Posts Tagged ‘insurance’

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.]

“How Washington Made Harvey Worse”

“A federal insurance program made Harvey far more costly—and Congress could have known it was coming.” [Michael Grunwald, Politico, more] And from July, “Reforming the National Flood Insurance Program: Toward Private Flood Insurance” [Ike Brannon and Ari Blask, Cato Policy Analysis]

More: “Lack of Zoning Is Not Houston’s Problem” [Vanessa Brown Calder, Cato; Nolan Gray, CityLab]

In Philadelphia, sue thy neighbor

Dozens of Registered Community Organizations (RCOs) across Philadelphia “have to provide their own liability insurance to protect their volunteer staffers, and all it takes is one or two lawsuits for premiums to reach untenable heights.” The lawsuits are readily forthcoming since a common role of RCOs is to submit comments on land use development proposals, high-stakes issue often leading to litigation. The Bella Vista Neighbors Association, involved in a lawsuit three years ago, was set to shut down just the other day when “a Utah-based carrier specializing in tough-to-insure entities — think fireworks, helicopter bungee jumps, and trampoline companies — stepped in, finalizing a plan hours before the meeting, which coincided with the last day of the association’s coverage.” [Julia Terruso, Philadelphia Daily News]

Liability roundup

  • Entrepreneurs launch plaintiff’s insurance to cover costs of pursuing litigation, not quite same thing as the “legal expense insurance” commonly found in loser-pays jurisdictions [ABA Journal]
  • More on the class action procedure case Microsoft v. Baker, from the just-ended Supreme Court term [Federalist Society podcast with Ted Frank, earlier]
  • Why Bristol-Myers Squibb, the Supreme Court case on state court jurisdiction, “is one of the most important mass tort/product liability decisions ever” [James Beck/Drug & Device Law, earlier]
  • Sandy Hook massacre: “Newtown And Board Of Education Seek Dismissal Of Wrongful Death Lawsuit” [AP/CBS Connecticut]
  • Pennsylvania: “Evidence-Manipulation Claims Dog Asbestos Lawyer” [Lowell Neumann Nickey, Courthouse News] “California’s Latest Litigation Invitation: A Duty to Protect Against ‘Take-Home’ Exposure” [Curt Cutting, WLF]
  • It’s almost as if trial lawyers were in the driver’s seat of these ostensibly public actions: Tennessee counties’ opioids suit also seeks to strike down the state’s tort reform law [Jamie Satterfield, Knoxville News-Sentinel]