As 2014 comes to a close, here are a few observations on key trends I’ve seen in insurance class actions (and class actions more broadly) over the last year:

  • Changes in the law have frequently led to new class action filings. Most insurers are large organizations, and changing daily practice across a claim or underwriting department can be challenging, and take time. When a state supreme court changes the law, or makes new law in an area where there was none, or when an insurance department issues a new regulation, and the insurer does not conform to the new law quickly, or arguably makes the change incorrectly, or fails to make changes retroactively (if required), that has frequently led to new class action filings. These are difficult (in some cases impossible) events to anticipate (unless you are following other insurers’ key cases closely), and difficult to react to. But if I were running an insurance company’s law department, I’d make that a priority.
  • Class action settlements are becoming more difficult. Judges are scrutinizing them more carefully. Especially the attorneys’ fees. If you’re in the Seventh Circuit, Judge Posner seems to hardly ever find a fee award he likes. And plaintiffs’ lawyers may try to drive up the overall settlement cost to the defendant in order to garner more fees. The options going forward, as I see them, are two-fold. First, defendants can agree to a settlement that provides reasonable and fair relief to the class, and leave the fee award to the judge. If you trust the judge. Second, make a fair deal for the class and negotiate very aggressively on the fees. Good plaintiffs’ lawyers probably know that they will not get the same fee in a federal court they might have gotten ten years ago. And if their chances of class certification are not very strong, they probably do not want to invest all of the time and effort that will be required to get the chance to roll those dice.
  • Creativity matters. The old, “tried and true” method of defending these cases – throwing in the kitchen sink of potential individualized issues and variations — may not be the best strategy in 2014 or 2015. Not all variations necessarily make a difference. But don’t be afraid to make arguments that have not been made before. You need to know the case law inside and out and dig deeply into the facts to demonstrate how the case will be tried. It’s not quite as hard for courts to envision how these cases will be tried because more of them (although still a very small number) are actually being tried, including some prominent, high-stakes ones.

On another note, in case you are interested, I will be a panelist for a CLE webinar on “Defending Class Actions Using Absent Class Member Discovery,” on January 13, 2015 at 1pm Eastern. For clients and friends, I have a small number of free registrations, and when those run out I can offer a reduced cost registration, just e-mail me.

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Photo of Wystan Ackerman Wystan Ackerman

Wystan Ackerman is a partner in Robinson+Cole’s Insurance + Reinsurance Group and handles a diverse range of property insurance litigation, including large business interruption cases, class actions, other complex litigation, and appeals. He also has substantial experience representing insurance companies in putative class…

Wystan Ackerman is a partner in Robinson+Cole’s Insurance + Reinsurance Group and handles a diverse range of property insurance litigation, including large business interruption cases, class actions, other complex litigation, and appeals. He also has substantial experience representing insurance companies in putative class actions involving homeowners’ insurance coverage and market conduct/claim-handling practices. He has been prominently involved in high-profile property insurance litigation concerning the September 11th catastrophe and Hurricane Katrina, and Chinese-made drywall. Based in the insurance capital of Hartford, Connecticut, Wystan writes the blog Insurance Class Actions Insider, which was selected by Lexis Nexis as a top insurance blog for 2011.

Wystan grew up in Deep River, Connecticut, a small town on the west side of the Connecticut River in the south central part of the state. He always had strong interests in history, politics and baseball and his heroes growing up were Abraham Lincoln and Wade Boggs (at that time the third baseman for the Boston Red Sox). Wystan says it was his early fascination with Lincoln that drove him to practice law. As a high school senior, he was one of Connecticut’s two delegates to the U.S. Senate Youth Program, which further solidified his interest in law and government. He went on to Bowdoin College, where he wrote for the Bowdoin Orient and majored in government. After Bowdoin, he went on to Columbia Law School. He also interned in the chambers of then-Judge Sonia Sotomayor on the Second Circuit. Wystan graduated from Columbia in 2001, then worked at Skadden Arps in Boston before returning to Connecticut and joining Robinson+Cole.

When Wystan’s not at his desk, flying around the country trying to save insurance companies from the plaintiffs’ bar, or attending a conference on class actions or insurance litigation he often can be found watching “Dora the Explorer” or reading or playing whiffleball with his young daughter, helping his wife with her business, Option Realty, reading a book about history or politics, or watching the Boston Red Sox.

Read Wystan’s rc.com bio.