The Bad Faith Trial – A New Defense Perspective
While researching “reported” jury verdicts on bad faith matters I ran across a striking statistic: roughly 87% of the reported decisions were favorable to Plaintiff’s. Any kind of bad faith trial, especially an insurer’s defense verdict seems to be a rare commodity these days. With increased training for claims staff over the last several years (see SHM’s list of Florida approved seminars) I question why these cases are still settled after reviewing claim files and the underlying defense attorney’s file. As we know, those on the Plaintiff’s side will not be putting down their legal briefs or marketing their services to other plaintiff’s lawyers without a real reason to do so. The following will be an ongoing blog entry on a trial of the bad faith claim and how the training and preparation of the same will assist the entire insurance industry from more of these claims in the future.
PREPARATION NOT PERFECTION:
First and foremost – the truth must be told throughout the jury selection process. No soft sell here – jurors see through the smoke and mirrors and any indication that a lawyer, especially a lawyer who is representing an insurance company is attempting to pull a fast one during jury selection can be the silent death knell to a trial. During discovery Plaintiff’s counsel will focus on every small problem that arises out of a claim file – attempting to paint the claim officer as negligent, lazy. A good counter which should come across in your case theme is the preparation of your claims team, even if not perfect. Often Plaintiff’s counsel will ask questions during jury selection such as:
- Are the jurors insured?
- Are the jurors insured by any of the defendants, and if so, how do they feel about the conduct alleged here? (Do not shy away from a juror simply because the juror is insured by the defendant. Such jurors are at times even more incensed over the insurer’s conduct because they perceive it more as directly affecting how they will be treated under the same circumstances).
- How do the jurors feel about claims that do not get paid?
- If cancellation of the policy is at issue, did the insurance company follow state regulations or its own procedures on cancellation?
- If investigation was lacking, especially in light of the company’s own procedures, what do jurors think about decisions based on limited or faulty investigations? This is even more important where investigations are geared simply at evidence that would warrant denial of the claim, but ignore other evidence which would favor payment.
- If a claim is denied based on a policy provision, especially an exclusion, were the jurors aware of the existence of the many exclusions that limit coverage? Many people are not.
- How does the jury feel about any delay or “insurance run around” that the insured may have been victimized by while the claim was being processed or adjusted?
- If the adjuster made representations that even suggest the legitimacy of the claim or that the claim would be settled, ask the jury how they feel about such representations.
- If the claim was denied based on policy provisions or exclusions, did the insurer follow its own procedures and guidelines for policy interpretation? If not, questions should be asked of the jury about a company’s duty to consult or follow their own guidelines.
- How does the jury feel about any act of the insurer that could be interpreted as substituting the financial well-being of a multi-billion dollar company for the financial security or loss of your average-Joe plaintiff?
- Ask your jurors about their experiences, if any, with all the damages and ill consequences suffered by the plaintiff as a result of the insurer’s denial.
- Particularly in classic bad faith cases (cases where the insurer fails to settle a case against the insured within the policy limits which results in either an excess or punitive damage judgment against the insured), how well did the insurer keep the plaintiff informed on case evaluations, chances of loss, potential for excess verdict, need for personal counsel, offers of settlement from the opposing party, etc.? Probe the jury panel for their sentiments on the right to know this information.
- Has the insurance company injected an “advice of counsel” defense? If so, questions regarding the jury panel’s sentiments about attorneys are in order. In particular, does the jury believe any private attorney’s opinion is superior to a multi-billion dollar insurance corporation, which invariably called most of the shots, especially where the insurance company is in the business of evaluating losses and claims?
- In an “advice of counsel” case, did the insurance company control the attorney’s defense? Many insurers now have extensive policies on approval of attorney actions. How does the jury feel about the degree of influence many insurers exert over defense counsel at the expense of the attorney’s ethical obligation to be an independent advocate for his client?
The cases that I suggest taking to trial will be matters that have positive answers to these questions with witnesses from the claims and defense attorney standpoints who can “speak the truth” to their aggressive investigation and representation of the insured in the typical third party matter. Please note that aggression is not perfection and a juror does not expect the same if couched in the right manner. For example a juror can and will relate to an adjuster or defense attorney who has multiple matters to work on and DESPITE the workload found the time to be professional, answered phone calls, asked for information to assist in investigating the claim, requested EUO’s, medical authorizations, employment authorizations, but still didn’t receive complete information from the Plaintiff and their counsel ACTUALLY SYMPATHETIC. With this background started during jury selection the typical Plaintiff arguments of ignoring a claimant, failing to investigate a claim, etc can be diffused. As you can tell, however, one must have the correct facts and these only come about after training of the staff.