Dirk Derrick (00:00):
Welcome to The Legal Truth, the podcast created to provide you general legal information about South Carolina law lawyers and the legal process and hopefully prevent you from being surprised by the unexpected. We will answer many of the questions I've been asked during the past 35 years about South Carolina personal injury claims and workers' compensation claims. We'll also discuss existing laws and propose changes in the law and how they affect you. My name is Dirk Derek. I'm the founder of the Derek Law Firm and I'm your host.
Voieover (00:35):
Please see required ethics disclaimers and show notes.
Pearl Carey (00:42):
Hi everyone. Welcome back to the Legal Truth Podcast. I'm your host Pearl Carey and I'm here with my co-host Dirk Derek, and today we're discussing why reasonableness and bad faith remedies matter for everyone who touches an insurance policy. So Dirk, my first question for you is what does it mean when we say that an insurance company has a duty to act reasonably?
Dirk Derrick (01:01):
An insurance company has the duty, the legal duty when a claim is made to be reasonable and do what a reasonable insurance company would do as far as taking the claim, investigating the claim and paying the claim in a reasonable manner. First party cases where you have homeowners, something happens to your house, there's a statute that talks about first party insurance conduct, which requires reasonable conduct. It's been the law since I've got out of law school a couple of years ago and then on third party action we got something called the Tiger River Doctrine and there's another case that came after Tiger River, but basically it says that if someone injures you and then you make an offer to settle within their policy limits and it's reasonable for the insurance company to do that, the reasonable the insurance company needs to do that. The biggest reason for bad faith and the need to act reasonable is the unlevel playing field.
(02:00):
You've got the insurance industry and you got person filing a claim and for many, many years it's recognized that that's not a level playing field, especially since a lot of the insurance that we buy is mandatory. Get a mortgage on a home, you got to have homeowner's insurance on it. If you have a car, you got to have, it's mandated that you have car insurance. So the government's telling you you have to buy insurance and a large number of these situations. So these insurance companies then take your premium and then a claim arises and they have a duty to act in good faith because without it, the field would be way tilted more so than it is already.
Pearl Carey (02:41):
Right? And so why does that duty matter to policy holders?
Dirk Derrick (02:44):
Policy holders who have a claim against their insurance company Without bad faith and the need to act in a reasonable way, there would be no reason for the insurance companies to pay you early. They would apply the leverage of money and drag everything out. In their worst case scenario, they only have to pay what the contract says they have to pay with bad faith, there comes an element of punitive damages. The law says that if an insurance company acts in bad faith and you can prove it, then they don't only owe the contractual policy limits, but they owe more money to punish them for acting in bad faith. It is the leverage that levels out the playing field. If I don't have that leverage and you're an insurance company, I have a $500,000 house destroyed by a hurricane can happen in our neck of the woods, I file a claim for you to pay it.
(03:41):
I wrote it for 500, it was appraised for 500. Acting in good faith, you'll need to pay me my claim in a timely fashion so that I can rebuild my house and buy another house without bad faith, without the need to act reasonable and without the threat of punitive damages, you could say, nah Dirk, I don't think I'm going to pay you today. File a lawsuit, hire a lawyer with your own money and sue me and now I've got to go spend my money to hire a lawyer or pay my contingency, go after the money you already owe me. Get it Two years from now. During those two years you as the insurance company, you have held the money, made interest on the money and I've lost money by having to pay a lawyer. So when it's all said and done, I may net $350,000 of my 500. If I know that what would I settle for today? Not a wait two years to net three 50, it may be 300. So now I have a $500,000 policy that there's no way I can ever get it without the remedy of bad faith and the punitive damages to punish you if you are unreasonably holding my money to make me litigate.
Pearl Carey (04:51):
So how else does money factor into these situations?
Dirk Derrick (04:54):
From an insurance company standpoint, most of them are a public company. They got shareholders, they have a fiduciary duty to make as much money for their shareholders as possible. So I don't really blame them for what they do because their fiduciary duty is to their shareholders. They're trying to make as much money as they can for 'em. My fiduciary duty is my client. I'm trying to put as much money in their pocket, so they're trying to make money for their shareholders. My client's trying to get their claim paid and get the real value as fast as possible. If the insurance company can drag something out and claim to be acting reasonable while they're dragging it out, it puts my client in a bad situation financially it can be they can't work, they can't make mortgage payments, they can't get health benefits. That leverage of time and the leverage of money that an insurance company has on individual who need their claims paid immediately is a way they can wear people down to take less than the value of their case.
Pearl Carey (06:00):
So how does the leverage of uncertainty play into these situations?
Dirk Derrick (06:03):
Well, I've always believed that insurance companies have leverage of time, money, and uncertainty. The longer they can hold on their money and make interest, the longer they can make the insured or the client wait for the money, the lower the amount the client would take because of the time value of money, the leverage of time, the longer they can drag something out, the less somebody will take to get it finalized and the more money they make on the interest they have the leverage of money they hold the checkbook. The insured has given them a check every month or every six months for years when it's time to get paid on a claim, not a gift. What the insured paid for. The insurance company holds that money and they have the leverage of holding that money. They also had the leverage of outspending individuals if they really wanted to fight it, they could really bury somebody by trying to outspend them the leverage of uncertainty.
(06:56):
If you've never had a claim and this is the first house you've ever had destroyed and they're saying a juror's not do that, juror's not going to give you that. We are going to win this case and you're trying to decide how to help your family and get over it and get it back into a new house, that uncertain nature of what a jury would do a year and a half down the road puts leverage on you to take less money. That's the whole game. If you understand the game, the game is what can they do and not get caught committing bad faith but put enough leverage on the person filing the claim that they would take as little money as that's the game. That's the whole thing. That uncertainty is why we do focus group for 30 years they would say, we're not adding in bad faith, we just disagree with you that 12 jurors will value this case.
(07:49):
Like you say, you think they only value the case. There's UNC and uncertainty scares lawyers, it scares people who have filed claims. So we started doing focus groups so that we can run particular cases by the community to see how the community responds to the facts of that particular case so that we can give that information A to our client, But B, we give it to the insurance company to show 'em no, there's not uncertainty here. He gives what these 12 people think he gives what another 25 people think he gives what 250 people think about this by removing the leverage of uncertainty, we can often take that flipping of the leverage and flip time and money too because now we can say, Hey, we not playing your time a hundred people we focused at or 50 or the 25.
(08:39):
Here's what they got to say. Here's the value of this case. The validity and the value of this case has been flad by the people pay us on money within 30 days or we're withdrawing our offer to settle within policy limits and we're going after your insured's assets. Well, the insurance company has a duty to act in good faith to pay a claim within the policy limits and to protect their insured's assets. Now we've put the leverage on them. If you don't pay it, now you're acting in bad faith and if your insured gets a big judgment against them, then they can come back after you and sue you for bad faith but not protecting their assets. So that's why we do the focus group.
Pearl Carey (09:20):
Some say that the jury's verdict can balance out that leverage. Is that true?
Dirk Derrick (09:24):
Yes. Getting in front of a jury is the final leverage. Their leverage of time, money and uncertainty has not worked with this lawyer, with this particular claimant and you get to a jury then you do get to find out the true value of the case. It can balance it out. There's two caveats to that. Number one, it makes the insured spend a bunch of money they shouldn't have to spend litigating cases is expensive. So they've had to come out of pocket to litigate cases or have to pay for it out of their recovery. So it's cost the insured money that it shouldn't have to do if the case should have been settled two years ago. And as long as bad faith law exists that those people can then turn around and sue their insurance company or sue the company for making 'em drag it out and spend this additional time and money as long as you can sue for punitive damages and for that bad faith action, it requires a second action but it can balance it out.
(10:19):
I mean there's now an avenue in place with an insurance company. Acts unreasonable, makes some go try the case. They get a verdict more than the insurance coverage, they can get the insurance coverage and then either them or the person that the verdict is against can sue the insurance company for the additional cost for dragging the case out and acting in bad faith. Yes, it can make people do a lot of spending money, worry and waiting to get there when they shouldn't have to if it's a clear cut case. But you can get to a jury and finally get justice at the end as long as it's collectible and it can be collectible as long as the politicians don't protect the insurance companies and do away with bad faith or do away with their need to act in a reasonable basis.
Pearl Carey (11:04):
So what about the policy holder who's being sued? Why do they need bad faith laws?
Dirk Derrick (11:09):
I think this is probably the most interesting thing about this whole discussion that I never hear anybody talk about. When this tort reform bill came up last year in the Senate in South Carolina, they had a provision that said that an insurance company acting unreasonable was not bad faith, they would've changed the law. That's been the law forever as long as I practice and that's almost forever. And just because they don't pay the policy limits and then somebody go get a verdict way above the policy limits doesn't mean they're responsible for it or that they added in bad faith and that was taken out did not pass. But that's what they're pushing and they're pushing it here and they're pushing it other places in the country. They're trying to get away from the consequences of their bad faith acts or conduct and here goes why it's important.
(11:57):
I buy insurance, I'm a lawyer, I have so much my prize insurance. If that person says I'll settle within your policy limits, if I think I did something wrong or one of my lawyers did something wrong, let's settle it. The insurance company keeps the right to decide whether or not they don't pay it. It's not the insurance company's money I've paid for it to protect me, but the contract says it's their money and they can make a decision. They say No, we're not going to pay it. We think we can beat it. And now lawsuit against me comes out in amount 10 times the amount of my coverage. I have a judgment against me for the rest of my life or until they collect from all my assets or anything they can collect that I own to pay that judgment because the insurance company refused to settle within my policy limits.
(12:51):
There's case after case after case. I'll give you an example of two cases recently. We focus grouped these cases for outside attorneys. One case was the case against LAX beach service over the beach. We focused it focus group said the case was worth $15 million. I think those lawyers had made an offer for policy limits. It may have been 1 million or 2 million or 3 million or some kind of small amount in relationship to this death caused by their negligence. But they had made a demand for that that they would settle for this small amount. Focus group said it was worth $15 million. Insurance company wouldn't pay, wouldn't offer 'em the money. They went and got a judgment of $21 million. So LAX Beach Service now has a judgment against them for $21 million. They have turned around and sued their insurance company and said you should have settled when the plaintiff would've settled for just a couple million dollars a small amount if the law had changed and said their decision not to settle even if it was unreasonable is not bad faith then LAX has no recourse and people think this bad faith is about plaintiff lawyers trying to protect their pocketbooks and have leverage and it is leverage now.
(14:12):
And we do apply that leverage on behalf of our clients because if you don't have it, our clients have no leverage. We'd be trying all cases because the insurance company would have no incentive to pay us. It's for that but it's also for Mr. Latt and people who have paid insurance their whole life and then an insurance company do not pay a claim and then gets a big verdict against it. Another case we focused probably last six months, it was a medical negligence case over in Marion County. That lawyer and that family offered to settle for $1.2 million.
(15:05):
The amount of coverage for that doctor, the insurance company refused. They went over to Marion, they got a $30 million verdict against the doctor. That verdict is against the doctor or the medical group he's with. I mean he's worked his entire life and now he got this verdict against him that could have been done away with for $1.2 million. And you look at it and say, well yeah, people have different opinions. Focus group kind of determine what the value of, I'm going to put the complaint in the show notes after the $30 million verdict, the doctor has filed suit against the insurance company for bad faith insurance practice for not protecting his assets by paying the plaintiffs when the plaintiffs would've settled for its policy limits. And these are all in the complaint. It's all public record. I couldn't talk about the case otherwise, but this is in public record.
(15:55):
The insurance company own data. They have technology that they use to determine the strong points and weak points, unfavorable and favorable things about the case as it's moving along their claim strategy. They found unfavorable standard of care, unfavorable. That means did the doctor breach the standard of care? They said unfavorable still didn't offer their money. Causation did the standard of care cause this death, they rated it as unfavorable against a doctor did not offer the money. Degree of injury, unfavorable death of a 16-year-old death of a 16-year-old. They could settle for $1.2 million. There's only two things they found favorable and that was that doctor would be a good witness. They said that Marion County was a good venue for them. Well, anyone who practices law knows that Marion County is not a good venue for a defendant in this case their own attorney and the attorney that the doctor hired had his personal attorney telling them Marion County is not a good venue who've been practicing law for I think 50 years.
(16:59):
Told 'em I got grave concerns about this case and trying this case in Marion County. He was telling 'em they should settle the case, look through the complaint because they did a good job pleading the bad faith and putting out all the times people are telling them this is a dangerous case pay. The doctor even offered to come up with some money out of his own pocket to get it off of them and they refuse. It's another level now. That's the kind of conduct that the politicians in Columbia who were pushing the protection of bad faith was trying to protect. And people think it's lawyers who's going to get hurt, who's going to get hurt are business owners, individuals who have big verdicts against them and lose everything. They have doctors, anyone who can be sued if the insurance company that has insured you starts betting your lifetime work, any asset you've ever gathered, they betten that against their ability to hold onto their money. That is a dangerous place to be.
Pearl Carey (18:03):
So as of right now, just to clarify, in South Carolina they're allowed to just have that judgment go against the doctor and just not pay it As of right now.
Dirk Derrick (18:12):
Well you have to prove they acted in bad faith.
Pearl Carey (18:15):
Oh, right now. But they're trying to get rid, okay,
Dirk Derrick (18:16):
They're trying to get rid of your remedy to seek bad faith against, they're trying to protect them from this like this. I'm telling you that doctor had no say so on whether or not that insurance company would pay their policy limits to protect them. He paid for it. The law says they have a duty to protect them. When he begged them to pay it, they didn't pay it. $30 million verdict came out of it, could have been gone, could have been something nobody had ever heard of Case they get settled every day. Nobody would've ever heard of it. And they refused and they refused and they got this burden on this doctor. It is bad. I look through the evidence. I think it's one of the best cases for bad faith insurance practices I've ever seen. When the attorney that the insurance company hired to defend this doctor is telling them you need to settle this case.
(19:04):
There's all kind of dangers in this case and they refuse to do so. They're not listening to anybody. They're just trying to hold onto their money. And that is one case. It happens thousands of times in South Carolina. It can happen on small cases. If our client has $200,000 worth of damages and the insurance in the case, the total amount of insurance is a hundred thousand bucks and their medical bills are 200,000 bucks, you would say they ought to pay that money and if we make a demand for that money, they'll pay that money quickly and we can get the money. Whatever there is that exists, we can get it to our clients as soon as possible as it should be. If bad faith did not exist, they can say file suit, spend money and we'll see in two years whether you get it and if you get it good for you because out of that a hundred you don't have court call attorney fees and we're going to make interest on the money for the next two years. That's why bad faith has to stay in the law. It has to be the leverage that ordinary people can apply against insurance industry.
Pearl Carey (20:04):
So right now, can the doctor in this case, is he going to counter sue the insurance company for bad faith practices?
Dirk Derrick (20:10):
He has.
Pearl Carey (20:11):
Okay.
Dirk Derrick (20:11):
He has and lacks speech service. They've sued their insurance company for bad faith insurance practice because both of those situations they could have paid the policy limits and protected their insured and they have a legal duty to do that if it's reasonable to do so. If somebody has a frivolous lawsuit against a doctor and the doctor said this is frivolous, the insurance company says this is frivolous, everybody agrees it's frivolous. Well if it's actually frivolous, the trial judge will throw it out and then if the trial judge doesn't throw it out, they can file a motion to dismiss and then they can file a motion for summary judgment before trial. There's all kinds of opportunities to get it out and something like that was to end up being a big verdict. Nobody saw it coming. Probably wouldn't be bad faith. But in cases like this where anybody who looked at this case, they should have never held him out there When they refused to pay his personal lawyer wrote them a letter asking them to blue sky and basically what it means, and some insurance companies will do this.
(21:12):
They will blue sky the case if they feel strong that they have a chance of winning, but they also have this duty to protect their client's assets. The client wants to settled. They don't want their house in jeopardy, they don't want their business in jeopardy. An insurance company can write a letter to their insured and to the opposing lawyer and say, we don't blue sky, which means there's no limits. We don't blue sky our covered all the way to the sky. Whatever verdict you get, we'll pay for it. We'll take the risk, which is how it should be. We the insurance company, we believe we can win this case. So we'll take the risk of the multimillion dollar verdict. They asked for a blue sky letter for the doctor in this case and they refused. I think their response was he had a chance to buy more insurance if he was worried about it.
Pearl Carey (22:00):
That's crazy. They just don't care about him at all.
Dirk Derrick (22:04):
So when you hear politicians and they can't, politicians who are trying to protect insurance companies cannot come out and say, Hey, we don't care about this doctor. We don't care about your house that got destroyed in a hurricane. We don't care about this. They can't do that. All they got is those dang trial lawyers are trying to keep this law in place. They're trying to make money. And the truth is, the trial lawyers are their only people that know the consequences of these law changes. It's just off the radar for everybody else. But they have to point the finger at us. There's nobody else to point the finger at to call bad in this situation.
They say those dang trial lawyers are trying to get laws to protect themselves. People need to realize when they start talking and like I said, they didn't get that law passed. They got some other stuff passed to make it harder for people to collect money, but they did not pass the bad faith thing. But when they start hearing about tort reform, they need to do their own research and see what's going on.
Pearl Carey (23:21):
So you're saying removing the duty to act in good faith and bad faith remedies would tilt the table?
Dirk Derrick (23:27):
Yes. If that law went away, it would do to everyone what it did to this doctor. You'll be playing Russian roulette if you on a policy of insurance in South Carolina. If they did not have the duty to act reasonably and then if they did not have to pay for their unreasonable decisions not to settle a claim, then everybody's at risk. There will be more verdicts against people and businesses and there'll be more assets that people will be going after. And the whole purpose of insurance would be overrid. It would be, it'd be a lot of lawsuit. Maybe we need more lawyers because you'd have to file suit on everything if they have no incentive to pay the fair amount earlier. Think about it. We're doing all these focus groups and showing 'em what people think and it kind of removes their best argument that they're at any good faith because they've always said, well, we just disagree.
(24:19):
We're not at any bad faith. We just disagree. We think that jury in Horry County will believe A, B and C and then they sit back and they watch these jurors talk and they see this data and they don't believe that and you can show 'em. They don't believe that and we can push the button and the leverage when we show 'em the truth. If you did away with their need to act on a reasonable basis and bad faith damages, you could show 'em the truth and they could laugh at you and then he said, we don't care. Go get a verdict and the courtrooms would be packed. They'd wait to get the court would be long. You'd give 'em all the leverage. And I think if they ever take that away and the politicians, and we've got some politicians in Norry County that push this junk and we've got some people who say therefore the people and I hope it's just out of ignorance that they don't understand what the consequence would be.
(25:12):
But when one of their beach homes gets hit over at the beach on a hurricane, you just hope that they get the same treatment from an insurance company that ordinary people get so they'll understand what kind of leverage and what kind of unfair treatment you can take away that leverage for the people. And what I'm saying is it may take somebody who's received donations from the insurance industry and who is now voting with the insurance industry against ordinary people. It may take them going through it and having a big claim or a house or something to see what delays and costs can be added to 'em. Hope anybody goes through it. You'd have to think that they don't understand the potential consequences. I just wish that they could play it out in their heads and what they would feel like if some of the stuff they had in it, the insurance company have so long to respond to demands and they can drag it out by asking for more information.
(26:07):
And I do understand an insurance company's need to have all the information to make a decision, but when you start going down that road and letting them ask for additional information, ask for additional information, ask for additional information, it is part of the stuff that Senator Hawley was pointing out. What they do is delay, delay, delay, reduce, get their adjusters to change their numbers and then deny some of it and all that kind of stuff. It is, as he said, it doesn't seem to be mistakes. It seems to be a systemic problem where they're trying to reduce paying people fair amounts and beating them down. And I believe that goes on. Like I said before, that's why we do focus groups. We try to take away their arguments that that's not a fair amount or that's
Pearl Carey (26:53):
Not what people do. We disagree. Yeah,
Dirk Derrick (26:54):
We try to remove that.
Pearl Carey (26:56):
So industry lobby says that this curbs for fearless lawsuits. Is that true
Dirk Derrick (27:00):
If they're talking about tort reform? It's not true. We have a statute in South Carolina, it's illegal to bring a frivolous lawsuit. The judge can punish somebody bringing up frivolous lawsuit. We get paid on contingency fee base. Why might I bring a frivolous lawsuit? Frivolous meaning it has no validity to it has no value to it. I have seen frivolous lawsuit brought, but most time it's pro se somebody in prison somewhere bringing something or somebody who's representing himself or herself because no lawyer would get involved with it because it's frivolous. But the frivolous lawsuit is the thing they throw out like they do trial lawyer, it's the other bad guy. Frivolous lawsuits don't end up in big verdicts. I don't think people understand all the hurdles you have to jump through to get a verdict and keep a verdict. Quick lesson. You have to get a lawyer to take it and lawyers are either going to take a case on a contingency fee basis or an hourly fee basis, hourly fee.
(27:48):
You don't have to pay a lawyer a lot of money to go file a circuit court action. That is frivolous contingency fee basis. We investigate cases. If it's frivolous, we're not put our time and money behind a frivolous lawsuit. Say you find somebody who will bring it, they bring a frivolous lawsuit, the defense lawyer can then file an action. He can file that this is a frivolous lawsuit should be thrown out. If the judge finds it frivolous, he can punish the person who brought it, throw it out. If he doesn't think it's frivolous but it doesn't meet the standard required by law to bring that particular case, he can throw it out. He can dismiss the case if he gets past that. He said, well, I don't know you. I hadn't seen the evidence. You go get the evidence. Start working up towards trial. The defense lawyer files a motion for summary judgment.
(28:30):
Judge, look at all this evidence. This is all the evidence that exists in the world about this case. It won't support the cause of action he brought. Judge can throw it out, say the judge doesn't throw it out. Well, I don't know. I'm going to let it go to court. The second judge, you got to get passed. Go to court. Plaintiff puts on their case with admissible evidence that the judge allows to come in after the plaintiff puts on a case the defense can file a motion for a directed verdict. Judge, there's not enough admissible evidence that's come into this case that supports the claim that the plaintiff has made. The judge can throw it out, still doesn't throw it out. Next step defense put their case on you make closing arguments, you win the case. Now they've won the frivolous lawsuit, gone through all these judges.
Pearl Carey (29:13):
This is probably years down the line too at this point,
Dirk Derrick (29:15):
Right? Yeah, years down the line. So after the case over, the defense can file a motion that the case should be thrown out by the 13th juror, the judge. Judge could throw it out
Pearl Carey (29:25):
So you could win and then still have it.
Dirk Derrick (29:27):
Oh yeah, and then they can appeal it to the South Carolina Court of Appeal. You got appellate judges. They say, no, that judge was wrong, that judge was wrong, that judge was wrong. We're dismissing this case. We're throwing it out. We're reversing this decision.
Pearl Carey (29:40):
So that's like checkpoints right there. Yeah,
Dirk Derrick (29:43):
But no, they say it's not frivolous. They say the judgment stand. You can peel it to the Supreme Court.
Pearl Carey (29:49):
Just keeps going.
Dirk Derrick (29:50):
So who's going to win a frivolous lawsuit? It's ridiculous. It's the same target as using trial lawyers as the enemy. You use frivolous lawsuits. Enemy frivolous lawsuits aren't paid. Insurance industry is not scared of frivolous lawsuits. The insurance company are scared of real cases that have real value that they won't pay and they want out from the consequences of adding in bad faith.
Pearl Carey (30:15):
Right? So the whole frivolous lawsuit thing is kind of a non-issue here.
Dirk Derrick (30:19):
It's ridiculous. It is absolutely ridiculous.
Pearl Carey (30:22):
So let's say Bill 2 44 came back and it passes. What would everything look like then?
Dirk Derrick (30:27):
Well, the 2 44, the provisions, it had a lot of provisions. There's a lot of things they put in it and I'll go over that in a minute, but let's say the bad faith stuff. Say they passed law that says insurance companies no longer have to act reasonable and if you go get a verdict for more than the insurance coverage, they don't have to pay for it even if they were unreasonable, it's on the person that you sued. So let's think about the consequences. Consequences will be, there'll be more lawsuit. There'll be more cases running through the courthouses that the taxpayers pay. There will be more defendants who will have to sit in court. You have to try more cases. I know that everybody we represent wants the real value of their claim as fast as possible. That'd rather not file a lawsuit. I know that there's nobody I've ever filed a lawsuit against that wants to be sued.
(31:15):
So you got one group of people here that don't want to file a lawsuit. You got another group of people that don't want to be sued and then you got the insurance industry trying to hold onto their dollars and they will let this person sue this person and drag it out for two or three years as long as they can hold onto their money. And so the parties in the action are having to do things they don't want to do because the person who holds the purse is making interest on the purse, is going to try to use the leverage of time, money and uncertainty pays little pop so you have more people being sued and going through the whole process. You'll have more verdicts against individuals. We, because we focus group cases, we don't get to court as much because by the time our case comes up on a roster, we will have focused it enough that we know what the outcome's most likely going to be and we share it with the insurance company and defense and they know what the most likely outcome's going to be.
(32:11):
A lot of times when we're trying cases, it's things that's got some problems and we know from the data it's got problems, but it's hard for us to get a $30 million verdict because we focused it so much and shown the other side from such a long period of time what this case is worth. They'd have paid us 1.2 or 2 million earlier, but if bad faith goes away and they have no incentive to settle, you don't have a lot of people getting sued, a lot of verdicts against individuals and businesses, of course it's going to be backed up. We're going to be trying a lot more cases. It's going to be interesting. It's going to be because right now we have mandatory mediation where you have to have a mandatory settlement. If there wasn't the threat of bad faith and the need to act on a reasonable basis, I can see that's just slow.
(32:57):
That'd be just a waste of time If it would do away with mediation. I think for any lawyer who wanted the real value, it would do away with mediation. So it would have a negative impact on a lot of people and on people that politicians who are voting for it, I don't think they foresee the consequences it would have on people like this doctor in Florence. I think they're thinking these plaintiff's lawyers use bad faith to make these insurance company pay the amount they think fair. Let's do the insurance company in favor and take that leverage off of them, but they don't understand the next step. Who's going to end up paying for it will be people like the doctor. And if you take it to the next level, it can put businesses out of practice. It can cause bankruptcies on cases that should have been paid years earlier for the coverage amount.
(33:46):
Most attorneys who do what I do, most cases will settle for the coverage amount. I mean they will make demands for the coverage and settle for it. You need to do an asset check on the person to show your client. You have to do an asset check on the defendant and show your clients what kind of assets they have so that they can make a decision. But most of the time it was just talking about insurance money. You had to go to court, get a verdict, and you got a verdict against that person. It could hurt the person. I think one of the things they were pushing was after the verdict, the insurance company had so many days that they could pay it keep from adding to bad faith. They'd stretch out bad faith another 60 days after the verdict, give 'em a chance to save themselves before somebody sued 'em for adding unreasonable the whole time, which I guess if they had to pay it, it would be good, but it's also kind of a get out of jail for free card. You know what I mean?
Pearl Carey (34:36):
Yeah.
Dirk Derrick (34:37):
Okay. Now we'll pay. It
Pearl Carey (34:39):
Gives them a heads up. So what can listeners do if tort reform does come back up?
Dirk Derrick (34:44):
I think they can do the homework and try to quit listening to just Talking Heads. Research has never been so easy as it is right now. I mean last year when we had that 2 44, we did a podcast on it, our podcast, what did AI say about 2 44? Not what their lobby said, not what I said as a lawyer. Let's just run it through chat chief BT and have it break down as far as the pros and cons for both sides and who it was going to make life better for. So now you can take bills and you can actually run it through chat GPT and get good summaries and get good pros and cons to let you know what's going to happen so they can do some research. If you get 30,000 feet above the ground and look at what this tort reform laws and stuff, it's no different than anyone who's trying to escape responsibility for their actions.
(35:34):
It happens every day. Just look at the world and you'll see that people do things and then don't want the consequences of their actions. And that's what this is. Here's a typical thing that individuals, it goes the obstacles the individuals face when they have an insurance claim, and you won't ever think about it all at one time, but this is what it's, you have an insurance claim, this insurance you've paid for for all those years, you don't pay for it, you lose it. The law's got to have it. You've been paid for this insurance, you have a claim, they can jump on the claim and properly evaluate it.
(36:23):
Unfortunately, a lot of 'em don't. They drag you out. We need more information, we need more information, we need more information. Where for that we can pay you blank dollars, 10 cents on the dollar, 15 cents on the dollar of what the cases were. We pay you some upfront, we'll pay you a thousand dollars right now. If they see the injuries you had and the kind of impact you have, you don't probably have more damages. They can throw money at you quick to see if people would jump on it. They can drag you out, drag you out, drag you out, and it's almost like playing chicken with you. Let's offer 'em 10 cents on a dollar. Let's offer 'em 15 cents on a dollar. Let's offer 'em 20 cents on a dollar. They know that every one of those steps, there's groups of people who will take it so they buy 'em all.
(37:07):
I personally believe that 95% of people who are injured in South Carolina get bought off a lot less than the case is worth. So they will use their leverage of time, money, and uncertainty and the stigma of bringing a lawsuit because nobody wants to bring a lawsuit and they will start up where they're offering you the money and they're trying to buy you off at every step. If you don't fall for it, if you say, I want money as quickly as possible, I want the real value and you fight it. And if they make you file a lawsuit and they'll make you file a lawsuit because some of the facts you need lies on the other side of the lawsuit because they won't voluntarily get you the stuff. You have to go get it. If file a lawsuit, go get the stuff you build. The case case is now built for value X, they offer you 60 cents on a dollar or you got to go to trial.
(37:53):
They know some people don't want to go to trial. They don't want to go sit in a courtroom and show by their business. So they try another leverage. You go further, you go to trial, you get the verdict, you go all through all of that, you get the verdict and they have to pay you money. When people do that and get the money, their next thing is we need to save our money. So let's go lobby and donate to politicians to make it harder for people in this entire process, we just put 'em through. Let's shorten a period of time that they have to file a claim. Let's lengthen the time we have to respond to a demand to pay them money. Let's drag out, let's get some legal support for us wanting to drag people out and not paying them. So they go get to say it's not unreasonable for them to wait 90 days to respond to your claim even if there's nothing else to be learned.
(38:44):
I mean, the person had a car and they need a replacement car. Well, it's take us 90 days or 90 days without a car, puts a burden on people. They go to politicians and they get help to drag the stuff out. Let's add people who are on the jury verdict. Let's go in there and point fingers at people who aren't on the jury verdict. They know they've gone through in every step of the way. Four lawsuits are filed after lawsuits are filed, trial, everything. They put up obstacle after obstacle. They try to and not be guilty of bad faith when they can't do anything else. They go to politicians and get them put up obstacles for 'em. And that's what they're doing and they're doing it nationwide. It's a huge industry. But the politicians in South Carolina who will support that against the people who live in their districts should be ashamed and the people of their district shouldn't put up with it because they are preventing them from giving them collecting the fair value of their case as determined by jury.
(39:45):
They're trying to make it harder and harder for them to get the fair amount. They're trying to legalize unreasonable conduct and then all the things in the way to get in the way of people collecting. It's their final obstacle if you can beat them. And we know when we do these focus groups, we know what community thinks of the value of a case is and the validity of a case. So now we show 'em we can make 'em pay because we got the leverage of bad faith. So what they do now is go to the politician and say, take away their leverage of bad faith. Make it okay for us to be unreasonable. Make it okay for us not to pay $1.2 million on this doctor's claim and then put a $30 million verdict on him. So that's what it's all about. The politician, the tort reform, that's what it's all about.
(40:32):
Politicians supporting that with central Holly's committee meeting, they're supporting that behavior and it hurts people. What politicians ought to do, instead of doing this tort reform to make it harder on people, they ought to figure out a way instead of legalizing bad faith, they need to come up with a plan to make those who are adding in wrong pay higher premiums. And it shouldn't affect my premiums. If I 37 years been practicing law, my premium shouldn't go up because John Doe down the road has had six legal malpractice cases against Dr. Shop case. Dr. Well, everybody's premium's going up too high. Well, that's politician's fault. Fix it. Make it based on how many claims. If I have a restaurant that serves alcohol and I don't overserve people, why should my premium go up? Because college bar down the road will serve people sloppy, drunk, and to kill people. If you want to do something to help something, go solve the dang problem and raise the premiums on the bad actors and if it puts 'em out of business, so be it. Why is that a bad thing? If I went and committed malpractice over and over and over and my insurance wound up tenfold and I couldn't afford it and I'm out of practice, out of business, good.
Pearl Carey (41:50):
Right? What is that business contributing to the economy or the community? That's how the system should work. Yeah.
Dirk Derrick (41:54):
Well, they still SR 22, it gets more and more expensive. They still spread it out because responsible people still have to cover the people who aren't responsible in every industry. And so it wouldn't have to spread it out. If the people who are committing the reckless conduct were punished bad enough, they would put 'em out of business. But if they got a bar in their district who's serving people drunk all the time, and there's three or four families with people being killed because they leave that bar drunk,
Dirk Derrick (42:32):
Their insurance premium goes up high.
Pearl Carey (42:34):
It's like a natural consequence. Yeah,
Dirk Derrick (42:37):
Natural consequence.
Pearl Carey (42:38):
So Dirk, what would you say are the main takeaways from this podcast?
Dirk Derrick (42:41):
I think number one conclusion is insurance companies will donate to politicians in an effort to override what the communities want. They're trying to override what communities would do in a jury box and who they would hold responsible. And if they've written insurance for those people, they're trying to override it. They're trying to reduce their risk, so they're trying to override what the community want, so they'll pay a politician to override that in such a way that it hurts the person who has the legal claim. I would suggest people when they hear about tort reform and it will come back up. It's coming out all over the country. You can call me. I'll tell you if you're a representative or your senator how they voted on this last time, I'll let you know if they're supporting insurance company against the interest of people and then you can address them.
(43:30):
And I think what I'd love people to tell their politicians, instead of overriding what the community wants to do in a jury box and instead of punishing and making it harder for victims to get what the community wants to do, why don't we figure out a way to punish the wrong doers or to make the wrong doers pay the insurance company more money to have insurance? Why don't you figure that out? The thing about the Dr Shop cases, and they needed to change the liquor liability laws because people were going to bars and they continued to serve when they're drunk, somebody goes to the bar and gets drunk and leaves the bar has no responsibility. If they go out and kill a family, the bar has no responsibility. The only time the bar has responsibility is somebody goes in the bar and gets drunk, is drunk, they keep serving them, he gets drunk or drunker.
(44:16):
Drunker. They keeps serving them. After he is drunk, he goes out and kills the family. Now, the bar and the driver's response, politicians, insurance companies who's been paying these claims and they're paying a lot of them because these people change their conduct and their conduct causes their premiums to go up. The problem is there's bars and there's restaurants that serve alcohol who do it the right way, who cut people off, who don't overserve 'em. They're not college bars that just getting people drunk. They're not places where people go to get drunk. There's restaurants and stuff and their premiums are going up too because the insurance companies are raising premiums on everybody because of these bad actors. I would suggest that people would go to the politician and say, Hey, instead of taking away my rights, if I get hit by one of those drunks, why don't you figure out a way to set premiums so that people who do things right, their premiums don't go up, but the people who do things wrong over and over and over that their premiums go way up and if it puts 'em out of business, it puts 'em out of business.
(45:20):
Who cares? They shouldn't be in business anyway. If Dirk Derrick commits malpractice and comes to work drunk and goes to court and lose cases because I'm intoxicated, I'll get reported to the bar. My insurance premiums don't go up, and if I do it over and over and over, other lawyers should not have to increase their premiums because I'm over here getting drunk, going to court, committing my practice. Mine should go up and if it puts me out of practice, it puts me out of practice. And I don't understand why that is such a hard concept that in an industry, the people who are doing it right shouldn't have to pay higher premiums because the people who are doing it wrong, and if the people in that industry are injuring the public, public shouldn't have to pay and lose their benefits because we're worried about their insurance premiums go up.
(46:08):
That would be my suggestions for people to have the conversation for people to have with their politicians, do this instead of protecting the insurance industry. Go figure out a solution. If it comes up next year, we'll do another podcast on it. You can contact me if you're interested in it and we'll put the pros and cons in what they're trying to do next. It's going to be a continued fight. I've always been very nonpolitical as far as getting involved with stuff, but they're getting me fired up. I think more people are seeing it. I was very proud of Senator. I hawley up in Washington having a committee sub hearing Senator Holly having a hearing on what was happening to people and kind of make it public. But that's what I advise people to do. Know what law is, what they're trying to pass, why they're trying to pass it, learn about it, ask me about it, but do their own research instead of listening as talking heads and know that all trial lawyers aren't bad.
Pearl Carey (47:02):
Well, thank you so much for that outro, Dirk. We obviously learned a lot today on this episode of The Legal Truth. Thank you to all of our listeners for tuning in and we will see you next time.
Voieover (47:16):
Thank you for joining us on The Legal Truth Podcast. If you have questions that you would like answered on a future episode, please send them to the legaltruth@derricklawfirm.com. If you would like to speak to us directly, call us at two four eight seven four eight six. If you find the podcast valuable, please leave us a five star review and share the legal truth with your neighbor, friend, or family member who is seeking reliable information about a South Carolina personal injury or workers' compensation claim. Dirk J. Derrick of the Derrick Law Firm Injury Lawyers is responsible for the production of this podcast located at 901 North Main Street, Conway, South Carolina. Derrick Law Firm Injury Lawyers has included the information on this podcast as a service to the general public use of this podcast and any related materials does not in any manner constitute an attorney-client relationship between Derrick Law Firm Injury Lawyers, and the user.
(48:09):
While the information on this podcast is about legal issues, it is not intended as legal advice and should not be used as a substitute for competent legal advice from a licensed professional attorney In your particular state, anyone seeking specific legal advice or assistance should retain an attorney. Any prior results mentioned, do not guarantee a similar outcome. The content reflects the personal views and opinions of the participants in the podcast and are not intended as endorsements of any views or products. This podcast could contain inaccuracies. The information contained in this podcast does not constitute legal advice and is not guaranteed to be correct, complete, or up to date. As laws continue to change. In this podcast, you'll hear information about focus groups. Please note that not all of the firm's cases are presented to a focus group. Additionally, when speaking about juries or jurors in relation to a focus group, we are speaking of focus group participants and not actual trial juries or jurors.
