Yale educated Magistrate Judge Gary R. Brown issued a blockbuster discovery ruling which will have ramifications for insurance litigation far past Superstorm Sandy flood cases. He is requiring insurers to turn over "drafts" of engineering reports.1
In Financial Pressure on Insurance Vendors and Experts, I noted the following:
With this type of claims gamesmanship, policyholders don’t stand a chance of receiving the full benefit of the process. I noted that consumer protection laws are paramount to insurance profits derived wrongfully and unethically in Frank Artiles Responds to Post as Florida Insurance Politics Starts to Heat Up — this is an example of how profits can be derived in a wrongful manner.
The problem is that this type of evidence is difficult to obtain. Nobody is going to advertise or publicly announce that they are coercing this type of behavior or doing it as a result of financial pressure. Nobody wants to admit to themselves that they are participating in an unethical game where they are trying to appear to provide full indemnity, but purposefully using methods to prevent it. Nobody wants to admit to being the "bad guy."
One simple step to help prevent these common activities would be to give policyholders a copy of the insurance company claims file and the entire file of the experts and vendors, including drafts. California currently allows policyholders to obtain the claims file by law before any litigation. Transparency is a wonderful tool if honesty is a significant value.
I am not close to being one of the smartest guys on the block. It is nice to see a jurist who most consider as "a smart judge" come to a similar conclusion for many similar reasons. His Order is a must read for all participating in insurance litigation.
My hat is off to Steve Mostyn, Rene Sigman, and their crew for helping the policyholders when this issue was raised. They were not the original policyholder counsel battling the flood insurance attorneys.
I previously noted this case in Fraudulent Superstorm Sandy Flood Expert Reports. There are many issues discussed in the Order, which I will comment upon later. But since it is a "must read," start reading.
1 Raimey v. Wright National Flood Ins., No. 14-CV-461 (E.D.NY Nov. 7, 2014).