Monthly Archives: May 2014

Sanctions Should Punish Abuse, Not Be Abusive Themselves

Judge sanctions insurer $50K because its lawyer couldn’t settle dog-bite case for $750K.

The above article from should discourage all attorneys who represent insured defendants and insurance carriers.  If a carrier and counsel consult ahead of a settlement conference to set a valuation and to confirm an outer limit of settlement authority, then the court should not impose sanctions unless the evaluation or authority were unreasonable and showed a lack of a good faith intent to negotiate.

If an injured party has $75,000.00 of special damages, then $600,000.00 of settlement authority is certainly reasonable.  If the carrier limited authority to less than $100,000.00, for example, then the judge may have grounds to sanction the carrier, but this decision on sanctions indicates that the judge may have been more of an advocate for the injured plaintiff rather than a neutral settlement conference judge.

Sanctions should be a rare punishment for abuses of the judicial system and its processes, not to extract money from an insurance carrier that is offering eight times the special damages to settle a personal injury action.