Insured Odds before the MIA are actually looking up...

November 24, 2014

Most lawyers I've spoken to about Maryland's bad faith statute agree that few insureds win Maryland Insurance Administration bad faith proceedings. But that's hearsay. Thanks to the MIA's annual reports, you can show this graphically:

 

 

 

This data (drawn from the MIA's annual reports) tells us enormous amounts about bad faith cases that can help lawyers and insureds evaluate their chances.

 

Trend 1: Insured Odds are improving

 

The biggest number is an Insured's odds of actually winning before the MIA. Of merits decisions, those odds are usually terrible by any standards. There's no point mincing words about it.

 

But some years are far worse than others. In 2007-2008, insureds won once in every sixteen merit decisions. In 2010, 1 in every 18. Compare that to 2009 and 2011, both roughly 1 in 8. 

 

And they've been getting much better lately. 2012 was nearly 1 in 3 and 2013 was 1 in 4.

 

Trend 2: Settlements are more likely than before, but less likely than in ordinary civil litigation.

 

The other big number increasing is the amount of cases not going to trial. Assuming that all the Settled Or Withdrawn are actually Settled (which seems rational; once you file it, why withdraw it without getting cost of litigation?), Settlements are growing more common, but are still far less common than settlements in ordinary civil litigation.

 

 

 

As you can see, the odds of successfully settling a case jumped significantly after 2010 and stayed basically high. They are presently slightly under 50%. (Admittedly, that is very low relative to ordinary civil litigation.)

 

This is probably happening because parties usually settle when the outcome is basically known. Every year, the MIA issues more precedential opinions and clarifies more issues. That means that more cases have pre-determinable outcomes. Hence more settlements.

 

Unfortunately, we do not know whether these are cost of litigation settlements, Lloyds settlements, or hush money settlements. This might conceal many insured successes. 

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