LawyersUSA

A new survey by a jury research firm shows that jurors are extremely critical of subprime lenders as well as insurance companies.

As we recently reported, jurors are angrier than ever at corporations.

The new survey by TrialGraphix/Kroll Ontrack in Eden Prairie, Minn. was released as litigation related to subprime lending continues to heat up. The first shareholder class action was filed in February 2007; since then, the wave of related actions has swelled to well over 300.

Here are the key results of the survey:

Lenders and borrowers

• Nine out of ten people believe that companies that issued subprime loans "took risks and abandoned lending practices."

• Nearly half of respondents disagreed with this statement: "Companies would not knowingly make loans to people who are unlikely to pay them back."

Investment companies

• Over half of those surveyed agreed or were uncertain if investment firms offered investment vehicles without thoroughly investigating the risks involved.

• 75 percent of respondents believe that investment companies downplay the risks to the public.

Subprime litigation

• 69 percent of respondents believe that borrowers misunderstood their loan terms or were misled during the loan process.

• Over half of the people surveyed believe that it's unfair for subprime lenders to receive a bailout.

Insurance companies

• Insurance companies ranked lowest in overall opinion when compared with banks, investment firms, mortgage companies and home building companies.

• 71 percent of respondents believe that insurance companies will "do anything they can to avoid paying claims to their policyholders."

• Over two-thirds of respondents believe that insurance companies wait as long as they possibly can to settle claims in hopes that the claimant will eventually accept less money.

What the results mean

The results are "not at all surprising," said Dennis Thompson, a jury consultant with Trial Lab in Dallas, who said the survey is consistent with his own observations.

Lawyers will have to be more "vigilant" in detecting these attitudes during voir dire, especially in federal court where judges conduct voir dire, he added.

Defense attorneys who are handling cases for lenders against a borrower should rethink a commonly-used tactic of blaming the borrower, Thompson said.

"Putting the burden back on the borrower is going to be a dicey thing," agreed Bob Minick, a senior jury consultant with TrialGraphix/Kroll Ontrack. "The sympathies lie with the borrowers and the general perception is that lenders didn't do their job and the borrower has been victimized."

The prevailing juror attitudes also "put a higher burden on a corporation to demonstrate it acted in a reasonable and honorable fashion," Minick said.

Thompson expects that given the current environment, trial lawyers handling subprime-related cases are likely to do more pre-trial testing in the form of focus groups and mock trials.

"I wouldn't want to bet the case without at least testing it. If lawyers rely on their own instincts, I think they are fooling themselves," he said.

Questions or comments can be directed to the writer at: sylvia.hsieh@lawyersusaonline.com