Litigation Conduct: Removing the 'Bad Faith' Trap

Pure self-interest seemingly motivates parties in the adversarial system; but insurance presents a twist on that common understanding when it comes to litigation over coverage. That is because courts have held that a coverage action does not terminate certain obligations existing between an insured and its insurer ' even with respect to the particular claim at issue in the coverage dispute. With increasing frequency, aggressive attorneys representing policyholders argue that, despite traditional common law or statutory litigation and settlement privileges and protections, an insurer's conduct during a coverage lawsuit should be scrutinized with the aim of identifying evidence of 'bad faith' that can be used against the insurer.

32 minute read February 28, 2007 at 09:10 AM

By

Sheila R. Caudle And Jonathan Cohen