July 20 roundup

by Walter Olson on July 20, 2008

  • Judge Henry Lackey, who went to feds to report bribe attempt by Dickie Scruggs associate, gets award and standing ovations at Mississippi bar convention, says he was just doing a judge’s job [NMC/Folo]
  • Related: should Ole Miss Chancellor Robert Khayat have used official university stationery for his letter pleading leniency for chum/ benefactor Scruggs? [Daily Mississippian and editorial via YallPolitics, continuing coverage at Folo; earlier]
  • Stephen Dubner: if lawyer/subscriber can sue Raleigh News & Observer over perceived decline in its quality, who’s next? [NYT/Freakonomics blog, earlier]
  • Maneuvering over retrial of Kentucky fen-phen defendants Gallion and Cunningham [Lexington Herald-Leader]
  • A Fieger sideshow: though acquitted in recent campaign laundering prosecution, controversial lawyer fared less well in lawsuit against Michigan AG Michael Cox; Sixth Circuit tossed that suit and upheld order that Fieger fork over attorney fees to Michigan Supreme Court Justice Stephen Markman over subjecting the justice to unfounded vilification [ABA Journal; fixed typo on Circuit]
  • Citing long history of frivolous litigation, federal judge in central Texas fines disbarred lawyer Charles Edward Lincoln and his client and bans Lincoln from bringing any more federal suits [SE Texas Record]
  • Faced with $18 million legal-malpractice jury verdict, Indiana labor law firm stays in business by agreeing to make token payment, then gang up on its liability insurer for the rest [Indianapolis Business Journal, Ketzenberger/Indy Star via ABA Journal]

{ 6 comments }

1 Bill Poser 07.20.08 at 8:02 pm

How could Lincoln, no longer a member of the bar, represent a plaintiff in a suit, frivolous or otherwise?

2 VMS 07.20.08 at 8:04 pm

Faced with $18 million legal-malpractice jury verdict, Indiana labor law firm stays in business by agreeing to make token payment, then gang up on its liability insurer for the rest [Indianapolis Business Journal, Ketzenberger/Indy Star via ABA Journal]

Blame the insurance company on this one. They rolled the dice and lost. Say you have a $300k liability insurance policy on your car, and you were involved in an accident where the victim’s leg was broken. Say the victim is willing to settle for the policy limit and you agree, but for whatever reason, your insurance company refuses. The verdict comes in for $1,000,000.00 and is upheld. The insurance company is liable for the amount above and beyond the policy limit. The insurance company cannot put its duty to protect you behind its financial interests.

The bloggers on this site would say that’s terrible, but the insurance company has figured the risk. There are many times that a Plaintiff will demand the policy limit (or other amount) and a trial results in a small award or nothing.

3 gitarcarver 07.20.08 at 11:02 pm

The insurance company is liable for the amount above and beyond the policy limit.

And why should that be? The insured person has the option to purchase more insurance but chose not to. Why is the insurance company on the hook for a lack of foresight or planning by the insured?

The insurance company cannot put its duty to protect you behind its financial interests.

The insurance company has a responsibility to all its customers, not just a single individual. The insurance company has a legal obligation to its stock holders to keep costs down. If the individual wants to do things that are so horrendous or risky that the amount of insurance they carry is not going to cover whatever damages they may cause, that is not the fault of the insurance company.

4 Deoxy 07.21.08 at 10:03 am

This is actually a difficult issue.

Let us say there is a meritorious claim for the policy maximum. What does it gain the insurer to simply pay it? Almost nothing – if it goes to trial, it might lose, and they would gain, or it might win (as expected) even more, and they still pay ONLY the policy maximum, just as before, but the policy holder is now is a MUCH worse position.

On the other hand, giving the insurer NO control over such settlements encouragages “gaming the system”, where the policy holder could get kickbacks for approving extra-high (but still under policy max) settlements.

Either way, either side has perverse incentives. It’s quite messy.

5 Schmitty 07.21.08 at 8:35 pm

Gitarcarver:

An insurance company is liable for the amount above and beyond the policy limits in such situations because, generally speaking, the insurance company has the exclusive right to settle or not settle claims (though some policies have consent clauses that modifys this right). If an insurance company alone decides whether to settle or not, but had no risk of a judgement beyond the policy limits, insurance companies would have an incentive to take a risk and try every claim — regardless of whether there was a risk of an excess judgment and regardless of whether the insured wanted to settle.

Note, by the way, that an insurance company is only on the hook if it unreasonably fails to settle within the policy limits.

6 Schmitty 07.21.08 at 8:37 pm

Make that “modifies” . . . .

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