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Civil Rico Damage Claims

I’m David Holub, an attorney focusing on personal injury law in northwest Indiana.

Welcome to Personal Injury Primer, where we break down the law into simple terms, provide legal tips, and discuss topics related to personal injury law.

Today’s question comes from a listener who says “My auto insurance carrier got a letter from the company that insures the other driver that crashed into me saying that they didn’t think I was hurt in the crash, and now all of a sudden MY insurance company is refusing to pay under my policy the medical expenses I’ve incurred for treatment for the injuries I suffered in the crash, how can these insurance companies get away with teaming up against me?”

This is a great question. We find this kind of thing happening frequently. Not surprisingly, insurance companies talk to each other. They talk to each other a lot. Behind the scenes in most cases, insurance companies arbitrate property damage claims, and though your own company may pay for your car being totaled, it might make a claim to get reimbursed from the other driver’s insurance company if there is strong proof that the other driver is at fault. So, the two companies talk to each other. Not surprisingly, if they find that they both can save money by claiming that you are not hurt, they have an incentive to work together to do so.

That may leave you high and dry in an unfair situation.

If insurance companies work together and are honest and above board in doing so, no laws are broken. But what if they lie about a situation or conspire to commit fraud to cheat you? Well, such conduct can land them in trouble. There are many cases reported where insurance companies have cheated and lied and got hit with high jury verdicts and punitive damage awards.

Such fraudulent conduct may amount to what is under the law called racketeering. In 1970 Congress passed an act referred to as RICO, designed to deal with racketeering influenced corrupt organizations. There is both a criminal component and a civil remedy component to RICO.

The idea behind RICO was to combat organized crime. But it also applies to businesses routinely committing fraudulent conduct or an extended period of time. A RICO claim may be brought in a civil action and if you win, you get triple actual damages. The whole idea is to punish wrongdoing.

RICO requires the defendants be proven to have participated in an enterprise to carry out the directions of the enterprise. An ‘enterprise’ is defined in 18 U.S.C section 1961 (4) to include “any individual, partnership, corporation, association, or other legal entity”. It gets complicated, but in simple terms the enterprise must exist.

Then you have to prove a ‘pattern of racketeering activity’ which requires at least two acts of racketeering activity.

The element of ‘racketeering activity’ is extremely broad. The statute includes kidnapping, gambling, arson, robbery, bribery, extortion, or a list of many other criminal statutes. The more common statutes include fraud, obstruction of law enforcement, forgery, and trafficking statutes.

A defendant found guilty under a civil RICO action will be subject to recovery of damages at three times the amount of actual damages, including reasonable attorney fees. 18 U.S.C. § 1964.

I hope you found this information helpful. If you have questions about your legal rights if you get hurt due to the carelessness of another person, or as a result of substandard medical care, or due to a product defect, construction injury, or any other type of personal injury, please give us a call at (219) 736-9700. You can also learn more about us by visiting our website at www.DavidHolubLaw.com – while there make sure you request a copy of our book “Fighting for Truth”.