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But the verdict, based on a sample of six claims, contained enough ambiguity to leave both sides declaring victory in
the case, filed on behalf of the Social Security Administration. In a verdict returned Wednesday, the jury found that
two of the disability claims had been fraudulent and three others had showed no evidence of fraud. The jury was unable
to reach a decision on the last one.
Both sides had agreed to present a small sample to the jury to keep the lawsuit from bogging down in complexity. Unum
processed almost 400,000 disability claims in 2007, and paid out more than $4 billion in benefits.
In the next phase, the two sides will seek a decision on what the sample reveals about Unum's overall behavior, and the
extent to which it harmed the Social Security program.
Jim Sabourin, a spokesman for Unum, said the finding that only two of the six claims involved fraud showed that the
lawsuit was without merit.
"The jury rejected the claim that there was any systemic problem with the way Unum adjudicates its claims," Mr. Sabourin
said. He said Unum intended to appeal the part of the verdict that had found fraud.
Colette Matzzie, a lawyer for the plaintiff, Patrick Loughren, said she was heartened that the jurors had accepted the
basic idea that requiring able-bodied people to apply for Social Security could sometimes constitute fraud.
"I think that Unum is going to have to change its practices," Ms. Matzzie said. "It is going to have to screen people"
before insisting they apply for Social Security disability benefits.
A spokesman for the Social Security Administration, Mark Hinkle, said the agency was monitoring the lawsuit but would
not comment on it.
The lawsuit was filed under a federal whistle-blower statute that allows private citizens to sue on behalf of government
programs if they believe they have evidence of fraud. The lawsuit is being tried in United States District Court in
Boston.
The lawsuit is one of two federal cases contending that Unum and another disability insurer, Cigna, are forcing able-bodied
people to repeatedly apply for Social Security disability benefits, under the threat that if they do not, their insurance
payments will be cut. The Social Security Administration defines "disabled" more stringently than the insurance companies
generally do, and many people who qualify for disability insurance benefits do not qualify for Social Security.
The lawsuits assert that sending claimants into the Social Security system allows Unum and Cigna to reduce their claims
reserves, which in turn raises the insurers' profitability.
Unum and Cigna say that referring claimants to Social Security is a standard practice in the industry and that there is
nothing wrong with it.
The lawsuits assert that the referrals are clogging Social Security with questionable applications, and forcing
taxpayers to pay needless processing costs. People whose applications are rejected are entitled to a review of their
cases by an administrative law judge, and the administrative courts have a huge backlog.
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A federal jury in Boston found that Unum, the nation's largest disability insurer, had committed fraud in some cases by
requiring customers to apply for Social Security benefits even though it knew they were not eligible.