Proposed and approved settlements from the so-called “Colossus” class action could cost defendants more than $290 million. In the complaint on behalf of car accident victims with uninsured motorist claims, the plaintiffs alleged that a large number of insurance companies have used or currently use Computer Science’s software program Colossus to engage in conspiracies to systematically undervalue bodily injury claim settlements.
Plaintiffs’ attorneys describe the software as a cost containment tool used to enhance the insurance company profits at the expense of first party insured. The suit claims that the car insurance companies engaged in civil conspiracy, breach of contract, breach of the covenant of good faith and fair dealing, unjust enrichment, and fraud.
The infamous Colossus was used by the Government Insurance Office of Australia, and later licensed in the United States around 1990. The Colossus program is currently licensed to more than 20 insurers. Those that have used it have experienced a litany of claims of foul play and unfair claims evaluation. The class action original complaint was filed against Computer Sciences Corporation and has reached a point that some of the defendant insurers have decided to cut their costs by settling the claim.
While this litigation may have some benefit, it is likely that insurers will simply find another means of depriving car accident victims, like other injury victims, of fair compensation. It is unfortunate that hard-working people, who simply want to be treated fairly, may suffer low ball offers from their own insurance company. The insurance companies describe settlement as a means of avoiding rising litigation costs. The total of over $293 million proposed and approved settlements for only a small percentage of the insurance companies appear to justify their claim. Litigation can be a long and expensive process.
