Posts Tagged ‘insurance’

Expensive windshields in Florida

Florida’s overdue insurance-law reform on the “assignment of benefits” issue had a carve-out excluding auto claims, and Sunshine State lawyers continue to ride auto-glass cases for automatic fee entitlements. A report from the Florida Justice Reform Institute “shows nearly all auto glass lawsuits come from just 15 law firms — one firm, Malik Law, accounts for nearly 30 percent of all such lawsuits filed this year. Additionally, the vast majority of auto glass lawsuits are in Hillsborough and Orange counties. FJRI speculates that’s due to higher attorney fee awards in those counties.” [Drew Wilson, Florida Politics, earlier]

Energy and climate roundup

Florida assignment of benefits reform heads to governor

The Florida legislature has passed, and Gov. Ron De Santis indicates he will sign, a bill reforming the operation of the policyholder feature known as assignment of benefits (AOB), widely criticized for encouraging inflated claims and tactical filings meant to obtain lawyers’ fees. [Amy O’Connor, Insurance Journal] In anticipation of likely savings, state-owned insurer of last resort Citizens Property Insurance Corp. has scaled back a 25 percent requested rate increase to 10 percent. [The Insurer] Earlier on assignment of benefits here and here.

January 30 roundup

  • “Battle over stolen diamond-studded golden eagle takes flight as insurer fights order to pay up” [Jason Proctor, CBC]
  • Fentanyl test strips save lives. Feds oppose their distribution [Jeffrey Singer, Cato]
  • D.C. Circuit judicial nominee Neomi Rao (full disclosure: an old friend) “comes under fire for undergraduate writings on sexual assault — though her views from 25 years ago are consistent with today’s statutes and rulings.” [K.C. Johnson, City Journal]
  • One reason the costs of rent control policies get understated: it’s hard to control and account for declines in the quality of apartment services [Richard McKenzie and Dwight Lee, Cato Regulation magazine]
  • Federalist Society National Lawyers Convention video panel on antitrust law transparency with Deb Garza, Hon. Frank Easterbrook (“Always remember that sunlight is full of ultraviolet radiation”), Eric Grannon (incentive problems of “amnesty plus” program; “moral turpitude” provisions, more on which), moderated by Hon. John Nalbandian;
  • Big reason military and health care procurement is so pricey: “scads of less specific programs out there [are] insanely cheaper and more functional, but those programs cannot justify the costs of becoming compliant” [from Tyler Cowen comments]

Liability roundup

Lawyers milk Florida accident-bill law for one-way fee entitlements

A Florida law allows persons who have undergone treatment after auto mishaps to sign over to the medical provider their right to sue their insurer under so-called PIP (personal injury protection) auto coverage. Under the provisions of this assignment of benefits (AOB) law, when the medical provider sues, it is entitled to one-way attorney’s fees (payable if it prevails, but not if it loses). These attorneys’ fees can dwarf the underlying sums being sued over — amounting to about $40,000 following a $790 win in one extreme case.

Now Florida attorneys are rolling out tens of thousands of AOB suits, many of small enough quantum that they can be filed in small claims court, even if the fee entitlement thereby triggered is not so small. In Volusia County, where small claims filings more than doubled to over 12,000 cases in 2017, “a single local law firm accounted for all of that increase — and then some — by filing 8,400 cases that year…. In one example, Advantacare of Florida, represented by Kimberly Simoes, filed a lawsuit against State Farm saying the company had not paid it for services it rendered to Stephen Smith. Advantacare was awarded $789.62 according to court files. Simoes was awarded $39,985 in attorney’s fees. Attorney Mark Cederberg was awarded $3,500 for his expert testimony regarding whether Simoes’ fees were reasonable. About a month after the attorney’s fees were awarded, Advantacare dismissed the lawsuit.” [Frank Fernandez, Daytona Beach News-Journal; earlier here and here]

As I have written elsewhere, the true two-way loser-pays systems that operate in most other legal systems take care to avoid the fee-escalation incentives that typify many one-way fee entitlement laws in the U.S. In particular, they tend to hold fee recoveries below actual outlays, and often decline to reimburse fees unnecessarily expended.

Banking and finance roundup

  • High cross-border remittance costs for globally mobile workers slow ascent from poverty, and know-your-customer and money-laundering regulations have made things worse [Money and Banking]
  • “The Supreme Court should find ALJs to be ‘officers of the United States’ and thus make them subject to presidential appointment and removal.” [Ilya Shapiro on Cato merits amicus filing in Lucia v. Securities and Exchange Commission]
  • “Settlement of Lawyer-Driven ‘Merger Tax’ Litigation Stumbles in New York” [Greg Herbers, WLF]
  • “Financial Regulation: The Apotheosis of the Administrative State?” 2017 National Lawyers Convention Federalist Society panel with Richard Epstein, Hal Scott, Peter Wallison, and Arthur Wilmarth, moderated by Judge Carlos Bea;
  • With advances in Oregon and even California, deregulation of commercial insurance lines is having a moment [Ray Lehmann, Insurance Journal; Lehmann’s 2017 Insurance Regulation Report Card for R Street Institute] Perennially troubled Massachusetts, on the other hand, continues slide in same survey [Agency Checklists]
  • Tech companies have been experimenting with old and lawful device of dual class stock and SEC shouldn’t be allowed to use raised eyebrow power to stop that [Bainbridge, WLF]

Liability roundup

Insurer owes $200,000 after drunken game of “chicken”

The insurance policy had excluded coverage for injuries arising from “illegal use of alcohol,” but a Sixth Circuit panel ruled that since the 22-year-old’s actual consumption of the alcohol hadn’t been unlawful — though his decision to operate a dirt bike while intoxicated afterward was — the exclusion did not apply. Back to the drawing board on contract language for the insurer [John Agar, MLive; Lowell, Mich.]