The Hartford Settles Class-Action Lawsuit
By Matthew Sturdevant
Courant.com (Hartford, CT)
September 24, 2010
A federal judge in Bridgeport approved a $72.5 million settlement this week in a national class-action lawsuit alleging that The Hartford fraudulently kept millions in fees that should have gone to accident victims.
In the next two months, prorated checks will be sent to more than 21,000 people — including about 1,000 in Connecticut — with an average payment of $2,200, according to lawyers who argued for the plaintiffs. U.S. District Judge Janet C. Hall approved the settlement Tuesday after preliminary approval in June.
The 2005 case involves plaintiffs who were injured and eligible for either personal-injury or workers' compensation claims from The Hartford Financial Services Group. Rather than receiving lump-sum payments, they received "structured settlements," or payments over time. Annuities were used to make the payments, and the annuities were provided by the property-casualty insurer's life-insurance division, Hartford Life.
Plaintiffs' attorneys argued that The Hartford told the beneficiaries the value of a settlement without mentioning that the company was keeping at least 15 percent for fees, taxes and profit. The company disagrees.
A spokeswoman for The Hartford Financial Services Group, Pamela Hill Rekow, said, "We are confident that every claimant received the amount that was specified in the structured settlement agreements and are settling to avoid the uncertainties and costs of continued litigation."
Speaking broadly of class-action lawsuits, the tort system has many such suits that are larger than this one at any given time, said Robert P. Hartwig, president of the Insurance Information Institute, an industry think tank.
"Relative to the size of The Hartford overall, this is something that they can manage," Hartwig said, "and they're doing this in the interest, of course, of avoiding the additional costs of protracted litigation and the uncertainty that's associated with that litigation. In the world today, very often, these cases end up being settled."
Payments will vary, according to Stamford-based Silver Golub & Teitell LLP, one of several law firms representing the plaintiffs.
"We hope to begin making distributions to class members in approximately 30 to 45 days," attorney David S. Golub said in a prepared statement.
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