The CBS 60 Minutes documentary, The Storm After The Storm, called insurance company lawyers, "Dogs on a Leash." It raised the question whether insurers should be held accountable for acquiescing to unethical and wrongful misconduct by their own lawyers. Lawsuits naming insurance company lawyers and law firms for their complicity with aiding wrongful underpayments to their clients will undoubtedly be one of the consequences of Superstorm Sandy litigation.

Altered expert reports may have been shocking to many. To those of us in the insurance claims business, the problem of biased and outcome oriented experts and engineering firms providing reports and opinions of loss which reduce the amounts policyholders are fairly entitled is a recurrent and serious problem. These bought-for experts sell themselves to maintain and obtain extraordinary amounts of revenue from insurers. The owners of these firms often make multi-millions of dollars following catastrophes. Insurers keep lists of "approved" experts. Some honest experts complain that an honest opinion costing an insurer significant money leads to them being de-listed.

Another significant problem concerns some insurance company lawyers routinely hiding documents and evidence of wrongful claims practices. Their conscious avoidance by shutting their eyes or even ratifying the wrongful and fraudulent behavior is unethical. Sadly, the practice seems to becoming more commonplace as some attorneys participate in the adjustment and pre-litigation activities and then do everything in their power to evade the truth and disclosure of incriminating documents. Some insurer clients hide behind the attorney-client privilege and work product protections as excuses to prevent disclosure of wrongful conduct.

One technique used by "Dogs on a Leash" attorneys was exposed by CBS. They attack the policyholder who complains of insurer misconduct. The insurer acting in bad faith has its attorneys threaten and harass the innocent policyholder—usually with allegations of failing to cooperate and technical defenses to coverage.

In the Superstorm Sandy claims saga, I have to credit colorful Louisiana lawyer John Houghtaling for standing up to the barrage of allegations by the WYO attorneys. Not only did flood WYO attorneys threaten and harass John’s clients who were complaining of the altered reports, they tried to disqualify John Houghtaling from representing his clients. John candidly told me he was the "punching bag" for the WYO attorneys, but he never wavered in his conviction that his clients were being subjected to a systematic scheme of fraud by many participating in the WYO program, including the WYO lawyers now terminated by most of the WYO carriers.

Those of us doing this work for a living know that "Dogs on a Leash" tactics are not limited to the claims of Superstorm Sandy. The insurance industry must reign in these practitioners or be held accountable for the consequences of their own "conscious avoidance" of what these lawyers do to the insurers’ customers.

Judges and the legal profession should take note of stonewalling discovery and evidence evasion commonplace by insurance lawyers in civil litigation. If it were a criminal matter, those doing these activities would be subject to obstruction of justice charges. In the civil arena, the sanction is usually money, and insurers have more of that than God.

There is more to this story and more lessons which I will discuss tomorrow. The news from Superstorm Sandy litigation is fast and furious.