PCI says Minnesota bad faith bill favors attorneys over consumers

Jan. 1, 2020
Minnesota lawmakers are considering legislation that would boost attorney benefits over consumer interests and open the door to excessive litigation, according to the Property Casualty Insurers Association of America (PCI).

Minnesota lawmakers are considering legislation that would boost attorney benefits over consumer interests and open the door to excessive litigation, according to the Property Casualty Insurers Association of America (PCI).

SF 528 allows for attorneys’ fees and 7 percent annual interest on amounts due for an insurer’s breach of contract. It passed the Senate Commerce and Judiciary Committees, and its companion bill, HF 417, passed the House.

The Senate Commerce Committee had substituted softer language endorsed by the Minnesota Chamber of Commerce into the bill and removed the language allowing attorneys’ fees, but the Senate Judiciary Committee reversed that action and added the allowance for attorneys’ fees back into the bill, PCI said

“This legislation simply layers on the ability to collect extra-contractual damages, attorneys’ fees and interest,” says Ann Weber, PCI vice president, regional manager and counsel. “The insurance industry is already operating under the regulations of the ‘bad faith’ bill that was signed into law last year. This measure is extremely one sided in favoring plaintiffs and is another example of trial lawyer attempts to expand their ability to bring lawsuits on disputed insurance claims.”

PCI will be working to help members of the Minnesota Senate better understand the consequences associated with the bill.

“This bill brings ‘bad faith’ legislation to a whole new level,” says Weber. “It adds even more incentives for attorneys to bring secondary lawsuits, and consumers would end up paying the price.”

PCI said it has been successful in combating bad faith bills in other states.

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