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Combating the Bad Faith Set-Up In Insurance Litigation

Strategies to Minimize the Risk of Excess Judgments and Punitive Damages

Recording of a 90-minute CLE webinar with Q&A

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Conducted on Wednesday, March 13, 2019

Recorded event now available

or call 1-800-926-7926

This CLE course will discuss and explore the evolution of the proverbial bad-faith set-up in insurance litigation. While the fundamentals of insurance bad faith remain the same, recent developments have blurred the lines between proper claim handling and efforts to “set-up” insurance carriers for bad faith. The panel will discuss and detail both first-party and third-party claims across a myriad of policy lines, along with the tactics commonly associated with set-up allegations, and will analyze recent case law in different jurisdictions addressing this controversial issue with a particular focus on the anticipated impact of the American Law Institute’s Restatement of Law – Liability Insurance.

Description

The bad faith set-up is not new. Plaintiffs have long incorporated this into their claim presentations, using the insurance claims as the foundation for aggressive future litigation tactics that target specific insurance policy provisions or an insurance carrier’s approach to specific issues. Fueled by the prospect of substantial damage awards, plaintiffs' attorneys have great incentive to try to maneuver insurance companies into committing acts that may constitute bad faith.

The set-up was traditionally limited to third-party litigations where an insurer refused to settle a tort claim within policy limits within a limited period. The tactic has now shifted to other policy lines, from first-party property insurance claims and an insurer’s handling of matching, appraisal, and calculation of depreciation to employer’s professional liability insurance and diminishing policy limits. The ultimate goal of the plaintiff remains unchanged - to recover substantial extra-contractual damages, including attorneys' fees, where permitted.

Insurers and their counsel must be able to recognize the issues so as to avoid the bad faith set-up. Counsel for claimants and policyholders meanwhile must know the case law, insurer tactics in response, and recent cases that outright reject the concept of the set-up.

Listen as our authoritative panel of insurance practitioners discusses this significant and evolving topic and the high-stakes litigation that often ensues, analyzing recent case law in different states. Our panel will explain the tactics, methods of, and red flags of bad faith set-ups through first-party and third-party scenarios.

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Outline

  1. The bad faith set-up demystified
    1. What is the “set-up”?
    2. The American Law Institute’s Restatement of Law – Liability Insurance and how that will fuel the “set-up”
    3. Common tactics and red flags
  2. Insurer best practices: Diagnosis and avoidance
  3. Claimant pitfalls: When attorney actions are challenged as a bad faith set-up attempt
  4. Other potential extra-contractual causes of action against insurers

Benefits

The panel will review these and other key issues:

  • What are the common red flags that may indicate a bad faith set-up is in the works?
  • How can insurers best avoid bad faith set-up attempts?
  • What are the pitfalls for claimants whose actions are challenged as a bad faith set-up attempt?
  • In what circumstances have insurers pursued the doctrine of bad faith set-up and how have the courts treated these arguments?
  • Are there other causes of action impacted as well?
  • Can insurer defenses be set-up too?

Faculty

Buonocore, Julie
Julie Buonocore

Atty

Ms. Buonocore concentrates her practice in defending insurance carriers and their insureds in a variety of...  |  Read More

C. Scott Rybny
C. Scott Rybny

Partner
Rebar Bernstiel

Mr. Rybny represents insurers in all phases of first and third party insurance disputes, including pre-litigation...  |  Read More

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