In a Kansas case in Federal Court, the standard of Bad Faith liability included whether the Third-Party, or Liability, Insurance Company preferred its own interests to those of its Policyholder. The Tenth Circuit Court of Appeals held that a Jury could conclude that that was so, based on the evidence in the record. Roberts v. Printup, Download Roberts v. Printup (10th Cir. Case No. 08-3189, Opinion Filed February 17, 2010). also published as 595 F.3d 1181 (10th Cir. 2010)(Westlaw subscription required to access Westlaw). The evidence in the record was that the Defendant did not have a system in place to respond promptly to time-limit settlement demands. The Tenth Circuit concluded that a Jury could determine that this constituted a preference for saving money in not having systems in place to deal with these situations, over protecting the interests of Policyholders in having a system, any system, that may not guarantee but certainly would help to assure timely responses to time-limit settlement demands.
The prevailing standard of negligence liability is whether the Defendant breached a duty of ordinary care, which includes care exercised by other people under similar circumstances. Exxon Mobil, for example, reportedly has systems in place to insure that top management is informed, and ultimately makes the decisions regarding a fix, of a deepwater oil spill. If the Congressional testimony of BP's current CEO is taken at face value, BP does not have any such system in place and he, the BP CEO, "did not know" of many problems in the Deepwater Horizon deepwater oil spill nor did he know of many decisions before and after that spill, in basic terms. A respected newspaper financial columnist concludes that, compared to the system in place at Exxon Mobil for example, this alone is evidence of BP's culpable negligence concerning the Deepwater Horizon oil disaster. "That Mr. Hayward and his top deputies knew nothing about the problems on the Deepwater Horizon well is, by itself, a serious act of negligence." Joe Nocera, "Talking Business/BP Ignored The Omens Of Disaster" p. B1, col. 1 (New York Times Nat'l ed., "Business Day" Section, Saturday, June 18, 2010). [Emphasis added.]
And a Bad Faith Case shall lead them to a new view of systemic liability. Perhaps. And if there is to be a new way of looking at systemic liability for Insurance Companies and for Oil Companies, can Financial Disasters caused on Wall Street be far behind?
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