On Tuesday, Washington voters approved a measure to allow plaintiffs to receive treble damages from claims alleging bad faith claims handling by an insurer. This is a marked increase from the current law that limits recoveries resulting from bad faith of an insurer to the actual damages incurred. The measure applies to auto, home, business, property and long-term care policies, but not to health insurance policies, which are covered under a separate consumer protection statute.
The measure, known as Referendum 67, triggered a public relations war between trial lawyers and property casualty insurers. Opponents argued that passage of the ballot measure will increase the incentive for frivolous lawsuits brought on by trial lawyers, which will in turn clog the courts and result in additional litigation costs that will ultimately be passed on to consumers in the form of higher premium rates. Those in support of the measure consider it to be a much needed tool to force the hand of large insurers to pay claims rightfully due under policies of insurance.