Journal ArticleDOI
Settlement at Policy Limits and the Duty to Settle: Evidence From Texas
TLDR
In this article, the association between the duty to settle, settlement at limits, claim duration, and defense costs using detailed data from Texas for 1988-2005 on closed, commercially insured personal injury claims was studied.Abstract:
All insurance has coverage limits, and insurers usually control whether a case is settled or tried. If the insurer rejects a within-limits settlement offer, the insured bears the risk of an above-limits verdict. In response, virtually every state has imposed a “duty to settle” on insurers, which creates incentives for plaintiffs to make at-limits offers and for insurers to accept those offers when expected damages exceed limits. We study the association between the duty to settle, settlement at limits, claim duration, and defense costs using detailed data from Texas for 1988-2005 on closed, commercially insured personal injury claims. We focus principally on medical malpractice suits against physicians, but find consistent evidence for other types of cases. We find strong evidence that the duty to settle affects settlement dynamics. Essentially all physician-defendant cases that settle at-limits are preceded by an at-limits demand. Roughly 20% of physician-defendant cases settle at 90-100% of policy limits (“broad at-limits”) and 13% settle exactly at limits (“exact at-limits”). Broad- and exact-at-limits cases close about five months faster than similar “below-limits” cases -- a roughly 20% shorter time from suit to settlement, controlling for payout and type of harm. Broad- and exact-at-limits cases also have substantially lower defense costs, controlling for case duration and complexity. More broadly, as the payout/limits ratio approaches 1 from below, duration declines (controlling for payout) and defense costs decline (controlling for payout and duration). Payouts above-limits are uncommon; when they occur, insurers are the primary payers. Policy limits alone cannot explain these results; most likely reflect a combination of policy limits and the duty to settle.read more
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Current index to legal periodicals
TL;DR: In this paper, Cardozo et al. proposed a model for conflict resolution in the context of bankruptcy resolution, which is based on the work of the Cardozo Institute of Conflict Resolution.
Book
Contract Law: Rules, Theory, and Context
TL;DR: In this paper, the authors present an accessible introduction to all aspects of American contract law, useful to both first-year law students and advanced contract scholars, taking the reader from contract formation through interpretation and remedies, considering both practical and theoretical aspects throughout.
Journal ArticleDOI
Does the Threat of Insurer Liability for “Bad Faith” Affect Insurance Settlements?
Danial Asmat,Sharon Tennyson +1 more
TL;DR: In this article, the authors examined the effect of tort-based bad faith on insurance settlements and found that the presence of tort liability for insurer bad faith increases settlement amounts and reduces the likelihood that a claim is underpaid.
Journal ArticleDOI
Characteristics of Medical Liability Claims Against Dermatologists From 1991 Through 2015.
Heather Kornmehl,Sanminder Singh,Brandon L. Adler,Alexander E. Wolf,Dean A. Bochner,April W. Armstrong +5 more
TL;DR: Male dermatologists were sued more often than female dermatologists and alleged errors in procedures and misdiagnosis gave rise to the most lawsuits, and dyschromia was the most common adverse outcome alleged in lawsuits.
Posted Content
The law and economics of liability insurance: A theoretical and empirical review
Tom Baker,Peter Siegelman +1 more
TL;DR: The authors survey the theoretical and empirical literature on the law and economics of liability insurance, and examine the evidence of their effects, concluding that these features work reasonably well, so that liability insurance probably does not generate substantial ex ante moral hazard.
References
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Journal ArticleDOI
Claims, Errors, and Compensation Payments in Medical Malpractice Litigation
David M. Studdert,Michelle M. Mello,Atul A. Gawande,Tejal K. Gandhi,Allen Kachalia,Catherine Yoon,Ann Louise Puopolo,Troyen A. Brennan +7 more
TL;DR: Claims that lack evidence of error are not uncommon, but most are denied compensation, and the vast majority of expenditures go toward litigation over errors and payment of them.
Posted Content
Physicians' Insurance Limits and Malpractice Payments: Evidence from Texas Closed Claims, 1990-2003
TL;DR: Using Texas Department of Insurance data on paid malpractice claims against physicians that closed in 1990–2003, this work provides the first systematic evidence on levels of coverage purchased by physicians with paid liability claims and how those levels affect out‐of‐pocket payments and patient compensation.
Posted Content
Do Defendants Pay What Juries Award? Post-Verdict Haircuts in Texas Medical Malpractice Cases, 1988-2003
TL;DR: In this article, the authors report evidence on post-verdict payouts from the most comprehensive longitudinal study of matched jury verdicts and payouts, using data on all insured medical malpractice claims in Texas from 1988-2003.
Journal ArticleDOI
Blood Money, New Money and the Moral Economy of Tort Law in Action
TL;DR: This article conducted a qualitative study of personal injury lawyers in Connecticut and found that compensation and retribution concerns figure far more prominently in tort law in action than the deterrence concerns emphasized in much of the theoretical and doctrinal literature.
Journal ArticleDOI
"Bad Faith" Refusal to Settle by Liability Insurers: Some Implications of the Judgment-Proof Problem
TL;DR: In this paper, the authors consider the problem of conflicts of interest between the insured and the insurer in the conduct of litigation, and propose a solution to resolve the conflicts by allowing the insurer to decide whether or not to defend a claim.