ARBITRATION, INSURANCE POLICIES, AND INSURANCE BAD FAITH CLAIMS.

In Crescent City Brewhouse, Inc. v. Indep. Spec. Ins. Co., NO. 23-7366, 2024 WL 640005 (E.D. La. Feb. 15, 2024), a Senior District Judge ruled on an insurance company's unopposed motion to compel arbitration of insurer bad faith claims and alleged violations of Louisiana Statutes, among other claims.  Following the Federal Arbitration Act and prevailing Fifth Circuit case law, the Federal Court noted that "[n]either party has asserted an external legal constraint that forecloses arbitration[.]"

          Parenthetically, of course the carrier that filed the motion to compel arbitration did not assert an external legal constraint to arbitration.  What a wonder it would have been if it had.

          That leaves the policyholder which filed the bad faith claims and the policyholder did not assert an external legal constraint to arbitration of those claims, either.

          In a forthcoming article in New Appleman on Insurance:  Current Critical Issues in Insurance Law, the author examines significant potential, external legal constraints to arbitration of insurance bad faith claims.  Whether you represent insurance carriers or policyholders, be on the lookout for the article and for significant potential constraints that might be raised to insurance arbitration.

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