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Preventing Insurer Litigation Conduct From Becoming Evidence of Bad Faith: Avoiding Pitfalls From New Risks

Overcoming the Waning Recognition of Litigation Privilege in Coverage and Bad Faith Litigation

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

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Thursday, March 7, 2024

Recorded event now available

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This CLE webinar will discuss the increasing phenomenon of having allegations of bad faith against an insurer based on conduct, strategies, and statements made during litigation. The panel will then recommend strategies to minimize the risk of bad faith.

Description

Though not unlimited, and subject to jurisdictional variations, the litigation "privilege" or "immunity" prevents parties and their lawyers from being sued by the opposing parties for what they said or did as part of a judicial or quasi-judicial proceeding. Some courts, however, have not applied these rules with equal force in insurance litigation.

Some courts have required insurers to defend bad faith allegations based on litigation strategies or conduct routinely employed by insurers. For example, bad faith has been alleged based on assertions of overzealous advocacy, that claims or defenses were pleaded or maintained without sufficient evidentiary basis, purported misrepresentation of facts or policy terms, claims of failure to produce all relevant requested documents, alleged overly aggressive assertion of privilege or work product, so-called questionable appeals, and for allegedly filing too many declaratory judgment actions.

The logic of these courts varies but might be that any act that could theoretically support the contention that an insurer failed to uphold its express or implied duties to the insured may be the basis of a bad faith claim. Stated differently, these courts may suppose that no privilege or immunity can apply to any act or statement that could possibly state a claim for bad faith.

Listen as this panel discusses how allegations of bad faith against an insurer are sometimes generated from conduct, strategies, and statements made during litigation, and then recommend strategies to minimize the risk of bad faith.

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Outline

  1. Origins and history of the litigation privilege
  2. Nexus between communication and proceedings
  3. Qualified vs. absolute privileges
  4. Exceptions, malice, and cross-jurisdictional issues
  5. Applying privilege outside of litigation
    1. Pre-suit
    2. Post-suit
    3. Non-litigation situations
  6. Strategies for avoiding possible denial of privilege or immunity in common scenarios
    1. Zealous and aggressive prosecution or defense of an insurance company's position
    2. Claims or defenses pleaded or maintained without sufficient evidentiary basis
    3. Malpresentation of facts or policy terms
    4. Failure to produce all relevant requested documents
    5. Overly aggressive assertion of privilege or work product
    6. Questionable appeals
    7. Filing declaratory judgment actions
    8. Post-suit settlement offers

Benefits

The panel will review these and other key issues:

  • What strategies should insurance counsel modify or avoid in order to reduce the risk of having litigation conduct support a claim for bad faith?
  • How can an insurer balance having a uniform approach to filing declaratory judgment actions and avoiding being accused of disparate treatment of similar claims?

Faculty

Arnold, Nicholas
Nicholas P. Arnold

Partner
Blue Williams

Mr. Arnold joined Blue Williams in 2020 as a partner in the Metairie office. He graduated from Louisiana State...  |  Read More

Young, Michael
Michael Young

Partner
Reichardt Noce & Young

Mr. Young is a litigation partner at Reichardt Noce & Young, LLC in St. Louis, Missouri, with a primary emphasis in...  |  Read More

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