewing and not licenced, I said Good by.
    It is that simple if you know the laws of your state!

    Ps, it works best if you do not accept a direction to pay.

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    Knowing the law and being able to use it doesn't change reality.
    Roy Smalley,
    Texas

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