CCC to pay $8 million in total loss class action settlement
CCC Information Services Inc., a subsidiary of CCC Information Services Group Inc., has been ordered by a Madison County, Illinois circuit court to pay notice and administration fees and other costs associated with the settlement amounting to approximately $8 million. The circuit court order grants final approval of the settlement agreed to by the company, 15 of its customers and the plaintiffs in various class actions consolidated in Madison County, Illinois. The settlement includes no admission of liability or wrongdoing by CCC or its customers.
The Honorable Judge Ralph Mendelsohn entered an order giving final approval to the settlements and directing the implementation of their final terms. In July 2005, CCC Information Services announced that it had received the Court’s preliminary approval for settlement of these cases, which relate to the valuation of vehicles that have been declared a total loss by insurers.
The $8 million plus settlement includes no admission of liability or wrongdoing by CCC or its customers.
“We are very pleased to see this matter near a close,” said Githesh Ramamurthy, Chairman and Chief Executive Officer of CCC. “The Court’s decision confirms that the settlement terms are equitable for all parties. We, in turn, believe that this is a very good result for CCC and its customers.”
The administrative process is now underway, and CCC has stated that it is fully reserved for these payments. CCC will also engage the services of an independent, third party as a Court-appointed monitor for five years following settlement. The monitor will periodically review the methodology used in CCC’s valuation product and oversee the performance of various product validation studies.
Seven lawsuits, including some seeking class action status, were filed in 2000 against seven separate auto insurance companies — Allstate Insurance Corp., Atlanta Casualty Insurance Co., Farmers Insurance Co., Guaranty National Insurance Co., Orion Auto, Progressive Insurance Co., and Travelers Property and Casualty Corp. — and CCC Information Services for the insurers' use of its total-loss evaluation program for damaged cars.
At issue was the method by which CCC's total-loss program determined the value of a crashed car. Steve Ryan, an attorney and recognized expert on CCC's total-loss program, has stated that the problems began with CCC's computer software, which produced a value for each car before insurance company adjusters had a chance to determine its value based on pricing from local dealerships and auto-trade magazines.
CCC determined the total-loss value of wrecked cars by sending out Field Inventory Representatives to car dealerships nationwide in order to calculate a car model's "take" price. The "take" price is the lowest price for which a dealer will sell the car, not the price the dealer is asking for the vehicle. The “take” price is not the price buyers would pay if the car is bought off the lot. CCC also searched auto trade magazines and local newspapers for figures to build up its databases.