Insurance Dispute Affects the N.F.L. Concussions Settlement
May 13, 2016
A legal battle over insurance claims may be the last thing to attract the attention of football fans still chewing over draft picks and just what Tom Brady did or didn’t do. But with an estimated $1 billion at stake, it is front and center for the N.F.L. and its insurers, and it may say a lot about the league’s paramount health issue: what it knew about the debilitating effects of repeated head hits, and when it knew it.
The dispute is tied to the settlement between the league and the thousands of retired players who said the league hid from them the dangers of repeated head hits. Players stand to receive up to $5 million each. But where exactly would that money come from?
Its insurers, the N.F.L. says. But the insurers, a group of about 30 companies, have gone to court to get out of paying.
The insurers say they do not have to cover the claims, which may reach $1 billion, because of the questions raised by the players over whether the league frequently covered up the danger of concussions. But fraud was never proved because the players settled before they went through the discovery process.
Two weeks ago, a New York State Supreme Court judge who set aside the tug-of-war until after the league completed its settlement with the players said the insurers could proceed with their case. Here is a primer on what’s next.
What’s at stake?
The insurers want to determine whether the N.F.L. committed fraud, as the retired players claim it did. If they can prove it did, the insurers believe they will not be on the hook to cover the tens of millions of dollars in claims the N.F.L. is likely to have to pay players, not to mention the legal bills the league accumulated.
How will the insurers do this?
The players settled before their case went to trial, so it was never determined whether the league committed fraud. Judge Jeffrey K. Oing told the insurers they could proceed with discovery and depose witnesses.
What are the insurers looking for?
The insurers will seek evidence that the league committed fraud, in documents and depositions. The insurers would presumably interview former league executives as well as doctors and lawyers who advised the N.F.L. on the dangers of head trauma, including those named in a New York Times article that exposed the league’s flawed research.
How long will this take?
Potentially years. The insurers are coming up with a list of documents they want to see and people they want to depose. The N.F.L. has asked the judge to delay discovery because about 150 players opted out of the settlement and can continue to sue the league. The league has also argued that because the appeals are not exhausted, the current settlement could still change.
Judge Oing was not sympathetic. “You know, I’ve been extremely patient with this case, and I’ve given you all the stays that you’ve asked for, but I think there comes a time when you need to go forward,” he told the league’s lawyers last month.
Does that mean the insurers can get whatever they want?
Not necessarily. The league will argue that certain people or documents do not exist, are not relevant or should be kept confidential. The two sides are supposed to have agreed on a list of people to depose. If they cannot agree, they are to appear in front of Judge Oing on May 20.
What are the chances we learn what the league knew about head trauma in the 1990s and beyond?
Information may leak out or be included in certain public filings. If the case proceeds to trial, information damaging to the league might be made public.
But the N.F.L. may decide to settle with the insurers before that happens, accepting less than full coverage. Some insurers may also want to settle to reduce their legal bills or because they hope to continue to sell insurance to the league and maintain a good working relationship.
“My base scenario is that they are going to settle,” said William Wilt, the president of Assured Research, which follows trends in the insurance industry. Some of the insurers “have conflicting business interests.”