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Jury finds Unum committed fraud in some long term disability cases
The New York Times (10/24, B2, Walsh) reports, "A federal jury in Boston found that Unum, the nation's largest disability insurer, had committed fraud in some cases by requiring customers to apply for Social Security benefits even though it knew they were not eligible. But the verdict...contained enough ambiguity to leave both sides declaring victory in the case, filed on behalf of the Social Security Administration."
In a release, Phillips & Cohen LLP claimed that Unum "had been trying to 'enrich itself' by telling thousands of claimants that it would cut their private disability benefits in half or more if they didn't apply for Social Security disability benefits, despite customers often telling Unum they were not eligible under Social Security's stricter criteria," according to the Wall Street Journal (10/23, Kardos). In response to the Phillips & Cohen release, Unum said "the Boston jury actually sided with Unum on the majority of claims. The insurer said the two claims that were decided in favor of the plaintiff resulted in an award of less than $3,000." Unum's U.S. general counsel Chris Collins called the release "a blatant attempt...to try to influence public opinion in a situation where they were unable to claim victory in a court of law."
The AP (10/23) adds that "in 2003, whistleblower Patrick Loughren filed a lawsuit under the federal False Claims Act." For the trial, Unum "produced 1,600 claim files that the plaintiffs then narrowed down to 101 claims that they said should not have been submitted to the Social Security Administration. This number was later reduced to 61 as it was revealed that many of these claims were actually awarded Social Security disability benefits, and in other instances there was no proof that an application was ever made to the government."
The Chattanooga Times Free Press (10/24, Lazenby) notes, "Court records show the jury reviewed seven insurance claims. In four of those claims, the jury said Unum acted appropriately. Of the remaining three, the jury was unable to reach a unanimous verdict on one and ruled in favor of the plaintiff in the other two."
Interestingly, the whistleblower in the case, Patrick Loughren, is a Pennsylvania personal injury lawyer who I often correspond with on the Pennsylvania Association for Justice email listserv.
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