By Jeff Barlow, Justice Consultant, ImageSoft
Part Three: MaaS and its Effects on Insurance and Personal Injury Cases; Technologies to Predict Outcomes
In Part One of this series, we talked about the growth of Mobility as a Service and how it is fundamentally and forever changing personal transportation.
In Part Two of this series, we looked at augmented driving and self-driving vehicles and their effect on the volume of traffic violations.
To start, consider that 94 percent of all traffic accidents result from driver error. Insurance companies are aware of this fact. So are the companies moving to develop self-driving cars. Over a year ago, Volvo declared it will assume 100 percent liability for any accidents or injuries caused by one of its vehicles while operating in fully autonomous mode; the other players (car manufacturers and makers of autonomous driving systems) are following suit.
As I noted in an article awhile back,
Of course, the manufacturers will tack the liability insurance cost onto the vehicle cost, right?
Well, maybe so; but that doesn’t mean what you might think. The average vehicle lifetime cost for liability insurance is in the neighborhood of $10,000. But, the car manufacturers don’t figure it that way. Instead, they look at what they expect the assumption of liability to cost them.
In their risk analysis, the key piece of information is how much of the financial cost insured by that $10,000 per vehicle is based on driver error. The answer, according to the National Highway Traffic Safety Administration, is … 94 percent.
The manufacturers are betting that their cars can do better than that – a lot better. Six percent of $10,000 is $600. Then take out the necessity for insurance companies to sell policies, collect premiums, process claims, and provide a return to shareholders from the original $10 grand
So, the real number looks like something less than $600. Indeed, based on this type of analysis, buyers of self-driving vehicles might well expect significantly lower cost of ownership than with driver-driven cars. Basically, there will be a lot less risk and a lot fewer intermediaries.
The manufacturers are going to be the insurers; and they are betting they won’t be making big PI payouts very often. If this bet is even partly right, it will fundamentally change the insurance industry. It’s also likely to change the courts’ case mix and volume.
Computer Based/Computer Augmented Prediction of Case Outcome Approaching 100% Accuracy
If you watch any TV, you have seen the ads for IBM’s Watson. That’s just one of the manifestations of how far along the expert systems curve we are. Currently in areas as different as medicine and chess, in the ranking of successful diagnosis/prediction/performance capability, humans come in third. Computer systems (such as Watson) come in second. Yes, better than humans. In first place, though, are humans working WITH tools such as Watson.
The results of Artificial Intelligence systems to predict outcomes in the legal realm have shown predictability success rates exceeding those of experienced attorneys and/or judges. And these systems are in their infancy.
Consider the following case types, and the impact if parties (or potential parties) knew in advance that they had essentially no chance of success:
- Small Claims
- Traffic Violation
- Misdemeanor
- Felony
- Family Law
- Child Custody
- Support
- Property Division
- Personal Injury
It’s not a big stretch to foresee low- or no-cost apps that, given the correct “framing” of the case and facts, will provide all but certain predictability in many, many cases.
The key, of course, will be in the discovery. In some cases, legally trained help may be a requisite for getting the best prediction. In others, with very straightforward facts, there may be minimal need to consult a legal expert.
Once again, though, as people are able to see whether filing or defending a case have any realistic chance of success, filings would decrease and actual trials would become even more rare. Not to zero, (hope springs eternal) plus, as we know, clients routinely ignore the advice of attorneys in this regard. But in many areas, particularly involving pro-se litigants, expect filing and trial numbers to decline.
The Challenge
Go back to the “Imagine” categories and try to visualize court management, assuming these changes came to pass.
What would change in my court if ____
- Revenue from minor traffic and/or parking fines is cut 50-90 per cent?
- Filings of cases involving traffic violations drop, again by 50-90 percent?
- Filings of auto-based personal injury cases drop by 50-90 per cent?
- And of those filing, less than 20 percent go to trial?
- Parties were able to ascertain (sometimes with the assistance of lawyers, sometimes without) the estimated outcome of cases with a likelihood of 95 percent or more in three quarters of all cases, and to accordingly plead, settle, or not even file?
Then, consider that there is a very great likelihood that the LARGEST changes are not on the list. After all, twenty years ago no one had heard of the Internet, so it was not included in anyone’s predictions of the future. Just over ten years ago, no one outside of developers (and Star Trek fans) even imagined the iPhone. The term “social media” probably conjured up thoughts of People magazine. Five years ago, few people had heard of “shale oil,” and fewer still assumed that gasoline would sell for under $2.50 a gallon.
So, what’s the elephant in the room that we’re not seeing today? As The Moody Blues would say, if you know, please tell me. Whatever it is, it will make its presence felt pretty soon.
Meanwhile, imagine…