A Bid to Save the 1963 Consent Decree

Posted On: 11/20/19
Posted By: Susan Orr

Fender Bender Oct 2019 / By Melissa Steinken / Read the original article here

’63 Consent Decree: Enforceable or Forgettable?”

“Can Your Business Survive Without Enforcement of the 1963 Consent Order?”

In the early 2000s, those articles covered the topic of the 1963 Consent Decree, which was initially created when the United States Justice Department settled a class action lawsuit brought against over 200 insurance companies, when three insurance trade associations agreed to refrain from practices like steering and setting prices. The question earlier this decade was whether or not the 1963 Consent Decree should be enforced.

And, in recent weeks, that question has been posed once more. The U.S. Department of Justice is currently considering terminating the decree. 

The 1963 Consent Decree was enacted to legally instruct 265 insurers and other entities not to conspire to unreasonably restrain trade and commerce in the collision repair market. They were restricted from setting prices and steering repair work away from certain auto body repair facilities. 

“To us, we saw it as a perpetual decree that can’t be sunsetted,” says Tony Lombardozzi, collision repair industry consultant. “To us, it was evident that, at the time, if someone made another insurance company not named in the original decree aware that the terms exist then it applies to them.”

Lombardozzi, who began his repair apprenticeship in 1957 and went on to open his own body shop in 1978, is a supporter of leaving the decree in place for many reasons, but one of the most important being that it “keeps insurance companies on their toes.” In other words, if insurance companies know that the decree is in place, they’re more likely to avoid practices like price-setting. 

Read the full article HERE