… truth and risks
Thursday, August 30th, 2007
By Chris Fitzsimon
It makes sense to think strategically when a lawsuit dangles over your head, which is where the City of Durham finds itself regarding false charges of rape lodged against three former Duke University lacrosse team members.
Ex-District Attorney Mike Nifong lost his law license and his job over his eyes-closed pursuit of the accusations leveled by a hired exotic dancer. But Durham police played a role in the misguided prosecution, whether by going along with Nifong’s efforts, by not protesting strongly enough that the evidence did not justify charges, or by both. Because a report in May by City Manager Patrick Baker and Police Chief Steve Chalmers totally failed to explain the department’s conduct, the City Council had to order an independent investigation, conducted by respected experts and headed by former state Supreme Court Justice Willis Whichard.
City administrators have put that investigation in neutral gear for the next several days because the insurance company that would face a big payout if the students sue and the city loses is having the jitters. The company says that Durham can’t take any actions that might hurt the city’s cause if it later has to defend itself. If the Whichard commission bores down to the truth, and if the department is shown to be at fault, that perhaps could undermine the city’s position in court.
That might cause some tears to be shed for the insurers — but actually, we thought that taking the financial risk is what the insurance business is all about. Besides, no one was crying as Durham paid its $220,000 annual premium for just this possibility. The company, by the way, is a subsidiary of American International Group, Inc., better known as AIG. It recently reported second quarter 2007 net income of $4.28 billion. If the Duke students sue and win, AIG’s exposure would be $5 million, minus Durham’s $500,000 deductible — not an insignificant sum, but one the company should be able to handle. Durham has since changed its insurance carrier. (more…)
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