Pennsylvania: “According to police, Kyle Piper, then 17, lost control of his car on a wet Route 422 in Union Township and struck a steel pole.” His 15-year-old brother Stephen, a passenger, was catastrophically injured. “At the time of the accident, according to court documents, the family was insured through Erie Insurance Exchange and believed $200,000 in uninsured motorist benefits and another $100,000 in liability coverage was available for Stephen.” Several legal twists later, Erie has agreed to pay $18 million. [New Castle (Pa.) News]
At least ten states have now adopted variations on the idea that motorists who unlawfully drive without insurance should give up at least some of their right to sue for pain and suffering in a later accident. Missouri has become the latest, its legislature overriding a veto by Gov. Jay Nixon (D). Organized insurers have backed the idea, which one recent study says can reduce the number of drivers on the road without insurance. It should be noted that trial lawyers’ collective interest in the issue is subject to some ambiguity: while they will recover less in a given lawsuit if their uninsured-motorist client cannot sue for pain and suffering, a rise in the share of drivers that are insured improves their chances of recovering funds in cases generally. [Insurance Journal, Billy Smith/Wolters Kluwer Compliance Corner, PCIAA, Susan Ladika/CarInsurance.com]
Known to some of our readers through his Maryland Injury Lawyer Blog, and to many others as one of our most valued commenters (bringing the perspective of a seasoned plaintiff’s attorney, a perspective I will confess is sometimes lacking here otherwise), Ron also teaches a course on insurance law at the University of Baltimore School of Law. Last week he was kind enough to invite me to stop by and present my own perspective on the role of insurance in tort law. (Nutshell version: the insurance mechanism is exceedingly imperfect, and legal theorists and policy makers often go astray by assuming that it works more smoothly than it does.) Thanks, Ron!
Quest for deep pockets: the homeowners’ insurer had already thrown in its policy limits over an accident in which an 18 year old guest allowed to consume alcohol at a private home had injured himself in a car crash. Now an Ocean County, N.J. judge has ruled that the party host’s auto insurer can also be obliged to provide coverage under a general liability endorsement, ruling it irrelevant that the accident had nothing to do with the insured’s own cars. [New Jersey Law Journal]
They appear to be going nowhere in state legislatures:
A mandate for gun buyers could be more challenging than for drivers, given insurers’ aversion to the risk from assaults. That compares with U.S. auto insurance, where companies spend more than $5 billion a year to win customers in a $178 billion market.
“That’s why things like mandatory auto insurance kind of work, because you’ve already got a highly functional market and it’s a matter of herding the last stragglers into it,” Walter Olson, a senior fellow at the Cato Institute, a think tank dedicated to limited government, said in an interview. “But when there is no functional insurance market at all for some kind of risk, it’s a different question.”
It doesn’t help that the ObamaCare episode has raised public resistance to the idea of mandatory insurance. Related: even two authors somewhat favorably disposed toward the idea, and who believe it might be enacted in some forms without overstepping the Constitution, predict its effect in reducing injury by deterring negligent gun handling would “probably not be very great.” [Stephen Gilles and Nelson Lund, Regulation magazine (Cato, PDF)]
- “New Study: U.S. Legal System Is World’s Most Costly” [Daniel Fisher, Ted Frank on Chamber/NERA study]
- “Madoff lawyers collect $700 million in fees” [CNN Money]
- “How insurance substitutes for regulation” [Omri Ben-Shahar and Kyle Logue, Regulation, PDF]
- On the Founders’ concept of rights as embodied in Declaration of Independence [Ray Hartwell, American Spectator; and thanks for reference to my book Schools for Misrule]
- “A Glass Half Full Look at the Changes in the American Legal Market” [Benjamin Barton, SSRN]
- Oooh, a whole WordPress site devoted to ripe-for-rediscovery social scientist Edward Banfield [Kevin Kosar: Edward C. Banfield, An Online Resource]
- “Q. How does one go from editing an adult magazine to practicing law?” [Susannah Breslin interviews Dan Kapelovitz]
A Houston-based trial lawyer has some grandiose plans for snagging New York storm-insurance cases: Steve Mostyn “indicates his firm should be able to take on more than $1 billion in disputed claims — or half of all the Sandy litigation.” That’s assuming clients sign on, of course. One who did was a swim club owner from Pound Ridge who was frustrated dealing with New York lawyers and quickly signed a contract with Mostyn’s firm: “It is worth the 40 percent just for someone to listen to my story and be kind to me,” she said. [Austin American-Statesman]
- Harold Lasswell and Myres McDougal’s influential article on legal education figures prominently in Schools for Misrule; Henry Manne says their scheme of actual classroom pedagogy did less well [Bainbridge]
- Deanship of local plaintiff’s attorney at St. Louis U. is short, colorful [NLJ]
- GW lawprof trips, falls at Denver Law event, now in court [Above the Law]
- Law reviews requiring authors to sign indemnity clauses. Reason for alarm? [Dan Markel, Prawfs]
- Out-of-touch law academy, vol. 18: Duke prof dismisses floodgates arguments on principle [Ted Frank]
- “Should Law Reviews Consider Race When Selecting Articles?” (and do they?) [Josh Blackman]
- Insurance is an undercovered topic in the law school curriculum, so Randy Maniloff decides to do an intervention [Coverage Opinions, PDF, lead article]
“Liability insurance” may be a misnomer, since some of the proposals would require the purchase of bonds against both intentional acts commonly excluded from ordinary liability coverage, and also misadventures for which owners would not presently be held legally responsible (such as third party criminal use of a gun following a theft not occasioned by owner negligence.) [Reuters, Nelson Lund/GMU, Jessica Chasmar/Washington Times, New York Times via Fed Soc, Taranto/WSJ, Josh Blackman]
Would a mandatory insurance scheme survive judicial scrutiny if it were motivated by a desire to burden the exercise of a constitutional right? David Rifkin and Andrew Grossman, WSJ:
Several states… are considering gun-insurance mandates modeled after those for automobile insurance. There is no conceivable public-safety benefit: Insurance policies cover accidents, not intentional crimes, and criminals with illegal guns will just evade the requirement. The real purpose is to make guns less affordable for law-abiding citizens and thereby reduce private gun ownership. Identical constitutionally suspect logic explains proposals to tax the sale of bullets at excessive rates.
The courts, however, are no more likely to allow government to undermine the Second Amendment than to undermine the First. A state cannot circumvent the right to a free press by requiring that an unfriendly newspaper carry millions in libel insurance or pay a thousand-dollar tax on barrels of ink—the real motive, in either case, would be transparent and the regulation struck down. How could the result be any different for the right to keep and bear arms?
P.S. The American Insurance Association is opposed to the more ambitious versions of the idea, at least: “Property and casualty insurance does not and cannot cover gun crimes.”
“A federal appeals court on Thursday ruled that insurance companies can be required to pay long-term disability benefits to a recovering drug addict if the person would face a significant risk of relapse by returning to work.” The First Circuit parted company with the Fourth, which has ruled the opposite way. [Jacob Gershman, WSJ Law Blog, subscription; Colby v. Union Security Insurance, PDF]