To understand how plaintiff attorneys play the blame game in Personal Injury Protection (PIP) lawsuits, follow the money. Insurance companies do what they are supposed to do, and then they are sued for millions of dollars because they supposedly acted in bad faith.
“A pair of decisions out of the Fourth District Court of Appeal has revived the bad faith debate,” reports the Daily Business Review in an April 29 news article headlined, “Restoring the Good Faith in Florida’s ‘Bad Faith’ Insurance Litigation.”
The article describes a hypothetical case in which a policyholder is at fault in an auto accident. The insurance company tries to settle and the insured person is hit with big damages. What happens next? An attorney sues the insurance company, claiming it acted in bad faith. The insurance company loses the trial and pays millions of dollars more than the insurance policy required.
Asked about that scenario, UAIC chairman and CEO Richard Parrillo Sr. notes that his company recently paid out $12 million to cover a $5.2 million bad faith award and the associated legal costs.
“If I had more of these, we wouldn’t be sitting here,” he is quoted as saying in the article.
Plaintiff attorneys see it another way, saying that insurance companies make it expensive to litigate. That doesn’t make sense, given that Florida is one of the most pro-plaintiff states in the nation, according to the article, Florida allows first-party and third-party claims under common law and by statute.
To make matters worse, insurers are required to use “the same degree of care and diligence as a person of ordinary care and prudence should exercise in the management of his own business,” according to a state supreme court ruling. A jury, not a judge, decides whether the insurer acted negligently.
Efforts to reform the bad-faith rules are stuck in the courts and the state legislature. Bills in the House and Senate failed to pass in the latest session. That is bad news for every driver in Florida because the costs eventually are passed on.