As I was growing up the importance of history class eluded me. But as I have aged and seen history repeat itself in many arenas,
I can see that if we forget the past, we will watch it repeat over and over again.
I am referring to the 1963 Consent Decree.
This major "win" for our industry was the work of the United States Justice Department and then U.S. Attorney General Robert
F. Kennedy. It was filed on Oct. 23, 1963, and outlined many illegal business practices of three primary insurance trade associations
and their collective 265 insurance company members. The key charges indicated that the illegal business practices began in
1947, or near that year. The decree addressed activities in both the appraisal and repair industries. It stated:
"The aforesaid combination and conspiracy has consisted of a continuing agreement and concert of action among the defendants
and co-conspirators to eliminate competition among member companies in the adjustment and settlement of automobile property
insurance claims, among appraisers and among repair shops, in order to control and depress automobile material damage repair
costs through boycott, coercion and intimidation of repair shops..."It further noted that the insurance trade associations had, "... Induced member companies to channel automobile material damage
repair business to those repair shops which will, and boycott those repair shops which will not: (1) Accept the sponsored
appraiser's estimate as to the cost of repairs; (2) Give a price discount on replacement parts; (3) Maintain hourly labor
rates at a figure which is considered the lowest possible rate in the area; and (4) Accede to the sponsored appraiser's determination
of time allowances..."
The final judgment was signed by more than 225 insurers who agreed to stop these business practices.
After talking with shop owners across the country I am saddened to report that many (maybe most) shop owners and managers
are not aware of the significance of this historical document. They also are not aware of the efforts many small groups have
made over the years to bring the attention of past justice departments to the collision repair industry.
But now the timing appears right and we again have a second chance to be part of a historic event, which can have a positive
effect on our industry.
Recently many of you may have received a new petition addressed to our current U.S. Attorney General Eric H. Holder Jr. The
new petition was sent to state trade associations and other industry members requesting their signature for support of the
request of the Justice Department to police our industry and enforce our antitrust laws as they relate to the illegal business
practices noted in the 1963 Consent Decree.
Recently, the Society of Collision Repair Specialists (SCRS) released a position statement and sent a letter to the attorney
general that outlines its support of this new initiative.
Their position includes the following: "We are asking that you not only investigate whether the tenants of the 1963 Consent
Decree are being violated, but initiate a parallel investigation into probable violations of the Sherman Act and related federal
anti-trust and/or restraint of trade statutes by entities which are operating within the collision repair industry currently."
This recent initiative could be one of the most important opportunities we have in our lifetime to change this industry. The
timing can not be better. The key is that this time, you cannot sit on the sidelines.
Since a majority of the shop owners and managers may never read about this important initiative, you need to get involved
and inform everyone in your local area. We can gain more momentum and strength through grass roots efforts. Sometime soon,
you will be given an opportunity to be part of the petition.
Echoing the spirit of a great message delivered in the 1960s, let me say, ask not what your associations and leaders can do
for you, ask what you can do for your industry and business.
Contact info: Tony.Passwater@aeii.net
Posted 2009-07-09 17:30:10.0
