Several new trends in personal injury litigation challenge the conventional methods of defending a policyholder against a liability claim. Insurance carriers need to be aware of these trends when preparing to defend their policyholder against a lawsuit:
- Attorneys who represent plaintiffs in personal injury cases historically have advertised their services. According to some, this advertising, as well as other public communication from plaintiffs’ attorneys, has changed the legal landscape. For example, claimants for personal injury damages now tend to get an attorney involved earlier and more often rather than dealing directly with an insurance carrier.
- In Nevada, attorneys are allowed to advertise and make public statements, but there are several restrictions. Even so, attorneys in Nevada have a lot of freedom to communicate in a way that encourages more litigation while discouraging settlement negotiations.
- The practice of third party litigation funding has grown. According to the Chamber of Commerce, which finds the practice problematic and favors restrictions on it, this type of investing is a multi-billion-dollar business. Basically, an investor will agree to finance the cost of litigation in exchange for a portion of any settlement or judgment.
- The practice of third-party litigation funding relieves plaintiffs from having to front the high cost of going to court to pursue a complex claim against a well-funded defendant. The practice gives plaintiffs more flexibility to pursue their case through trial and appeal. On the other side of the same coin, the investor will want the highest settlement possible since they get paid based on the plaintiff’s recovery.
- Of late, attorneys have been able to convince juries across the country to award verdicts worth tens if not hundreds of millions of dollars in personal injury cases. They can often do so by exposing social attitudes that big businesses and their insurers care little for individual citizens when it comes to pursuing profits.
To defend their policyholders well, insurers must respond to these challenges
While several states are contemplating steps to maintain the integrity of the court system as these new trends take hold, insurance carriers must also account for these developments in the legal landscape when defending their policyholders.
A skilled defense strategy should be responsive to these new challenges and be able to meet them head-on.
