After the Stamford, Conn., Superior Court handed down a $15-million verdict against The Hartford Insurance Co. this week for engaging in a pattern of business practices that violated state law, the insurer says it plans to appeal the decision.
In the class action suit originally filed by Auto Body Association of Connecticut (ABAC) shops in 2003 a jury awarded a group of body shops $15 million after finding that The Hartford artificially suppressed body shop labor rates by eliminating the use of independent appraisers and relying exclusively on its own automobile service representatives to perform appraisals so the company could control their content, including labor rates.
“We are disappointed with the verdict as it relates to labor rates for auto body repair, and we will ask the court to overturn that decision,” said Tom Hambrick, spokesperson for The Hartford.
Celebrating the court’s decision was Connecticut Attorney General Richard Blumenthal, who is known as a vocal advocate of repairers’ and consumers’ rights and has called for a federal investigation of alleged insurance company steering tactics.
"This ruling reaffirms what we already know when it comes to automobile repairs, insurance companies are unfairly dictating the prices and the places,” Blumenthal said. “By law, appraisers should be independent uninfluenced by insurance companies and their profits. A jury has agreed that The Hartford has placed undue pressure on appraisers, interfered with consumer choice on repairs and deprived consumers of independent assessments.”
However, Hambrick noted one victory for The Hartford in the case. In its decision, the court appeared to not directly address the lawsuit’s allegations that the insurer illegally steered customers to its preferred shops (per the Hartford Courant). In the lawsuit, ABAC claimed that employees of The Hartford were instructed to direct the customers to a preferred shop in the insurer’s Customer Care Repair Service Program and that consumers were often pressured to abandon their choices in favor of The Hartford’s DRP shops.
“We are pleased, however, that the jury appears to have recognized the benefits that The Hartford’s direct repair program provides to our customers and affirmed that the operation of that program complies with Connecticut law, " Hambrick said. “It is important to us that our customers have a choice and access to a program that provides great service."
Attorneys for ABAC say their next step is to ask the court for “injunctive relief” to address The Hartford’s business practices.
“This lawsuit was an attempt to change the way business is done in this industry,” said Attorney David Slossberg of Hurwitz, Sagarin, Slossberg and Knuff, of Milford, co-counsel for ABAC.
The Hartford Ordered to Pay Connecticut Repairers $15 Million