Avoiding Litigation Thread.

[Timothy J. Gardner]

Joe,

I think you use the term "meritorious" deleteriously. Insurance companies often settle because it's cheaper - thereby sacrificing the inspector's good name in the name of economy. THAT'S why Tort reform is needed!

tg

[rwand1]

Well in Mr. Cookes case he is going to have to represent himself from what we all know is a latent defect well outside his experience and that of the SOP. There is no way any competent judge would side with the litigant given what the standard of the profession is.

The litgant will also have to prove his claims that Mr. Cooke was negligent. How will they prove that when it is hidden defect, and is well beyond defendable SOP's? The lawyer in my opinion is wasting his clients money and the client is naive too.

[Joseph Hagarty, CMI]

Originally Posted by tgardner

Joe,

I think you use the term "meritorious" deleteriously. Insurance companies often settle because it's cheaper - thereby sacrificing the inspector's good name in the name of economy. THAT'S why Tort reform is needed!

tg

Timothy:

Insurance Companies represent You.

They only settle a claim against your wishes if you let them.

Forcing them to do their job demonstrates that Expedience is not necessarily Cheaper.

Forcing them (Insurers) to do their job exposes the level of their Competence / Incompetence in Claim handling.

[Keith Swift, PhD.]

Joe, I respect your defense of the legal profession, and I’m sure you believe that what you’re saying is true, but please don’t expect the average inspector to believe that only meritorious attorneys remain in business, or that justice prevails in our industry. The sad truth is that ninety-five percent of all cases against inspectors are settled before they ever get to court, and only when the attorneys on both sides have made a decent amount of money. And not one inspector that I’m aware of has ever been compensated for time and money lost. My first insurance company cancelled my policy following two frivolous and groundless lawsuits, despite a letter from my attorney proclaiming my innocence. And you can read about my latest frivolous lawsuit, which I documented with actual emails, which I posted on the NACH message board under the title “Perfectly Legal Extortion.” And this is just my experience, but I can provide case numbers of many other suits that have made a laughing stock of justice. I didn’t choose to be the voice of dissent, I started out by reporting on injustices that I was aware of, and then wanted to encourage Nick to provide a forum in which inspectors could help each other to avoid litigation. I don’t have any magical solution, but if this can be accomplished with better disclaimers, or with more proactive narratives, such as those that I posted regarding “sewer mains,” and “copper naphthenate,” so be it. Like you, I spent a number of years in the ivory towers of academia, but I’ve been down in the trenches for awhile, and know what it’s like to come under fire. And, ever since 911, I’ve been longing to see justice against terrorism, foreign or domestic. If you’re really interested in learning something more about justice, I recommend that you read a book by one of my heroes: The Death of Common Sense, by New York attorney Philip K Howard. It will leave you giggling in disbelief, or shaking you head in despair. Meanwhile, praise the Lord, and pass the ammunition. PS Let’s have a beer at the next convention and discuss the trial of O.J. Simpson, and the merits of British common law.

[rwand1]

They only settle a claim against your wishes if you let them

I think you will find that if the insurer could have settled for a lesser amount and you refused and it goes to as to court as it likely would because you would not agree to settlement/awards, you the inspector will be paying the difference.

Your insurance premium is only as low as your claim frequency.

[jferry]

Originally Posted by tgardner

Joe,

I think you use the term "meritorious" deleteriously. Insurance companies often settle because it's cheaper - thereby sacrificing the inspector's good name in the name of economy. THAT'S why Tort reform is needed!

tg

By meritorious I mean cases that, if tried, would result in a verdict for the plaintiff. In other words, the charge of negligence would be vindicated.

Cases are settled because it makes economic sense to settle them. For all sides. Moreover, the release generally contains a denial of liability clause and a clause that states that the claim is merely being settled as a compromise. That preserves the good name of the inspector, doctor, lawyer or whatever professional is settling. You can even get a confidentiality provision.

Insurers try cases that have no merit. There is no financial upside to settling those cases. In twenty years of trying cases, I have never, repeat never, seen an instance where an insurance company settled a meritless case and I have the defense verdicts to prove it.

[jferry]

Originally Posted by rwand1

I think you will find that if the insurer could have settled for a lesser amount and you refused and it goes to as to court as it likely would because you would not agree to settlement/awards, you the inspector will be paying the difference.

Your insurance premium is only as low as your claim frequency.

And that's as it should be. If an insurer refuses to settle a case within the policy limits and the trial results in a verdict that exceeds the insured's policy limits, the insurer is on the hook for the deficiency.

[Bruce A. King]

After reading this thread I think maybe Joe could provide some insight as to the differences in report disclaimers and report recommendations. I believe many inspectors do not realize the differences.

It is important to inform your client in writing of their other options that are outside of the SOP's on each house inspected. This includes a general recommendation for mold inspections, radon inspections, termite inspections, video scanning of chimneys and sewer pipes and lead paint tests (on older homes). This leaves the decision soley with the client. Note that the above is not a disclaimer but a recommendation and will serve you and your clients much better than written efforts at "not being responsible".

[jferry]

Originally Posted by bking

After reading this thread I think maybe Joe could provide some insight as to the differences in report disclaimers and report recommendations. I believe many inspectors do not realize the differences.

It is important to inform your client in writing of their other options that are outside of the SOP's on each house inspected. This includes a general recommendation for mold inspections, radon inspections, termite inspections, video scanning of chimneys and sewer pipes and lead paint tests (on older homes). This leaves the decision soley with the client. Note that the above is not a disclaimer but a recommendation and will serve you and your clients much better than written efforts at "not being responsible".

I think that they are two sides of the same coin. You certainly have to disclaim items not contemplated by the SOP and items that you are not qualified to opine upon. It is likewise a good idea and a good defense, should the need arise, to recommend further inquiries by a qualified professional in the appropriate trade.

[mcraig]

I am with K. Swift on this.
I want to offer something to all of you to think about. Here in Arizona there is an interesting thing happening in legal matters against HI's. The lawyers are finding several Hi's that would know something because they use thermal imaging equipment or high tech equipment. All of the HI's out here don't have this equipment, But if you miss something that another HI would of found with High Tech equipment you loose even if you follow an SOP that says you don't look at that.
It has come to the point that you can be sued for anything and if the opposing side can come up with several of your local HI's that agree with them you will loose.
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[rwand1]

Something does not equate. If you can be sued for anything what good is another disclaimer when you can be sued for anything? Disclaimers do not any good til it gets to the court to decide or there is comprimise before then.

People who sue most often have not acted on advice given. That is not the inspectors fault. Nor is the inspector at fault for people who do not read the report. It is amazing to see how the fault of the inspector can be embellished by an angry purchaser. Believe me they will think of everything they can allege, even though its in the report. It is nonsense, and I think it has to equate with common sense.

[jferry]

Originally Posted by mcraig

I am with K. Swift on this.
I want to offer something to all of you to think about. Here in Arizona there is an interesting thing happening in legal matters against HI's. The lawyers are finding several Hi's that would know something because they use thermal imaging equipment or high tech equipment. All of the HI's out here don't have this equipment, But if you miss something that another HI would of found with High Tech equipment you loose even if you follow an SOP that says you don't look at that.
It has come to the point that you can be sued for anything and if the opposing side can come up with several of your local HI's that agree with them you will loose.
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That's a familiar situation that arises every time there is a technological advance in any profession. If the reasonable HI is using this equipment, then that becomes the standard.

RR has written extensively on his tiered pricing approach to inspections. If you want a regular old inspection, it's going to cost X. If you want the super-duper inspection, it's going to cost 3X.

You have to factor these cirumstances into your pricing. Otherwise, you are leaving yourself vulnerable to a lawsuit if the defect would have been found had you used this equipment.

[jferry]

Originally Posted by rwand1

Something does not equate. If you can be sued for anything what good is another disclaimer when you can be sued for anything? Disclaimers do not any good til it gets to the court to decide or there is comprimise before then.

People who sue most often have not acted on advice given. That is not the inspectors fault. Nor is the inspector at fault for people who do not read the report. It is amazing to see how the fault of the inspector can be embellished by an angry purchaser. Believe me they will think of everything they can allege, even though its in the report. It is nonsense, and I think it has to equate with common sense.

Raymond -

You are correct. The disclaimers provide a defense to the plaintiff's claims. They do not insulate you from lawsuits.

[Keith Swift, PhD.]

I hope that this forum will become a place in which inspectors can learn the myriad ways in which they can avoid litigation, and not a place in which we debate legal and ethical issues. It really doesn’t matter what’s right and what’s wrong, it’s simply a matter of how we can hope to avoid litigation. In my article “Perfectly Legal Extortion,” I reported that I was sued over suspect grading and drainage in the common areas of a condominium complex that was disclaimed in my standards of practice and specifically disclaimed in my report, and by persons who were not my clients, had not paid for my services, and had no ethical or moral right to my report. In addition to that threat to my livelihood, a member of my defense team, sent me a letter warning me that if the full amount of the lawsuit was not covered by my insurance that the plaintiffs could “look upon” my “personal assets” to “satisfy a judgment.” Don’t think that didn’t get me nervous. Within a few months the insurance company rolled-over and paid $8000.00. Was the lawsuit justifiable, right or wrong? It really doesn’t matter, and that’s why we’ve got to stop debating the minutia, and start suggesting ways in which we can avoid litigation. I asked myself if the lawsuit could have been avoided. And, in retrospect, the answer was yes, it could have been, and I’ll tell you how. Realizing that my standards of practice and my contract are meaningless defenses against dishonorable people, I now evaluate anything that might result in a lawsuit, whether it is beyond my standards or disclaimed in my contract. I even warn my clients about the very real dangers of such things as diving boards, water-slides, ponds, fountains, and tree-houses, and recommend removing them. Also, anything that doesn’t meet current electrical standards is a potential safety hazard as far as I’m concerned, even a panel that is not neatly wired. The other day, I evaluated the roof of a top-floor condominium, because I noticed a one-inch bubble on the master bedroom ceiling. Sure enough, the roof was in poor condition and had been unprofessionally patched above the unit, and I could just imagine my client being woken up in the middle of the night by water dripping on the pillow next to her head; would she have drifted back to sleep, soothed by the memory of my disclaimers? I don’t think so. I’d be looking at another lawsuit. Rest assured, there are terrorists among us. Take care.

[Bruce A. King]

Keith,
After reading much of your articles and posts it would seem to me that you should have filed a counter suit in at least three of those lawsuits at the very instant you learned of the accusations.

Maybe Joe Ferry can offer some insight into going after frivolous attempts at extortion since litigation prevention is not working for you. It seems like time to take the offensive role of protecting yourself or consider getting out of the business. Maybe its just a California problem, I hope....