A British case raises an intriguing question for American insurance bad faith litigation.
Under British law, a bank has a duty to act in the best interests of its customers. The Nigerian government is suing JPMorgan Chase on the ground that the bank allegedly obeyed the instructions of corrupt former officials to transfer some $900 Million to them from a Nigerian government bank account maintained at JPMorgan Chase in London. The Nigerian government is of the opinion that this was against the best interests of the bank's customers, the people of Nigeria.
JPMorgan Chase is defending this complicated case on many grounds. One of its defenses raises the intriguing question that may have some resonance in American insurance bad faith lawsuits: JPMorgan Chase is defending on the basis that its contract setting up the Nigerian government account provided that JPMorgan Chase could act against the best interests of the bank's customers, the people of Nigeria.
Does this mean that an insurance carrier in the United States could insert a provision in its insurance policy that, effectively, it could act in bad faith and deal unfairly with its insureds?
Well, returning to the lawsuit in the U.K. for a moment, the British judge so far is allowing the Nigerian government's lawsuit to proceed against JPMorgan Chase. Its contract provision has not prevented that, at least so far. See Emily Flitter, Nigeria Sues JPMorgan to Recoup $900 Billion, New York Times, Monday, April 1, 2019, p. B1 (no online version found; when posted online the New York Times may charge for online access to this article).
As for the question of an American insurance carrier inserting a provision in its insurance policy to disavow any duty of good faith and fair dealing, there is some authority on that. We will take a look in future articles posted here.
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