Bad-Faith Treble Damages Win in Wash. Vote
In a big-bucks lobbying battle that pitted trial lawyers against the insurance industry in Washington state, the attorneys have prevailed.
Voters have approved a referendum upholding a state law passed earlier this year that calls for courts to award treble damages to policyholders when their carriers refuse, in bad faith, to pay claims that are covered under the insurance contract. Although the votes from yesterday’s election haven’t all been counted, the referendum clearly has passed and insurance carriers have conceded defeat, reports the Associated Press.
The treble damages provision applies only to policyholders suing their own insurance carrier, not a third party’s insurer, notes the Seattle Times. It also does not apply to medical coverage, according to the newspaper.
Outspent by the insurance industry, which ponied up more than $11 million, trial lawyers, who raised a relatively scanty $3 million to lobby in the hard-fought battle over R-67, were something of an underdog. But, says the state lawmaker whose enacted bill led to the referendum, the insurance industry has created a unified group of diverse opponents through its claims-handling conduct.
“It’s not a liberal or conservative issue. It’s not a Democratic or Republican issue, and it’s not the western part of the state versus the eastern part of the state,” Sen. Brian Weinstein, D-Mercer Island, tells the Seattle Post-Intelligencer. “Everybody buys insurance, and everyone who purchases insurance has had experience with insurance companies, and they perceive R-67 as a vehicle to level the playing field.”
Without the law, policyholders couldn’t recover punitive damages, because Washington is one of the few states that prohibits them from being awarded in liability suits, an earlier Seattle Times story notes.
