Bad Faith Secrets and Protective Orders  | Property Insurance Coverage Law Blog

The insurance claims industry constantly fights to keep policyholders and the public from knowing about any bad faith actions by insurers to delay, deny and underpay claims. As with any malicious actor, secrecy of wrongdoing is an essential element in avoiding accountability. We noted this reason for secrecy in Trade Secrets: Dynamite Discovery Decisions, Part 11.

In his excellent Blogclaims adjuster Denis Wall wrote about the secrecy of wrongful claims practices. He highlighted a recent case¹ where Oklahoma policyholders successfully gained standing to challenge the secrecy of key documents and evidence of bad faith conduct in Trial Court Redoes Sealed Documents in Insurance Bad Faith Case. He underlined the importance of the case:

This ruling that non-parties to an insurance bad faith lawsuit have standing to assert public access to documents involved in that lawsuit is potentially important for other insurance bad faith lawsuits. insurance in other jurisdictions in which trial courts have entered protective orders prohibiting the disclosure of these documents in similar cases. .

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Like the Newbys, non-parties to bad faith litigation in other jurisdictions may win the battle but lose the public access war, so to speak – but the possibility exists for public access to documents filed in public court records in each case, and that’s how it existed. here. More importantly, for other disputes, non-parties have standing to sue to demand public access in insurance bad faith litigation if this ruling is followed elsewhere in this regard.

The circumstances surrounding these actions led to a $25 million settlement with the State of Oklahoma, as reported in Hot off the press: Farmers to pay Oklahoma policyholders $25 million for earthquake claims. Discovery in an insurance bad faith case is often a game of “hiding the evidence” on the part of the insurance company trying to prevent disclosure of the incriminating evidence. If this were a criminal matter rather than a civil one, it would be called “obstruction of justice.”

Thought of the day

The world’s greatest evils will not be committed by men with guns, but by men in suits sitting behind desks.

—Hannah Arendt

¹ Good vs. Farmers Ins. Co.536 P.3d 961, 2023 WL 5951464 (Okla. Civ. App. Feb. 15, 2023).