Stratton Faxon Supports Bill Making It Easier to Sue Insurers for Unfair Claim Practices

Stratton Faxon, Connecticut’s firm for trial law, wishes to even the playing field for consumers – at last.

Connecticut trial lawyers are lobbying for legislation that would streamline the efforts of consumers in the state, seeking redress from insurers for unfair claims practices.

The insurance industry is not pleased.

The bill, advocated by the Connecticut Trial Lawyers Association and Attorney General Richard Blumenthal, would allow accident victims to sue a wrongdoer’s insurance company under the Connecticut Unfair Insurance Practices Act (CUIPA).

At present, this isn’t possible as only the insurance commissioner and the attorney general can bring an action under the law. The bill would also remove a phrase from the law that defines a violation as something an insurer does wrong “with such frequency as to indicate a general business practice.” The phrase makes it almost impossible for a consumer to show such a pattern, according to the Lawyer’s Association.

Changing the law would encourage insurers to resolve claims more fairly and quickly instead of forcing individuals to sue, clogging the court system, and costing taxpayers more money, advocating attorneys allege.

Insurance trade groups perceive the bill, SB 763, as a boon to litigation, and as a solution that would force insurers to settle unsubstantiated claims and drive up premiums.

“Bad, bad, bad, bill, it ought to die,” asserted Susan Giacalone, counsel at the Insurance Association of Connecticut. “It would turn the CUIPA statute on its head to the detriment of consumers. It opens the floodgates to litigation,” she added.

Joel T. Faxon, a lawyer with Stratton Faxon in New Haven, vehemently disagreed. “No no no,” he responded, “this bill would even the playing field for consumers, a development that’s been long overdue.”

Robert I. Reardon, president of the Reardon Law Firm in New London, supported the contention of his colleague. Consumers “are tired of big business treating them poorly. People want to be able to assert their rights,” he stated emphatically.

Giacalone noted that a successful CUIPA case could be used to allege a violation of another law, the Connecticut Unfair Trade Practices Act, which makes it possible to collect double or triple damages for a CUIPA violation.

“Current law favors the industry,” Blumenthal countered, “It’s a testament to the political sway of the insurance industry. There’s no rational or policy reason for it.”

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