That was back in 1993 when the book on “how personal injury litigation has become a costly game to you’ came out so these quotes may be outdated in their numbers.
The Insurance Information Institute estimates that 40 percent of all medical malpractice insurance is written through companies owned by doctors. (page 88)
Litigation is necessary to help the litigants acquire the information necessary to settle cases and to resolve questions of injury, liability, value and law….I estimate that no more than ten percent of the lawsuits currently filed need information that can be obtained only through the deposition process. However, once the information has been obtained, usually within a matter of a few months after the filing, most of these cases should settle. (page 114)
In the less regulated or unregulated states, the insurance rates are lower because the companies can compete freely. The problem is not the insurance companies ripping off the public but the stifling regulations. (page 123)
“The most blatant examples of misguided regulatory involvement in automobile insurance prices occurred in Massachusetts and New Jersey”. Jean C. Hiestand, the V.P. General Counsel of State Farm Insurance Company, in Competition And the Rating Laws: Do They Make A Difference? “They not only pay the highest rates but a large percentage are in the involuntary markets”. (page 149)
Many states do not allow insurance protection for punitive damages because punitive damages are to punish you for conduct beyond ordinary carelessness….Where punitive damages are sought, you have read that juries sometimes find against an innocent person or company for large sums. Worse yet, such debt is not dischargeable in bankruptcy. (page 189)
If unchecked, social inflation, driven by the myriad factors discussed in this study, will become a self-perpetuating phenomenon that sends improper signals regarding the value of damages to jurors, judges and defendants. This will lead to higher insurance premiums, financial strain on insurers, depletion of municipal resources and disincentives for businesses to take risks. This hidden “tort tax” benefits no one except plaintiff attorneys and their clients who engage in practices that lead to social inflation.
There are two broad responses that need to be pursued to combat the perpetuation of social inflationary pressures. One is to influence the development of public policy at the state and federal levels to reveal and control excesses. The second is for insurers and defense counsel to adopt and deploy more aggressive strategies that push back and formally object to tactics violating existing norms of courtroom behavior.
Younger, populist, anti-corporate juries are more prone to make larger awards than baby boomer jury pools. Plaintiff attorneys making good use of the “reptile theory” to provoke jurors to punish defendants painted as dangerous to society have led to staggeringly large verdicts. The combined impact of these trends has led to more and larger lawsuits, as well as year-over-year increases in “nuclear verdicts” — verdicts in excess of $10 million.
Some elements of the COVID-19 litigation torrent fit squarely in Buffet’s meaning of social inflation: expansion of what insurance policies cover. To be sure, the plurality of the 10,000 coronavirus suits filed involve insurance coverage litigation, with plaintiffs seeking coverage for business losses in policies where insurers maintain coverage does not exist.
Florida property insurers are jacking up rates by double-digit percentages, blaming the hikes on lingering damage from past hurricanes, a wave of litigation, and a law that encourages lawyers to sue by allowing courts to award them big fees.
The rate increases in Florida, the third-largest property insurance market among U.S. states, are the highest in memory, according to some insurance agents and residents. One danger, they say, is that the new rates could make owning a home in Florida unaffordable.