Recently, the Massachusetts Appeals Court has decided that if an insurance
company unreasonably delays a reasonable settlement in a
personal injury case thereby forcing an injured victim to litigate the case, the insurance
company may be responsible for any litigation expenses incurred by the
injured person's attorney after the settlement offer should have been
made. The reason for the reimbursement of expenses by the insurance company
is that such conduct in the failure by an insurance company to settle
a claim timely could be construed as a violation of the Massachusetts'
Consumer Protection statute, M.G.L.c. 93A.
In Martinez Rivera et al v. Commerce Insurance Company et al, the court
held that litigation expenses, such as expert video depositions, fees
to certify medical records, and preparation of trial exhibits, were foreseeable
c. 93A damages. The court found that an insurance company violated not
only c. 93A but also the Bad Faith Insurance statute, M.G.L.c. 176D when
it forced the plaintiff to litigate a case until the eve of trial when
it finally offered the policy limits.
Such trial preparation expenses, the court found, are foreseeable consequences
of the insurance company's failure to timely settle the case. M.G.L.c.
93A also allows for a judge to double or triple the damages. In this case
the costs were tripled as penalty against the insurance company.