Entries Tagged 'US-Canada Law' ↓

This is a continuation of the last post looking at Comparative Bad Faith Law in BC and Washington. We’ll now move onto the comparison with Besel v. Viking Insurance…

COMPARE  Besel v. Viking Insurance, 146 Wn.2d 730 (2002)

Basic facts:

D, insured by Viking, crashes his pickup truck and injures his passenger, Besel.  Viking did not respond to Besel’s phone calls and letters regarding settlement, and in fact lost the claims file at some point during negotiations, causing delay to the evaluation of the claim.  Besel provided clear evidence that his damages exceeded $200,000; D’s policy limit with Viking was for only $25,000.  Viking failed to respond to numerous offers from Besel to settle his claims for $25,000, and ultimately indicates its intent to defend the claim on issues of damages and comparative fault (despite the fact that no WA court has ever assigned more than 50% fault to the passenger in a vehicle driven by an intoxicated driver). Continue reading →

This will be a two part post. First an introduction will be provided and then the outline of Shea v. M.P.I.C., 55 B.C.L.R. (2d) 15 (1991). In the second part of this post (coming next week) a comparison will be made with Besel v. Viking Insurance, 146 Wn.2d 730 (2002) and then we’ll explore how the Washington Supreme Court held and the result.

Both British Columbia and Washington have recognized a cause of action for bad faith in the context of an insurer’s failure/refusal to settle a claim within policy limits once liability and damage in excess of limits has become reasonably clear.  Likewise, both jurisdictions recognize the right of an assignee (usually the tort plaintiff) to pursue a bad faith claim held by the tortfeasor against his insurer.

The typical approach involves an assignment of the defendant’s bad faith rights in exchange for an agreement by the plaintiff not to seek judgment amounts against the defendant’s personal assets in excess of the applicable insurance limits.

The difference in the approaches from the two jurisdictions, as you will see, lies in the fact that Washington’s more robust bad faith law provides claimants with a mechanism for obtaining an assignment of these rights through a consent judgment in lieu of trial, whereas the British Columbia approach offers no avenue for obtaining these rights until an excess tort judgment has been obtained at trial. Continue reading →

Question #1:
Is it possible to bring a bad faith claim for acts which are not specifically proscribed by the Washington Administrative Code?

ANSWER: Absolutely. The WAC’s only set minimum standards for insurer conduct, and compliance with the WAC’s alone does not guarantee an insurer has avoided a bad faith claim.  The duty to act in good faith is “fairly broad and may be breached by [a variety of] conduct short of intentional bad faith or fraud.”  See Truck Insurance Exchange v. Vanport Homes, Inc., 147 Wn.2d 751, 764, 58 P.3d 276 (2002).  The trier of fact – typically a jury – will be charged with determining if the questioned conduct rises to the level of bad faith.  See Kallveig, supra.

Question #2:
These standards seem pretty amorphous and plaintiff-friendly.  Is there any good news for insurers in the case law?
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This is a continuation from my last post on insurance bad faith in Washington and British Columbia

(11) Delaying the investigation or payment of claims by requiring an insured, claimant, or the physician of either to submit a preliminary claim report and then requiring subsequent submissions which contain substantially the same information.

(12) Failing to promptly settle claims, where liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage.
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The Washington legislature vests the (elected) Washington State Insurance Commissioner with the authority to issue regulations identifying acts an insurer may commit which violate the duties of good faith and fair dealing.  The following acts have been specifically identified as such in the Washington Administrative Code with respect to the settlement of claims; other provisions address the handling of coverage disputes, resolution of first-party property damage claims, and other situations:

WAC 284-30-330   Specific unfair claims settlement practices defined. The following are hereby defined as unfair methods of competition and unfair or deceptive acts or practices in the business of insurance, specifically applicable to the settlement of claims:

(1) Misrepresenting pertinent facts or insurance policy provisions.

(2) Failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies.

(3) Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies.

(4) Refusing to pay claims without conducting a reasonable investigation.

(5) Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed.

(6) Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear. In particular, this includes an obligation to effectuate prompt payment of property damage claims to innocent third parties in clear liability situations. If two or more insurers are involved, they should arrange to make such payment, leaving to themselves the burden of apportioning it.

(7) Compelling insureds to institute or submit to litigation, arbitration, or appraisal to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in such actions or proceedings.

(8) Attempting to settle a claim for less than the amount to which a reasonable man would have believed he was entitled by reference to written or printed advertising material accompanying or made part of an application.

(9) Making claims payments to insured’s or beneficiaries not accompanied by a statement setting forth the coverage under which the payments are being made.

(10) Asserting to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration.

I’ll continue on with the next nine points in the next post. Stay tuned…

Beginning in the early to mid 1990’s, many insurers in the United States began using computerized claims adjusting software to assist them in keeping payouts on small to moderate personal injury claims more modest.  CSC Corporation’s Colossus program was the best-known, and most widely discussed, of the claim adjusting programs – but while some companies may use or have used other software, the principle behind the process is fundamentally similar regardless of the program used.

The program’s purpose is to provide the insurance adjuster with a range of authority for non-pecuniary damage awards based on the severity of injuries and treatment history entered into the program’s matrix.  The adjuster inputs data from medical records, based on a coding system developed in conjunction with the software developer and the insurer.  The insurer can calibrate the program to be stingy or more generous with certain types of treatment, certain elements of damages, and the like – again, a process which is unique to every insurer who uses the program.  Once the data input is complete, the adjuster runs the program, and receives a range for what should be offered for the “pain & suffering” component of the claim.

Approximately two-thirds of U.S. insurers have utilized some type of claims adjusting software since the programs first gained wide acceptance in the early 1990’s.  Since the companies don’t widely advertise their use of these programs (often out of fear of increased exposure to bad faith litigation), much of the evolving knowledge about “who’s using Colossus” and how it works is developed anecdotally, through discussion amongst plaintiff’s lawyers in each individual U.S. jurisdiction who pass along tibits gleaned from adjusters on their files, discovery in bad faith litigation which escaped protective orders, investor filings where the insurer may have “bragged” about using software to control claims costs and increase shareholder value, and the like.
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This is an article that Wyatt Pickett and I wrote a while ago. I think you’ll find it interesting…

At Cross Border Law, our practice focuses on complex multijurisdictional civil litigation that implicates interests on both sides of the U.S.-Canadian border.  Yet we’re often confronted with questions – either directly from potential clients, or from referring Canadian counsel — regarding cases that present more modest challenges.  For example, non-catastrophic personal injury claims arising out of auto accidents in the United States between a Canadian plaintiff and a U.S. defendant often pose straightforward litigation problems which don’t require specialized expertise in choice-of-law or forum non conveniens to resolve. The temptation to settle such cases on your own, without the assistance of U.S. counsel, can be compelling – and in certain cases, may be appropriate.  But if you’re going to try to resolve your client’s U.S. based personal injury matter short of filing a lawsuit, keep these four key points in mind:

1) Costs are not generally recoverable in U.S. jurisdictions – Of the 50 state jurisdictions in the U.S., only Alaska follows a modified version of the “costs to the victor” approach followed by the British Columbia Rules of Court.  In all other states, the plaintiff will generally be fronting his own costs for record production, expert witness fees, court reporters and the like.  Thus, if you’re going to attempt to prepare your client’s case for settlement, the key is to find ways to obtain essential evidence and expert reports in the most cost-effective manner possible.  If presented with a settlement offer, you must likewise consider the cost of bringing your BC-based medical experts and fact witnesses to the U.S. forum in the event that your client rejects settlement and proceeds with a lawsuit.  While there are occasional exceptions to the “no costs” regime, the simple fact is that many small to moderately sized cases may have legal merit, but are simply not financially feasible for a BC plaintiff to pursue. In some such cases, settlement may be your only realistic option.  In others, your jurisdiction may offer alternatives such as mandatory arbitration or “small claims” courts, where relaxed rules of evidence (such as limits on defence discovery, or easy introduction of testimony by telephone or written report) might be sufficient to make a claim feasible to litigate.
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Continuing on from where I left off in the last article “Canadian Client Injured in America“

All About UMP
Most importantly, you need to be mindful of the way that underinsurance (UMP) works for all BC residents.  You cannot settle a US action for policy limits without first obtaining ICBC’s consent; otherwise, you risk forfeiting your client’s entire UMP claim.

Every ICBC-licensed driver, member of the household of the licensed driver and occupants in his or her vehicle maintains CDN $1M UMP coverage, providing a social safety net for significant claims.  In reality, the various deductions for Canada Pension Plan, (un)-employment insurance and both public and private disability plans reduce UMP awards so drastically that they provide very little safety net for a catastrophically injured plaintiff.  Still, it represents a potential claim worth at least several hundred thousand dollars, and you certainly don’t want to face such a legal malpractice claim for preventing your client from being able to pursue it.
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Over the next couple of posts I’m going to include information from a recent presentation I gave at a Washington State Trial Lawyers Association (WSTLA) event – they are now called the Washington State Association for Justice (WSAJ).

There are reportedly more than 5,000 accidents per year for British Columbians outside of the Province, and I only have the capacity to handle half of them.

I’d expect that, in such cases, you’d find a Washington lawyer with whom to associate so that you could properly maximize your client’s entitlement. What is true in BC is equally true in Washington, that insurance adjusters are simply not going to settle claims for decent value unless and until counsel is able to demonstrate the ability to take a case to trial.
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