Louisville Law Examiner -
Serving the University of Louisville School of Law Community
Volume 12, Number 2 Louisville, Kentucky - November, 1986 Circulation 5,400
Kentucky confronts the 'Insurance Crisis': Who is responsible?
Barton D. Darrell
Photo by Todd Bolus
Barton D. Darrell is a third-year Jaw
student at the University of Louisville
School of Law. He is a clerk for Charles
S. Wible, who is an appointed member
of the Kentucky Legislative Research
Commission Task Force on Insurance.
by Barton D. Darrell
Kentucky, like many other states, is
evaluating the problem of the unavail­ability
and unaffordability of liability
insurance - more commonly known as
the "insurance crisis." This past
summer, the Kentucky General
Assembly formed a task force for the
purpose of studying the problem of
skyrocketing insurance premiums, and
then possibily proposing legislation to
remedy it. The task force is composed
Keith Kamenish
Photo by Todd Bolus
by Keith Kamenish
Judge: Commonwealth v. Doe.
Mr. Kamenish: Keith Kamenish for
the Commonwealth.
Defense Counsel: Steve Peters for Mr.
Doe.
Judge: Is it Mr. Doe's desire to make
a plea at this time?
of 26 members, including three
attorneys, eight members of the
insurance industry, and representatives
of several government, business and
professional associations.
Few state problems are more impor­tant
than the recent dramatic escalation
of insurance premiums.
The questions that arise in analyzing
the current insurance situation are two­fold:
1) Who is experiencing an
"insurance crisis"?; and 2) Who is to
blame for creating the insurance crisis?
Clearly, government and business are
bearing the brunt of the escalating
insurance premiums and are certainly
experiencing an "insurance crisis."
Governments and businesses in
Kentucky and throughout the nation
have been forced to terminate services
and refrain from certain activities
because liability insurance has either
become unaffordable or totally
unavailable.
The insurance industry claims it is
suffering from the "crisis." This claim,
however, is not validated by facts
regarding profits in the industry. Despite
its claim that it is in a desperate finan­cial
situation, the insurance industry
shows a healthy profit.
Officers from the General Accounting
Office, testifying before a House Ways
and Means oversight and investigations
subcommittee, reported that the finan­cial
outlook for the insurance industry
was quite promising. John Finch, a
senior associate director at the GAO,
testified that, "Available financial infor­mation
for a recent ten-year period
indicates that the profitability of the
property-casualty industry has been
cyclical in nature. The data further
indicates that, over this period, the
industry has been generally profitable."
Finch further testified that the property­casualty
industry, in which the insurance
industry claims to have sustained heavy
losses, made over $70 billion during the
past ten years, and that the total
industry profits would rise at a rate of
25 percent through 1989.
During 1984 and 1985, the time in
which the insurance industry claims it
was plagued with its worst financial
condition, suffering huge losses in its
property and casualty divisions, its net
worth rose from $62.4 billion to $71
billion, according to the National
Insurance Consumer Organization.
During that same time, insurance stocks
rose 50 percent, nearly twice as much as
the Dow-Jones average.
From 1980-1985, the insurance
industry's property-casualty stocks
increased 194 percent, while general
stocks rose only 84 percent, according
to A. M. Best and Company's stock
index. Profitability has continued in the
insurance industry into 1986. In the first
half of 1986 the industry reaped profits
of approximately $6 billion, prompting
the writer of the weekly stocks column
in the April 4, 1986 edition of National
Underwriter to report: "The quarter just
ended will enter our archives as one of
the balmiest and boomiest ever for the
stock market - and for the insurance
stocks which performed even better. A
full year, at least, of average expecta­tions
has been packed into a wild and
wonderful three months.''
The question of responsibility for the
soaring insurance premiums has
promoted heated debate throughout the
country. The insurance industry launch­ed
a massive advertising campaign in an
effort to persuade the public and
lawmakers that increased insurance
costs are the result of increased litiga­tion
and higher jury awards. The
Association of Trial Lawyers of
America (A TLA) has, in response, cam­paigned
to persuade the public and
lawmakers that increased litigation and
higher jury awards are not causing high
insurance costs, and that the insurance
industry itself is the cause.
The insurance industry claims that as
a result of increased litigation, a "litiga­tion
explosion," and increased jury
awards, they have sustained heavy losses
in their property and casualty divisions.
The insurance industry argues that it has
been forced to raise premiums to offset
the losses. According to the insurance
industry, the most effective way to
resolve the present "crisis" and prevent
future problems of affordability and
availability of liability insurance would
be to reform the tort system so to limit
the number and size of liability claims.
The facts and statistics in Kentucky
and throughout the nation do not sup­port
this argument, and the members of
Kentucky's task force should not permit
it to persuade them.
In a recent study of 17 states,
including Kentucky, the conclusion was
that there was no evidence to support
the claim that the country was experien-
(continued on page 4)
A day in the life of the Legal Intern
Defense Counsel: Yes, your honor.
Judge: Does the Commonwealth wish
to settle this case?
Mr. Kamenish: Yes, your honor.
*Mr. Kamenish submits plea agree­ment
to the judge.
Judge: What is the Commonwealth's
position?
Mr. Kamenish: The Commonwealth
recommends that Mr. Doe receive seven
years on each count of trafficking a
controlled substance, that the sentences
be run concurrantly and the
Commonwealth takes no stand on
probation.
Judge: Mr. Peters, have you informed
Mr. Doe of the Commonwealth's
position?
Defense Counsel: Yes, your honor.
As the dialogue continues, the judge
advised Mr. Doe of the rights he would
waive in the event he still desired to
plead guilty. Following the advisement,
Mr. Doe pleaded guilty to two counts of
trafficking a controlled substance. The
total time of the proceedings was 25
minutes.
The above event transpired on
September 24, 1986 in division 14 of the
Jefferson County Hall of Justice. The
Counsel for the Commonwealth was
me, Keith Kamenish, a third-year law
student at the University of Louisville
School of Law. As I left the courtroom
on September 24, I was very excited
because I had just completed my first
real case in court, and on top of that,
I won.
All of the events which occured on
September 24 and my participation
therein were due to the legal internship
program available at the University
School of Law. The legal internship pro­gram
is open to law students who have
completed 60 or more hours. The
program offers three options:
1. Judicial Internship- The student
sits and works with a circuit judge; he
writes opinions in real cases, and
observes many trials, both criminal and
civil.
2. Legal Aid Intern -
3. Internship with the Commonwealth
Attorney's Office- The student works
with a prosecutor for the Common­wealth;
he screens cases, talks to
witnesses and police, prepares indict­ments,
argues motions and, most
importantly, tries real cases.
I started my internship with the
Commonwealth Attorney's Office on
September 1, 1986. By September 10, I -......,.~
received my first case, referred above as
Commonwealth v. Doe. The case was
set for trial in two weeks on September
24 and needed enormous work in order
to be ready for trial. During the two
weeks, I did the following things in
preparation for trial:
1. Draft a dismissal for a previous
indictment against Doe.
2. Draft a motion for joinder of Doe
with a co-defendent.
3. Argue the motion for joinder
before the judge.
4. Interview the narcotics agent who
purchased cocaine from Doe.
5. Subpoena lab technicians, officers
involved in the chain of custody of the
cocaine, records personnel and narcotics
agents.
6. Draft my questions for each witness
incorporating into the questions each
element of the offense, trafficking a
controlled substance.
7. Prepare voir dire questions and
opening statement.
The internship with the Common-
(continued on page 5)
Page 2 Louisville Law Examiner November, 1986
Louisville Law Examiner
Thomas Ransdell
Editor-in-Chief
Paula Douglas
Ron Hines
Tom Lukins
Associate Editors
Todd Bolus
Photography Editor
David Fuller
Keith Kamenish
Douglas Moore
Karl Truman
Carol Blakely
EDI10RIAL BOARD
STAFF
Jennifer Miller
Bart Darrell
Sandy Sims
Randy Strause
Benjamin Johnson
Bill Wilson
Managing Editors
Ron Brumleve
Night Associate Editor
Sandra Carron
Brandeis Brief Editor
Kristin Dawson
Ro~mary Lane
Greg Catron
Mason Trenaman
Theresa Brown
Professor LAURENCE W. KNOWLES, Consultant
The Louisville Law Examiner is published six times during the academic
year in the interest of the University of Louisville School of Law community.
Articles are invited from faculty members, students, and members of the
bar who wish to do freelance work. Any proposed a.rticle should be cleared
with the Editor as to topic and length.
Address all communications to The Louisville Law Examiner, School of
Law, University of Louisville, Louisville, Kentucky 40292. Phone: (502)
588-6398.
Editorial:
----News Briefs-----
Forum needs students
The Law Forum would like to extend
an invitation to all interested students to
BECOME INVOLVED! The Law
Forum is a student organization, found­ed
in March, 1976, by law students
interested in coordinating various
existing lecture programs at the Law
School. The Law Forum's primary
purpose is to bring to the Law School,
and to the University community in
general, distinguished legal scholars,
advocates and public figures related in
some way to the legal field. To
accomplish this goal, the Law Forum
has established several speaker
programs, including the E. C. Adams
Visiting Lecturer Series, the Brandeis
Lecture Series, and the Lunch-Time
Speaker Series. If you are interested in
having a voice in contributing to your
legal education, please contact Kristin
Dawson or Jan Firkins, or leave a
message on the board outside our office
in Room 085.
JFL 25th Anniversary
The 1986-87 academic year marks the
25th anniversary of the publication of
the Journal of Family Law.
The Journal of Family Law will
commemorate this event by hosting a
25th Anniversary Weekend on
November 14-15. All past members of
the Journal of Family Law, faculty of
the School of Law, and other special
guests are invited to participate in the
weekend celebration.
The celebration will begin on Friday
with a reception at the School of Law.
This will be followed by dinner at the
Brown Hotel and an evening of
festivities hosted by Norvie Lay, Editor­In-
Chief of Volume Three.
The festivities continue on Saturday,
November 15, when the participants will
be invited to attend a Louisville football
game against the University of West
Virginia. Before the game there will be
a Tailgate Party in the University of
Louisville Room at the Fairgrounds.
Volleyball team
undefeated
by David Fuller
Participation remains high for the
various Law School intramural sports
teams. Unfortunately, the same cannot
be said for the standings of most of our
teams.
The co-ed volleyball "A" team has
the best record of all of the Law School
teams. They are 2-0. The co-ed
volleyball "B" team has an even record,
1-l. Their loss came as a result of a
mutual forfeit.
Perhaps the school's worst team is the
men's softball team. I play on that team,
so I know. We deserve our 1-3 record. ·
Since there is a post-season tournament,
we still have a chance to redeem
ourselves.
Two teams have been entered from
the Law School to play in the men's
basketball tournament, the Great
Intramural Shoot-Out, scheduled for
October 11. The regular season basket­ball
leagues begin play in November.
Could Law School do more to pro~note trial skills?
One of the most frequent complaints
voiced about legal education is its
emphasis on theory at the expense of
"real world" skills. That's why it's
gratifying to see the increased demand
for programs such as the Mock Trial
teams. These programs give students a
chance to apply the concepts taught in
the classroom under the guidance of
some of the best trial lawyers in
Louisville. It also gives the University of
Louisville law professors a chance to
convey knowledge in a setting other than
• the traditional classroom.
For instance, all students are required
to take Civil Procedure and most take
Evidence. Many find these classes too
filled with confusing concepts and
hairline distinctions. Experiences such as
Mock Trial, Moot Trial and the Intern­ship
program give a student a better
understanding of these courses and
greater confidence when that first
appearance in a genuine courtroom
occurs.
Not only has the demand increased,
but so has the selection. Students may
now choose from a variety of classes and
students/mountainmen prepare to scale the peaks surrounding Red River
Gorge. Pboto by Todd Bolus
competitions. For those who prefer a
seminar-type setting, the offerings
include Franklin and King's Courtroom
Law and Technique and Kirven,
Oldfather and Leibson's Trial Practice.
Those who prefer a more competitive
environment may participate in the
National Mock Trial, under the direc­tion
of Professor Renardo Hicks, or the
more specialized Wagner Moot Trial
competition. Finally, the Student Trial
Lawyers Association (STLA), spon­sored
by Professor Russell Weaver,
features audio· and video cassettes on
various aspects of trial techniques.
A problem with several of these pro­grams
has been funding. Last year, the
National Mock Trial Team was able to
attend the competition in Detroit only
Book Review:
through the last-minute efforts of local
attorney Henry Blankenship.
The funding crunch has also affected
the accessibility of the STLA's cassette
library. Currently, if a student wants to
view a cassette, he must request a VCR
machine 48 hours in advance. Even then
there is no guarantee of obtaining one.
A better arrangement would be to place
a machine on reserve in the library.
Traditional legal training should not
be displaced by cassettes. But the pro­grams
offered at the University of
Louisville add another dimension to
such training. There is no easy answer
to the funding question, but hopefully
better and more stable sources may be
found. This would allow even more
students to participate.
'Anatoiny Of A Jury'
by Randy Strause
Seymour Wishman, the author of
Anatomy Of A Jury, has tried to
portray to the reader the function of the
jury in our criminal justice system.
Wishman does this by narrating an
actual murder case from commission of
the crime through the trial verdict. The
book is easy to read and does not require
the reader to have a Black's Law
Dictionary close ~t hand to understand
any legalistic rhetoric.
The suspect, Leandor Rafshoon, is a
young black body guard, married with
two children. He is accused of the rape
and stabbing death of his employer's
wife. His employer is a doctor who owns
a large estate in a suburb of Newark,
New Jersey. Rafshoon, the accused, is
represented at trial by the public
defender, Michael Bernstein. The
prosecutor is an ole Irishman named
Leslie Ryan. After the introductions, the
lawyers do not play as significant a role
as do the members of the jury.
Wishman concentrates a major
portion of the book on the process of
selecting the jury and this is where things
become interesting. In the jury selection,
the two lawyers screen potential jurors
by asking them a number of questions.
(continued on page 3)
November, 1986 Louisville Law Examiner Page~
~
Book Review
(continued from page 2)
Depending on the answers, a lawyer may
dismiss a juror by supplying a reason
satisfactory to the judge why that juror
may not be impartial or by using one of
his preemptory challenges. The
members of the jury in the case range
from a black social worker to a blonde
yuppie advertising executive. What
Wishman is trying to develop in the
book is less the question of guilt or
innocence of the accused than whether
the jurors can identify with the accused
as being their type of person.
Journal will publish annual
survey of Family Law
There are a few shortcomings in the
narrative which includes the lack of
background information the reader has
of Rafshoon, the accused. While on the
other side of the coin, we learn too much
about the victim and her family secrets,
which are brought out in the trial.
Wishman however never strays far from
the jury during the last half of the book,
from the selection of members to the
final verdict, which by the way, is not
guilty.
by Paula DeMuth Douglass
The Journal of Family Law will enjoy
the distinction of publishing the Annual·
Survey of the International Society on
Family Law. "It is a reputable piece of
work and the Journal is very lucky to
have it," relates Editor Cindee Coffee.
Publication will begin on November 15,
with the Journal's first issue of this year,
and will continue for three years.
The countries united in the Interna­tional
Society presently total 29, with
China, Iran, Tanzania, and the Soviet
Union among the ranks, along with the
United States and Britain. The purpose
of their association is to further the
development of family law by acting as
an informational body to countries
around the world.
Professor Michael Freeman, of
University College London, solicits,
compiles, and translates the Survey.
While in Louisville, conferring with
Cindee Coffee on the Survey's publica­tion,
he addressed "The English
Response to the Reproduction Revolu-tion."
At the masthead of the reproduc­tion
revolution is surrogate parenting.
Freeman said that surrogate parenting
was "virgin territory" in Britain until
the January, 1985 "Baby Cotton" case.
The British reacted to the celebrated case
by dubbing the surrogate mother a
"folk devil," a "visible reminder of
what we should not be" and by enacting
the Surrogacy Arrangements Act
criminalizing surrogacy.
The Act, published in March, 1985
and passed into law, unamended, in
July, 1985, is essentially the codification
of certain conclusions reached in the
"Warnock Report on Human Fertiliza­tion
and Embryology." The Warnock
Report was published in 1984 and
established the parameters of debate on
the reproduction revolution.
Rather than recognizing and
distinguishing between various motiva­tions
of involved parties, the Warnock
Report focused on surrogacy for con­venience,
that is, surrogacy for fertile
couples, which Freeman notes is the
"least meritorious case."
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As a consequence, the Warnock
Report disapproved of surrogacy as
"inconsistent with human dignity."
Member of Parliament Harry Greenway
spoke of the Act as "rightly outlawing
the hell and wickedness that exists in
America, where women are exploited
and handled in an undignified manner
for gain."
The Act prohibits recruitment of
women and has as its goal the quick
extinction of commercial agencies.
Charitable agencies are not within its
scope and the surrogate mother and the
commissioning parents are exempt from
prosecution.
Freeman suggests that another possi­ble
exclusion is total surrogacy, the Act -.::
having been written with partial
surrogacy as its ensign. Total surrogacy
involves in vitro fertilization and the
commissioning parents are the genetic
parents; partial surrogacy uses natural
intercourse or artificial insemination
and the surrogate is the genetic mother.
No mention is made in the Act of the
enforceability of contracts between the
parties, but Freeman believes it likely
that a challenge would fail as against
public policy. The case of A v. C held
such a contract to be "pernicious" and
unenforceable.
"Already the Act is not working,"
says Freeman. In a Welsh case, where,
as a requirement of her contract, the
surrogate mother was to write diary
entries on matters of her health, eating
habits, and general well being
throughout her pregnancy, the agency
arranging the surrogacy was acquitted.
The court's rationale: the surrogate
mother was paid to produce the diary,
not to produce the child.
Freeman identified four approaches
to surrogacy: status quo, laissez-faire,
criminal sanction, and regulation. Status
quo emphasizes the biological relation-ship
as determining the rights and duties
of parenthood. Laissez-faire calls on the
government to relinquish control in "'._;
favor of handling by private individuals.
Criminal sanction is chiefly what the Act
postulates. Freeman advocates regula­tion,
the establishing of standards to
govern surrogacy, including such things
as screening applicants according to
rules of eligibility.
When asked whether surrogacy is
being discussed by other members of the
International Society, Freeman said that
"questions of family law do shift
roughly in tandem" and the continen­tal
European countries are looking to
Britain and to the Warnock Report for
guidance in determining the status of
surrogacy in their countries. The issue
is not yet being discussed in Africa or
Asia and "the current issue in Iran is
whether the marriageable age of girls
should be lowered from nine to eight
years old."
The recent developments in Britain on
surrogacy will be included in the Annual
Survey of the International Society on
Family Law to be published by the
Journal of Family Law in its first issue
of this year.
Page 4 · Louisville Law Examiner
Insurance Crisis: Fact Or Fiction
(continued from page 1)
cing any significant increase in litigation.
More specifically in Kentucky, about
which the state's task force should be
most concerned, the total filings for the
years 1981-1985 do not indicate even a
hint of a "litigation explosion."
1981 ....... . ...... . 20,753
1982 . . ...... . ...... 21,600
1983 . .. ......... . .. 18,967
1984 ... . ........... 19,623
1985 .... . . .. ... . ... 21,799
The National Center for State Courts
studied tort claims filed in Kentucky
courts for the year 1978-1984. The
Center reported that during that time
period the three percent increase in tort
cases filed compared exactly to a three
percent increase in Kentucky's popula­tion.
Based on these facts, the insurance
industry's contention that the country is
~ experiencing massive increases in litiga­tion
is inaccurate.
The insurance industry's argument
that excessive jury awards have con­tributed
to the increase in insurance
costs also appears to have little, if any,
substantiation. Jury Verdict Research,
a firm that keeps track of initial jury
awards before they are reduced or
settled after trial, and the Consumer
Federation of America both reported
that between 1978 and 1984 jury awards
in both medical malpractice and pro­ducts
liability have merely increased at
about the same rate as inflation and
medical costs. In regard to punitive
damages, which the insurance industry
claims are routinely awarded and should
be abolished, research of jurisdiction
performed by S. Daniels and reported
in his paper, "Punitive Damages: Storm
On The Horizon?" showed that of the
36 percent of medical malpractice cases
in which the plaintiff was awarded
damages, only two percent received
punitive damages, and of the 43 percent
of the product liability cases in which the
plaintiff was awarded damges less than
three percent were awarded punitive
damages in addition.
Tort reform has
not reduced rates
In practice, the insurance industry's
argument that radical tort reform,
including caps on jury awards, and the
elimination of joint and several liabil­ity
and punitive damges, will reduce
insurance cost has proven incorrect. In
states that have instituted such tort
reform legislation, insurance costs have
not only failed to decrease, but have
continued to increase. Examples are
Kansas and Iowa, states which enacted
legislation restricting jury awards and
eliminating joint and several liability.
Despite these measures, both states are
experiencing record hikes in liability
insurance premiums. In California,
where liability insurance can be found,
is at a rate 600 percent higher than one
year ago and for less coverage. In
Maryland, a bill was passed in an effort
to reduce insurance premiums, which
limited awards for "pain and suffering"
to $350,000 in personal injury cases.
Medical Mutual, Maryland's largest
medical malpractice underwriter, never­theless
requested a 50 percent increase
in premiums immediately after the
legislation was passed.
The insurance industry responds to
cases such as these by stating that they
do not establish insurance rates in
Kansas or Kentucky based on actual
past claims in Kansas or Kentucky, but
on nationwide factors like inflation and
claims in other states.
Rate increases
should reflect
circumstances
Charles S. Wible, an Owensboro,
Kentucky attorney, former Kentucky
state representative (1970-1977), and
appointed member to the task force
studying Kentucky's insurance situation,
stated in a recent interview that he
hoped that the task force would center
on this issu~ in its investigation. "We
need to be taking strictly a Kentucky
look at the problem," Wible said. "We
don't need to be concerned with what's
happening in California or New York."
Wible pointed out that one of the causes
of large increases in insurance premiums
is the insurance companies "theoretical
projections" of losses based on national
claim statistics which do not necessarily
reflect the situation in Kentucky.
As an example, Wible cited the city
of Owensboro's current situation. When
Owensboro's insurance expired on June
30, 1986, the city contacted numerous
insurance companies in search of new
coverage. Unlike many similarly situated
cities, Owensboro was able to find
insurance coverage. The rate, however,
was $312,000 for one year for only half
of the city's previous coverage of $1
million. Consequently, the city opted to
self-insure. Between 1976 and 1985 the
city of Owensboro paid approximately
$500,000 in insurance premiums. Dur­ing
that same period, there had been
only $17,000 paid in claims, of which
only $10,000 was paid by its insurance
carrier. Nothing occurred in Owensboro
to warrant its sudden transformation
into a high risk entity.
A similar situation exists in regard to
increasing medical malpractice rates. In
speaking to Kentucky's task force on
September 17, 1986, Robert L. Habush,
President of the American Trial
Lawyers Association, stated that one
percent of the doctors are causing 25
percent of the medical malpractice
claims, yet all medical malpractice rates
are rapidly increasing.
In Florida, where malpractice rates
are among the highest in the country,
three percent of the state's doctors
accounted for 48 percent of the money
paid to malpractice victims from
1975-1984.
In the state of Washington, insurance
companies repeatedly blamed the courts
for liberalizing personal injury awards,
thus causing increases in insurance costs.
Washington passed tort reform legisla­tion
in response to the insurance
industry's complaints. The changes in
the tort law were "sold" as a method
by which the public could achieve
generally lower rates and increased
availability of insurance. These results
have not occurred. Auto liability rates
were expected to increase 7-12 percent;
homeowner rates increased 5-l 0 percent;
and commercial liability rates were to be
increased 15-20 percent. All-State
insurance company stated that proposed
rates would not be measurably affected
by the tort reform legislation. Jan
Angoff, counsel for the National
Insurance Consumer Organization,
stated in an interview with The Seattle
Times, "You don't have to be a genius
to know that if there's no requirement
to roll back rates, they won't."
Tort reform legislation is not a
remedy for high insurance premiums.
Without a mandatory roll back of in­surance
premiums, cost reductions of in­surance
will not result. But consider
Florida, where insurance companies
fought for, and won, tort reform and
the state attached to the legislation a
mandatory roll back of premiums. In
reaction, eight companies suspended
writing new commercial insurance
policies in Florida before the governor
even signed the legislation.
Insurance practices
have diminished
profits
As Consumer Reports August, 1986
edition noted that through its advertis­ing
the insurance industry is blaming the
"crisis" on lawyers, juries, or victims
whose alleged carelessness brought
about their own problems. The
Insurance Information Institute, an
insurance industry trade group, criticizes
lawyers for using the civil justice system
"to right every imagined wrong." Task
forces and advisory commissions in
Washington and New York, as reported
in Consumer Reports, concluded that
the crisis "is mostly a result of poor
management practices by the [insurance]
companies." .
These poor management practices are
best understood by consideration of the
two major sources of money insurance
companies possess to cover claims and
profits. They are 1) the premium dollars
that their policyholders pay, and 2) the
interest that the companies earn on
money that is placed in tax-free reserves
and not yet needed to pay claims. In
periods where interest rates are high,
insurance companies try to attract as
many policyholders as possible to inject
as many premium dollars into the com­pany
to be invested at the high interest
rates. When interest rates exceeded 20
percent in the early 1980's, insurance
companies throughout the country
drastically reduced premiums in order to
sell as many new policies as possible to
create new investment dollars. By 1984
interest rates had fallen substantially
and insurance companies found their
profits dwindling due to the cut-rate
premiums that they had charged back in
the early 1980's. Still, however, the
industry did not sustain any actual loss.
To correct its mismanagement, the
insurance industry took two measures:
November, 1986
I) it escalated rates for all liability­insurance
buyers to levels which would
not only cover current costs, but which
would also recoup any loss of profits in
prior years, and 2) it completely
eliminated lines of business which were
designated as "high risks."
Even if insurance industry offers for
the need of tort reform were accurate,
attempts at tort reform legislation have
proved ineffective in reducing, or even
controlling, insurance costs. The better
approach in dealing with the insurance
crisis is to restructure the insurance
industry itself. The Governor's Advisory
Commission on Liability Insurance in
New York has offered several
recommendations:
1) Price Regulation- The setting of
floor and ceiling prices that insurers
could charge with the right to request
changes in the permitted price
periodically.
2) Limit Cancellations - Companies
could cancel or refuse to renew only in
specified, clearly defined circumstances,
(e.g., failure to pay premiums or fraud).
3) Increased Regulators - Additional
state regulators since the industry is
exclusively controlled by the states and
they are understaffed.
4) Appointing a consumer advocate.
5) Pooling Of Municipality Risk -
Let government bodies share risk of
liability claims.
Another possible corrective action,
and probably the most effective, would
be the repeal of the 1945 McCarran­Ferguson
Act (15 U.S.C. sec. 1011-1015)
which granted the insurance industry
broad exemption from most of tlie pro­visions
of the Sherman and Clayton
Anti-Trust Acts. These exemptions
included proscriptions against anti­competitive
practices such as price­fixing,
agreements not to compete,
monopolization, mergers of dominant
firms, tying agreements, and such other
conduct that is illegal in almost every
other industry.
The "insurance crisis" is real in
Kentucky and elsewhere for those who
cannot afford or cannot find adequate
insurance coverage. The cause of this
problem will not be remedied by limiting
or extinguishing an injured person's
right to seek compensation for his/her
loss caused by the negligence of another,
as the insurance industry would have
Kentucky's task force propose. Based
on the facts, the answer appears to be
to require a national industry to follow
rules regarding competititbn and
disclosure that other industries of
similar scope and size are required to
follow. An industry that is of such great
importance to American business and
individuals alike, should not be permit­ted
to operate in seclusion and to force
others to atone for its own managerial
miscues.
Correction
In our October issue, we referred to
the author of Specialization: An Idea
Whose Time Has Come as William J.
Haynes. The author's correct name is
WilliamS. Haynes. Also, footnote five
and footnote two of that article were
reversed.
November, 1986 Louisville Law Examiner PageS
Law School Demographics
by Kristin Dawson
As each class moves ahead to their
next year and a new freshman class
enters, a great deal of curiosity is
generated. Questions and answers re­garding
each class are banted about like
the ball in a serious game of ping pong.
Everyone knows statistics are
misleading, but just in case you are
wondering, the following are for your
information ...
The graduating class of spring 1987
began with a total number of 183 enter­ing
students. The 2 L's class numbered
227 students upon entrance and the 1 L's
162 students.
The percentage of female students
(upon entrance) is as follows:
3 L- 41 OJo, 2 L- 43%, 1 L 46%.
The number of minority students:
3 L- 5%,2 L- 17%, 1 L- 8%.
(Minority students as defined by the
Dean's Office are those who are within
the classifications of Black, Hispanic,
American Indian or Asian.)
The average undergraduate G.P.A. 1
L- 3.08. The median L.S.A.T. score:
1 L - 31.00. (The Dean's Office de­clined
to provide this information for
the other two class due to fear of
unnecssary comparison between the
three.
The summer entrance program has
been in force for two years now and the
number of students attributable to the
first and second classes are as follows:
In the summer of 1985, the Law
School accepted 45 students into the
admission program. Forty-one of those
completed the courses required and 12
of those were offered admission.
In the summer of 1986, 34 completed
the program and 13 were offered
admission.
As a result of last year's agreement
concerning the continued existence of
Kentucky's three law schools, the
Council on Higher Education mandated
that all three schools would continue to
operate, but that in-state enrollment
must be decreased. The plan is sched­uled
to be phased in over a three-year
period to have begun in fall, 1986. This
plan limits in-state enrollment at the
University of Louisville Law School to
400 students. Prior to the adoption of
this plan, the Law School was limited to
10% non-resident students. This year,
17 students out of the total 162 are non­residents.
However, the Dean has stated
previously that the Law School intends
to recruit more out-of-state students in
the future.
A day in the life •.•
(continued from page 1)
wealth Attorney offers advantages to
the third-year student. First, a third-year
student is exposed to many subjects and
procedures not emphasized in law
school. For example, Ronnie Hines just
conducted an 1142 proceeding for the
Commonwealth. Before working as an
intern, all that Ronnie knew about 1142
motions was that it was the equivalent
of Federal Habeas Corpus Action. He
knew relatively little about the
proceedings. However, after researching
the 1142 action and conducting the pro­ceeding,
Ronnie told me the following:
"In a lot of ways an 1142 action is like
a trial in that each side gives an open­ing
statement, calls witnesses, has the
right of cross examination, and presents
a closing argument.
"It differs from a criminal trial in that
the defense goes first (presents his case
first) and gives his closing argument last.
In a criminal case, the Commonwealth
presents it case first and gives its closing
statement last."
Secondly, a third-year student con­tinuously
deals with police, defense
attorneys and judges so as to develop a
sense of what is expected of him, what
to expect in court and how things really
work. For example, when Mr. Doe
pleaded guilty on September 24, I made
the Commonwealth's recommendation
conditional (on Doe's promise to testify
against another defendent. I asked the
judge to allow Mr. Doe to make a state­ment
on record so that I could impeach
him if he later changed his testimony).
As my questions began to extract details
from Doe, like where did Officer
____ park his vehicle, could Officer
____ see you buying drugs from
defendant and describe the person from
whom you bought the cocaine, the judge
stopped my questioning. He said that in
a plea proceeding he would not permit
detailed evidence to be placed on record.
He then informed me to obtain a written
statement.
Thirdly, the intern can put into
practice what he learns in law school.
Before enrolling in the legal internship,
I, like many other students, was bored
and tired of listening to professors in
class, taking notes and preparing for
class. Even while clerking, I felt a lack
of practical experience with the court
system. Now I can put things into
perspective or see the "big picture," as
we say in law school. I have discovered
that the subjects and material I learned
in school are not just rhetoric, but are
the basis of everything the lawyer does
in preparation for trial. For example, I
took Les Abramson's Criminal
Procedure II and rediscussed the case
Boydkin v. Alabama. The case holds
that an individual must be informed of
the rights he will waive before his guilty
plea can be accepted or used against him
in any subsequent trial. In
Commonwealth v. Doe, the defendant
attacked two prior convictions that I
wished to use against him at trial on
grounds that Boydkin was not complied
with. Because I was familiar with
Boydkin, I knew the basis of his claim
and took several steps to invalidate
grounds for excluding the convictions.
I supoenaed court records and the tapes
of his conviction.
Finally, the intern has the opportunity
to litigate cases and determine whether
or not he is suited for work as a trial
attorney. As I walked into court on my
first case, I was extremely nervous and
apprehensive of the defense attorney
and judge. However, once the pro­ceeding
got started, I established a
Marlin M. Volz Photo by Todd Bolus
Student-funded scholarship
reaches fruition
by Karl Truman
School pride was alive and well when
24 University of Louisville law students
pledged $1 ,000 each to fund the Marlin
M. Volz Scholarship.
The idea for the Volz Scholarship
started in 1978 with three students:
Kenneth W. Golliher and Robert
Russell, who are 1979 graduates, and J.
Scott Preston, who is a 1978 graduate.
For his motivation, the January 30, 1979
Law Examiner quoted Russell as saying,
"The University of Louisville has had
its hard knocks ... and a lot of people
do nothing but complain, they don't do
this and they don't do that. I'll be an
alumnus next year and I want to do
something to help the school. This is
something I can do right now.''
The scholarship came at a time new
funds were sorely needed. Shortly
before then, an ABA inspection of the
Law School had reported that the school
failed to meet ABA standards. One
problem was that the accreditation team
felt the School of Law lacked adequate
resources for student financial aid.
Income from the fund is dispersed in
the form of full in-state tuition
scholarships.
The first recipient, in the spring of
1986, was Donna Jenkins, who is
presently a third-year day student. This
year, the award went to Larry Moscoe,
a fourth-year night student. Selection of
the recipients is based solely on
academic achievement and are chosen
from the junior and senior classes in
equal numbers by the scholarship
committee.
Pledges made by the original 24 law
students were to be paid in installments
into the fund during the period between
May 1, 1979 and May 1, 1985. They
were able to pay the installments in any
manner they desired.
Russell stated that the fund was
named after Marlin M. Volz because of
his service to the Law School and his
popularity among students and the
community.
"The mutual confidence on which all else depends can be maintained only
by an open mind and a brave reliance on free discussion."
- Learned Hand
Let us know your point of view.
Letters to the editors should be typed and signed. The editors reserve the
right to edit letters for space considerations and for clarity.
rapport with the judge and defense
attorney. The whole proceeding became
fun as I represented the Commonwealth
to the best of my ability. On leaving the
courtroom, I was filled with a sense of
purpose and pride. I knew then that I
was cut out to be a trial lawyer.
The legal internship program at the
University of Louisville School of Law
is a must for any student who wishes to
become a trial attorney. The program
offers practical experience and a chance
to broaden and use the knowledge
attained in school. Students who are
taking or have taken the internship
program all agree that it helps them
place things in proper perspective and
really understand the profession they
have entered or will soon join. The
internship program is a compliment to
the Law School, its students and legal
community.
Louisville Law Examiner November, 1986
~". ·.'1 1. .
J
Kentucky Bar Results
by Todd Seaver
The 1986 Kentucky Bar results are in!
Out of the three state schools, the
University of Louisville's pass rate was
in the middle with 85o/o of its students
passing. The University of Kentucky
had the highest percentage at 88% with
Chase Law School ranking third with
70%. Out-of-state graduates averaged
67%.
University of Louisville Dean Barbara
Lewis was pleased with the results, but
concerned with those who failed. "As
always, we are concerned with the
individuals who did not pass." She
believes varying outside factors entered
into each individual case. As a result,
Lewis feels the strong emphasis placed
on pass percentages as an indicator of
a school's quality may be misplaced.
JULY, 1986 KENTUCKY BAR STATISTICS
OVERALL
83%
UNIVERSITY OF LOUISVILLE
84%
UNIVERSITY OF KENTUCKY
85%
CHASE
81%
OUT-OF-STATE SCHOOLS
77%
Number taking
Number passing
Number taking
Number passing
Number taking
Number passing
Number taking
Number passing
Number taking
Number passing
315
260
105
89
101
85
47
39
62
47
FEBRUARY, 1986 KENTUCKY BAR STATISTICS
OVERALL
70%
UNIVERSITY OF LOUISVILE
75%
UNIVERSITY OF KENTUCKY
70%
OUT-OF-STATE SCHOOLS
66%
Number taking 112
Number passing 79
Number taking
Number passing
Number taking
Number passing
Number taking
Number passing
28
21
24
17
33
22
First-timers taking the Bar Exam from the University of Louisville
(13 of 16 passed for a percentage of 81)
Second-timers taking the Bar Exam from the University of Louisville
(8 of 11 passed for a percentage of 73)
Fifth-timers taking the Bar Exam from the University of Louisville
(0 of 1 passed for a percentage of 0)
JULY, 1985 KENTUCKY BAR STATISTICS
OVERALL
81%
UNIVERSITY OF LOUISVILLE
85%
UNIVERSITY OF KENTUCKY
88%
CHASE
70%
OUT-OF-STATE SCHOOLS
67%
Number taking
Number passing
Number taking
Number passing
Number taking
Number passing
Number taking
Number passing
Number taking
Number passing
347
282
110
93
127
113
61
43
49
33)
First-timers taking the Bar Exam from the University of Louisville
(93 of 107 passed for a percentage of 87)
Second-timers taking the Bar Exam from the University of Louisville .
(0 of 1 passed for a percentage of 0)
Third-timers taking the Bar Exam from the University of Louisville
(0 of 2 passed for a percentage of 0)
CAREER NIGHT - Thanks to the individuals who took time to share their ex­perience
with the students. Photos by Todd Bolus
FEBRUARY, 1985 KENTUCKY BAR EXAM STATISTICS
OVERALL Number taking 96
77% Number passing 74
UNIVERSITY OF LOUISVILLE Number taking 21
91% Number passing 19
UNIVERSITY OF KENTUCKY Number taking 22
64% Number passing 14
CHASE Number taking 18
78% Number passing 14
OUT -OF -STATE SCHOOLS Number taking 35
78% Number passing 27
First-timers taking the Bar Exam from the University of Louisville
(9 of 9 passed for a percentage of 100)
Second-timers taking the Bar Exam from the University of Louisville
(6 of 6 passed for a percentage of 100)
Third-timers taking the Bar Exam from the University of Louisville
(1 of 1 passed for a percentage of 100)
Fourth-timers taking the Bar Exam from the University of Louisville
(2 of 4 passed for a percentage of 50)
Seventh-timer taking the Bar Exam from the University of Louisville
(1 of 1 passed for a percentage of 100)
November, 1986 Louisville Law Examiner Page 7
Authors write Jurisprudence Of Kentucky
by Rosemary Ferris Lane
Kentucky joins five other states with
publication of its own Jurisprudence
series. Kentucky Jurisprudence, an
eight-volume set, was published this year
by The Lawyers Cooperative Publishing
Company. Each self-contained volume
addresses a specific area of Kentucky
law. Volume topics include: Civil
Procedure, Criminal Procedure,
Criminal Law, Domestic Relations,
Workers' Compensation, Contracts,
Corporations, and Evidence. Torts will
be published in the near future in a
three- or four-volume addition to the
set.
Kentucky Jurisprudence is a func­tional
tool for the practicing attorney.
Each volume is arranged in a logical
progressive order. Domestic Relations
begins with prorriise to m·arry, pro­gresses
to marriage, which is followed
by interspousal duties and relationships,
and follows the continuum to dissolu­tion
of marriage, ending with post­divorce
proceedings. Civil and Criminal
Procedure follow a rule-by-rule progres­sion.
Kentucky Jurisprudence is written
in narrative form. Substantive and
procedural information is provided on
each topic. Since some areas of
Kentucky law may be nonsequential, it
is often time-consuming for the prac­ticing
attorney not familiar with . a
particular code section to locate It.
Kentucky Jurisprudence identifes the
appropriate KRS section, provides pro­cedural
information, cites Kentucky case
law authority (noting Kentucky cases in
point) and provides the practitioner with
research annotations to American
Jurisprudence and ALR 2nd, 3rd and
4th.
William S. Haynes, local author,
wrote seven of the eight published
volumes. Mr. Haynes is a Kentuckian.
He was born and educated in Kentucky
and currently resides in Louisville. He
received his undergraduate degree from
Western Kentucky University in 1966,
spent several years in the service during
the Vietnam era, and graduated from
the University of Louisville School of
Law in 1972. Mr. Haynes has spent 12
years as a practicing attorney, ~oncen­trating
in workers' compensatiOn and
labor law. In 1982, Mr. Haynes decided
to concentrate on writing. He is the
author of two novels, which he hopes
will be published soon.
"The Jurisprudence project was
initiated in the summer of 1984. I started
writing in October of 1984 and the first
book came out in November of 1985."
Initially, plans were made to have
several writers working on volumes
simultaneously. Haynes explained, "It
was difficult to get writers to write
within time constraints for the
money ... " As a result, he decided to
write seven of the eight volumes himself.
"Writing is hard work. When I'm
writing, I work ten and twelve hour
days, weekends, [I] don't accept pho~e
calls ... but I enjoy writing. Writing IS
interesting, for me it's fun."
Mr. Haynes explains that Kentucky
Juris prudence is "directed singularly
toward practicing attorneys ... toward
the person who needs to find the answer
to a legal question quickly. [It is I
organized in a chronological exposure
manner. Contracts is a good example,
[the volume] starts with information and
ends with breach, a simple logical order
to facilitate research." Mr. Haynes
noted, "I've picked up books that
explain a subject, refer you to another
topic, to another author, to another
book ... " Kentucky Jurisprudence was
designed to "bring Kentucky case law
in harmony with statutory law, to blend
[each] together and come up with some
type of readable, workable tool. I think
I did that." Mr. Haynes will begin
writing the Tort volumes in the near
future.
Professor Ronald Eades, University
of Louisville School of Law, is the
author of the evidence volume.
Professor Eades has written several
books on Kentucky law and is a local
authority on evidence. Professor Eades,
acknowledging the fact that Kentucky
has several evidence books in circula­tion,
distinguished his evidence volume
because of cross references with the
Kentucky state rules of evidence and
Federal rules of evidence.
"I didn't want to re-do what the other
books have already done. By adding the
federal rules to it, it adds something
unique to it. It's a one volume book that
the practicing lawyer can use regardless
of where he's going [state or federal
court]." .
"The [evidence] volume is designed to
try to pinpoint specifically what the law
(continued on page 8)
The SBA is now
offering a print
of the Law
School, done by
Louisville artist
Wayne Williams.
It would make a great
addition to your office
or a great gift
to alumni!
18x24 Black & White Print
$15.00 plus $2.50 shipping and handling
Name
Address
City State
MAIL TO:
STUDENT BAR ASSOCIATION, SCHOOL OF LAW
University of Louisville
Louisville, Kentucky 40292
Zip
Number Of Prints
Amount Enclosed
Allow 6-8 Weeks
For Delivery.
Page 8 Louisville Law Examiner
New volumes of
Kentucky Jurisprudence
(continued from page 7)
is and then give enough discussion and
analysis to help find the cases and look
for other principals. Obviously, in no
one work can you cover everything, and
none of the volumes are intended to be
a digest, so every case is not cited.
Instead, what I think these are, is an
attempt to highlight the law and then
analyze it so that the practicing lawyers
and judges can get an idea what the
problems are, and then if they really
have a complex problem, they have
enough cases to help get them started on
more detailed research."
"In addition to being a concise, prac­tical
book for judges and lawyers, I
hope .it also will provide a little insight
into where we go in the future. On a
nationwide basis, the federal rules are
starting to have an impact on state rules.
The states ... are beginning to look to
the federal rules as good examples. If
they get a case that there is no other
precedent in the state on, frequently they
look to the federal rule and say 'now
here is an example of the modern prin­cipal
on this.' As Kentucky moves on
into the coming years, a good place to
look for changes in rules is going to be
the federal rules. An attempt to get both
of these together and do some cross
referencing, I think will help the local
bar, the students, and the judges to see
that this is the direction we're going to
move.''
Each volume contains a supplemen­tal
pocket part which will be updated
annually. Real Estate law, Wills,
Minerals/Mining, and other topics are
not currently included in the collection.
Mr. Donald H. Smith, President of
Professional Lecturing Services, Inc.,
and a practicing attorney in Indiana and
Kentucky surmises that this subject
matter will eventually be included in the
set. Mr. Smith was instrumental in
introducing the series to Kentucky. He
describes the set as, "The practicing
attorney's desk reference for
Kentucky.''
University of Louisville Law School
students, Sandra K. Carroll and Paul
Nell, were research assistants for the
collection.
A copy of Kentucky Jurisprudence is
located in the reserve section of the
University Qf Louisville Law School
Library. The set can be purchased by
contacting the local representative of
The Lawyer's Cooperative Publishing
Company or by direct contact with the
publisher.
Rosemary Miller talks with students during Career Night.
Louisville Law Examiner
School of Law
University of Louisville
Louisville, Kentucky 40292
-
November, 1986
Photo by Todd Bolus
Non-Profit
. Organization
U.S. POSTAGE
PAID
Permit No. 769
Louisville, KY
John M. Harlan Louis D. Brand~is ,
·~ . .
Louisville~,-·-
Law Examiner
Volume 12
Liability
Insurance
Crisis
Page 1
JFL To
Publish
Survey
Page 3
Marlin Volz
Scholarship
Awarded
Page 5
Authors
Discuss
Kentucky
Jurisprudence
Page 7
November, 1986 Number 2
Photo by Todd Bolus