by David Berardinelli based on his Trial Guides book From Good Hands to Boxing Gloves
(Originally published in 2007)
The Insurance Industry Exposed
Allstate’s attempt to suppress any public knowledge of the damning evidence of institutional bad faith contained in the McKinsey documents has failed. Although Allstate now stands in contempt of court for refusing to obey the trial court’s direct order to return or replace the McKinsey slides produced under a temporary protective order in Pincheira v. Allstate Insurance Co., I personally reviewed, studied, and summarized them in detail over a period of about two years while they were in my possession during Allstate’s unsuccessful appeal of the court’s order.
After Allstate lost the Pincheira appeal and after the temporary protective order expired, I returned the original set of McKinsey slides to Allstate, even though I was under no duty to do so, believing Allstate would live up to its agreement with the court that the slides would become public if Allstate lost its appeal. I asked Allstate to replace them with a clean copy because it had placed a “restrictive overlay” on each page of the original set. Allstate refused to provide clean copies and even refused to return the originals with the restrictive overlay. When the court ordered Allstate to produce a clean set of the documents, it again refused. The court held Allstate in contempt and entered a default judgment against it on liability for its willful disobedience of its orders
During the appeal I, as plaintiff counsel, was able to study the slides and, in preparing for trial, created an extensive summary of direct quotes to serve as a searchable database of their contents. After I wrote an article about the McKinsey slides for the New Mexico Trial Lawyers Journal, Allstate asked for a gag order to prevent me from writing about or publicly disclosing my knowledge of the slides’ contents. When Allstate alleged I lied to the trial court about returning all copies of the original slides in my possession, I filed a copy of my summary notes in response. Allstate then filed a verified petition to seal the court file, stating under oath that my notes correctly revealed the slides’ contents—which Allstate claimed were trade secrets.
The trial court denied Allstate's motions to seal the record, to prevent me from publishing articles or books about the information in the documents, and for another interim protective order. As a result, I can now publicly disseminate both my personal knowledge and summary notes about the contents of these slides. Allstate did not appeal the denial of its motions, and the summary notes are now filed as public documents in at least two cases pending in the First Judicial District Court of Santa Fe County, New Mexico. The notes are also included as an addendum to the legal version of my book From Good Hands to Boxing Gloves.
The McKinsey slides provide the only known record of how McKinsey and Allstate knowingly designed every CCPR protocol in favor of the interests of Allstate’s shareholders (and its top executive managers/shareholders) to the direct detriment of its policyholders. One can hardly imagine a better source of evidence for an institutional bad-faith claim.
It’s worth noting that McKinsey’s engagement at Allstate did not end in 1996. Other records and CCPR manuals indicate that its work on improving the insurer’s claims-handling processes continued after implementing CCPR. In his 2006 Bernstein conference presentation, Allstate CEO Ed Liddy stated that work began on the “next generation of claims systems” in 2004 and was still in progress.
It seems safe to assume that McKinsey is still playing a major role in developing this next generation of CCPR. According to statements by Allstate’s counsel in other cases where production of the McKinsey slides has been sought, over 20,000 slides have been created since 1992. And a recent affidavit from an Allstate vice president has now identified 127,574 pages of McKinsey documents. [Aff. Christine Sullivan, in Martinez v. Allstate Ins. Co., No. D-0101-CV-2004-0963 (N.M. Santa Fe Co. Dist. filed Apr. 19, 2007).]
The detailed 764 page legal version of From Good Hands to Boxing Gloves for lawyers discussing Allstate's implementation of CCPR and McKinsey & Company's involvement in creating their system of underpaying insurance claims is available only through Trial Guides to plaintiff lawyers.
The 189 page public version is available through Amazon, and with over 30 customer reviews, presently has a 4.8/5 star rating.