MSC decision has started a fissure in insurance companies first line of defense

Posted By Steven Whitman || 23-Sep-2014

A recent Massachusetts Superior Court decision has started a fissure in insurance companies' first line of defense when they try to withhold defendant's statements from injured parties, claiming that the information is privileged because it was “prepared in anticipation of litigation.” In the case of Walsh v. Wong Superior Court judge Dennis Curran found that statements made by a customer to her claims representative from Liberty Mutual would not be afforded the same protection as statements made to an attorney. After an automobile crash, the customer gave conflicting accounts of the accident. Due to these inconsistencies the statements of the customer became more probative. The plaintiffs' attorney sought to obtain the prior statements but her insurance lawyer claimed that they did not need to provide the statement as they were prepared in anticipation of litigation. The issue was presented to Judge Curran. Judge Curran ruled that Liberty Mutual was required to reveal their customer's statements to the plaintiff's attorney. The judge wrote in his decision,…”The routine taking of a statement by an insurer after an accident is performed in the ordinary course of the insurance business, to assess liability, determine, in part, whether a surcharge should be imposed and is directly and obviously related to the furtherance of an insurance company's financial purpose: to make money…Taking an insured's statement assists in its annual actuarial calculus.”

Hopefully, this decision will start the beginning of more open disclosures by insurance companies.