Duration and Resolution of Bad Faith Lawsuits in Texas

June 14, 2023

Influential Factors in the Duration and Resolution of Bad Faith Lawsuits in Texas

When an insurance provider breaches its duties to clients in Texas, costly and drawn-out legal disputes called bad faith lawsuits may ensue. An in-depth knowledge of the legal system, as well as the variables affecting the length and outcome of these cases, is essential for their resolution.

As you read on, we will examine the elements that affect the length and outcome of bad faith cases in Texas and emphasize the importance of working with a Callender Bowlin attorney to successfully handle these challenging legal matters.

Understanding Bad Faith Lawsuits

A bad faith lawsuit is a civil action for damages filed by the plaintiff against the defendant after the defendant violated a legal or contractual obligation to treat the plaintiff fairly, resulting in the plaintiff’s loss.

If you file a bad faith lawsuit after the statute of limitations has passed, you will forfeit your right to compensation. The laws in each state vary, but timeliness is vital.

Texas law limits the amount of time you are allowed to file a lawsuit for a bad faith claim to two years. The two-year window starts on the following date: The occurrence of unfair business practices, unfair or deceptive acts, or both.

Legal Requirements

The policyholder must demonstrate that the defendant acted unreasonably and contrary to the implied obligation of good faith and fair dealing for them to support a bad faith claim. It is frequently necessary to provide proof of their willful or negligent violation of the policyholder’s rights.

Willful misconduct versus bad faith

Subjective bad faith takes the form of willful wrongdoing. In spite of having an obligation to act, it is either doing so or not doing so while fully aware of the repercussions and either desiring them to occur or not caring if they do.

Bad faith implies that the defendant operated maliciously, and frequently necessitates that you allege a precise set of facts to support your claim. The elements of malice or recklessness are present in both willful misbehavior and bad faith, thus courts can enforce punitive penalties for the benefit of society.

Types of Bad Faith Lawsuits

Several insurance products, including auto insurance, homeowner’s insurance, health insurance, and others, may give rise to bad faith claims. Allegations of claim denials, arbitrary delays, insufficient investigation, inability to settle within policy limitations, or dishonest business tactics by the insurance provider may be involved.

Influential Factors in Duration and Resolution

Factors Affecting Duration

  • Case Completion Rate

The length of bad faith litigation can be considerably influenced by its intricacy. With regard to the considerable legal research and discovery procedures necessary, cases comprising several parties, complicated legal concerns, or significant monetary claims frequently take longer to settle.

  • Court Backlog

The length of a bad faith litigation can also be impacted by the backlog of cases in the legal system. The length of the litigation may be increased if the courts are overburdened with pending cases as this may cause delays in setting hearing dates and securing trial dates.

  • Discovery Process

The discovery procedure, which entails compiling relevant data and evidence, might take a while. The discovery process frequently includes depositions, the production of documents, and expert testimony, all of which can lengthen litigation.

Factors Affecting Resolution

  • Negotiation Strategies

The parties’ negotiating tactics can have a big impact on how a bad-faith case is resolved. Negotiators with experience who can successfully represent their client’s interests and consider options for settlement might get to reach an agreement earlier.

  • Strength of the Argument

The outcome of the case may be influenced by the quality of the evidence in favor of the policyholder’s claim or the defendant’s response. Strong evidence may force the parties to reconsider their views and increase their likelihood of reaching a settlement.

  • Court Procedures

The outcome of bad faith cases may be influenced by the particular court regulations and processes in Texas. Alternative conflict resolution techniques, like mediation, which may quicken the resolution procedure, may be encouraged or mandated by some courts.

Texas’s Extra-Contractual Liability in Third-Party Context

Despite being almost fifty years old, the Texas case Stowers Furniture Co. v. American Indemnity Co. continues to be cited as the one that best explains the obligations of the insurer in third-party situations. When a third-party claimant proposes resolving a disputed claim within the policy limits and the insurer declines the offer, the Stowers doctrine applies.

The policyholder must demonstrate that the insurer was negligent in refusing an agreement with the claimant for an amount that is within the policy limitations in accordance with the Stowers doctrine. In the event of its triumph, the policyholder may be entitled to compensation from the insurer in exceeding of the policy’s limitations.

The Stowers doctrine has been honed in four instances. An example would be the first case, Highway Insurance Underwriters v. Lufkin-Beaumont Motor Coaches, which made a distinction between the alternate good faith test and the negligence threshold used by Texas courts. Since an insurance provider acting in good faith may transgress the “due diligence” element of the negligence standard, the Stowers standard for negligence is substantially tougher than the good faith requirement.

The Significance of Hiring a Lawyer from Callender Bowlin

A group of seasoned attorneys with experience in addressing bad-faith litigation works for Callender Bowlin. Their knowledge of this field of law permits them to successfully handle the intricate details of these issues and fight for the interests of their clients.

Moreover, knowing Texas’ laws and rules well and out is essential for navigating the state’s judicial system. Callender Bowlin’s attorneys have an in-depth understanding of Texas regulations, court processes, and precedents, which enables them to offer strategic guidance along the legal proceedings.

Last but not least, Callender Bowlin’s bad faith insurance attorneys have a lot of trial experience, particularly in bad faith acts. They are knowledgeable about the methods used by defendants and are capable of creating a strong legal defense to effectively combat those strategies.

Frequently Asked Questions

How long does the average Texas bad-faith lawsuit last?

The length of bad faith litigation in Texas can vary greatly based on several variables, among them is the intricacy of the case, the backlog in the courts, and the nature of the negotiations. While some instances may be resolved in a matter of months, others can take many years.

What types of damages are recoverable in a bad-faith lawsuit?

In a bad faith case, policyholders might ask for various damages, comprising actual damages (which may include the amount of the claim), consequential damages (things like monetary losses brought on by the defendant’s misbehavior), and perhaps even punitive penalties for penalizing them.

How much does it cost to retain legal counsel for a bad faith claim?

The expense of retaining legal counsel for bad faith litigation might change depending upon the case’s complexity, the lawyer’s expertise, and their fee arrangement. To evaluate the case and negotiate their fee arrangements, which could involve contingency fees, hourly rates, or a mix of both, many lawyers give an initial meeting at no charge.

Is it possible for me to handle a bad faith lawsuit on my own?

While it is possible to manage a bad faith case without retaining legal counsel, doing so can be difficult and dangerous. Defendants like insurance providers have legal departments devoted to fighting these claims, so trying to navigate the legal complexities without competent legal counsel may greatly reduce the chances of prevailing.

Fight for your bad faith lawsuit with CB Trial

The length and outcome of bad faith cases in Texas can be determined by various circumstances, making them lengthy and filled with legal conflicts. Employing a lawyer from Callender Bowlin can be very advantageous for policyholders as they can successfully manage these legal problems with their experience, legal knowledge, and understanding of Texas law. Policyholders can improve their chances of winning by being aware of the important issues that affect bad faith cases and hiring legal counsel.

For a no-obligation, private consultation if you suspect you could have a bad faith claim against an insurance provider or a company, simply get in touch with CB Trial at (713) 955-9719 or via our secure form.