It doesn't reduce your compensatory damages, but it's not always about money. It's also about time. A cut in the penalty rate from 18 to 10 percent is substantial. It makes it much cheaper for the insurer to dispute and delay a claim. If you're desperate for money (as most claimants are after a disaster), that matters a lot.
And supported by Texans for Lawsuit Reform and a whole host of groups connected to Texas politics. What part of the story is wrong?
The business lobbyists favored it. I don't dispute that. It's individual businesses that weren't as unified. Wonder why that might be the case.
OK, let's discuss the specifics. It cuts the penalty rate, so it's cheaper to delay payment. That's obviously pro-insurer. It makes it more difficult to recover attorney's fees and reduces the amount recoverable Also pro-insurer. It allows the insurer to fully assume the liability of its agent or adjuster and dismiss claims against them, which means it'll be easier to remove the cases to federal court. That means less favorable rules of procedure, usually a more defense-friendly venue and jury pool, and a slower docket. All pro-insurer and diminishing the settlement value of the claim.
People can disagree about how pro-insurer the bill is, but it's solidly in favor of the industry and hostile to the claimant all the way around. No, it's not like the med mal law in the sense that it's going to completely slam the courthouse doors in the face of a huge number of people with merited claims, but it's going to make a difference. If you choose to pursue your claim under the new law law, you're remedies and leverage will be weaker. That is indisputable.
For what it's worth, under the terms of the law, it applies to any "first-party claim that: (A)is made by an insured under an insurance policy providing coverage for real property or improvements to real property; (B)must be paid by the insurer directly to the insured; and(C)arises from damage to or loss of covered property caused, wholly or partly, by forces of nature, including an earthquake or earth tremor, a wildfire, a flood, a tornado, lightning, a hurricane, hail, wind, a snowstorm, or a rainstorm." See Tex. Ins. Code 542A.001(2). You are correct that it does not apply to TWIA claims.
Of course they don't want their compensation limited. Who the hell does? But to say it has nothing to do with putting claimants in a weaker position is nonsense. The bill has several substantial provisions, and they all work to the benefit of the insurer - less money to pay out and easier to delay.
And by making it harder to recover attorney's fees or limiting them, you do harm the claimant. Here's why. The lawyer doesn't receive the attorney's fees amount recovered in court. The fee he actually collects is contingent and calculated according to the total recovery. If the court awards $100,000 in damages plus $15,000 in attorney's fees, I'm not walking out of there with $15,000. I'm walking out of there with my percentage of the total recovery. Accordingly, if you cut the amount awarded in attorney's fees, it will hurt the claimant's bottom line.
I'm sure that's true. The business lobby tends to support reducing litigation. Not surprised, and the lobby itself doesn't care. They don't stand to lose anything. Its members do. It's a bit like teachers' unions. They stand for one thing, but their members don't necessarily have the same interests and don't always agree with them. If you're an actual small business owner, there's no question that this bill is bad for you.
Click to expand...