HI Lawsuits...Fact or Fiction?

[James H. Bushart]

Okay...there is nothing scientific about this poll. It's just for the sake of discussion and deeper thought.

First, there has been so much talk on our message board about "law suits" and the threat to home inspectors. We have all read (and may intimately know) about home inspectors who deserve to be sued...and are not. We also hear about inspectors being victimized by frivolous suits, as well.

Although none of our vendors can tell us how many home inspectors were sued in 2005 or 2006, all of them are certain as to how many will be sued. Thus, we should buy their software, buy their insurance, modify our SOP, etc. etc.

Small claims courts do not count in this survey, because the rules of evidence are very different from a Circuit Court than a small claims court where often administrative judges facilitate hearsay justice. Settlements with insurance companies do not count, for we all know how the insurer will look for the least expensive means of resolving issues without regard to justice.

What we are talking about is real live Circuit Court civil law suits that result in a finding by a judge or jury after the presentation of evidence. This is where SOPs are challenged, reports are picked apart and E&O coverage for large awards is necessary.

Is this something that happens, nationwide, perhaps two or three times per year? Maybe 10?

And when it does...is it always frivolous? Do these clowns with their 45 minute inspections and five page checklists always escape...and only the good guys get nailed?

How real is the threat to a good inspector?

[Roy D. Cooke, Sr]

Originally Posted by jbushart

Okay...there is nothing scientific about this poll. It's just for the sake of discussion and deeper thought.

First, there has been so much talk on our message board about "law suits" and the threat to home inspectors. We have all read (and may intimately know) about home inspectors who deserve to be sued...and are not. We also hear about inspectors being victimized by frivolous suits, as well.

Although none of our vendors can tell us how many home inspectors were sued in 2005 or 2006, all of them are certain as to how many will be sued. Thus, we should buy their software, buy their insurance, modify our SOP, etc. etc.

Small claims courts do not count in this survey, because the rules of evidence are very different from a Circuit Court than a small claims court where often administrative judges facilitate hearsay justice. Settlements with insurance companies do not count, for we all know how the insurer will look for the least expensive means of resolving issues without regard to justice.

What we are talking about is real live Circuit Court civil law suits that result in a finding by a judge or jury after the presentation of evidence. This is where SOPs are challenged, reports are picked apart and E&O coverage for large awards is necessary.

Is this something that happens, nationwide, perhaps two or three times per year? Maybe 10?

And when it does...is it always frivolous? Do these clowns with their 45 minute inspections and five page checklists always escape...and only the good guys get nailed?

How real is the threat to a good inspector?

I have heard of so many I know some one who new some one who was going to be sued and settled out of Court .
I do know personally My son and a very close friend who where the insurance company settled a frivolous claim instead of fighting
I do not know personally of any one who was sued .
I would love to know more about those who have experience in cases where they went to court
how long ago and
what was the cause and
the results

[klott]

i don't personally know anyone who has been sued, however having insurance sometimes invites law suits because of their willingness to settle quickly.

[John Bowman]

FACT...

Read Inspect and Protect, by Dr. Keith Swift for some heartwarming truth. Each case is documented and can be researched.
.

[Joseph Hagarty, CMI]

Originally Posted by jbushart

Okay...there is nothing scientific about this poll. It's just for the sake of discussion and deeper thought.

First, there has been so much talk on our message board about "law suits" and the threat to home inspectors. We have all read (and may intimately know) about home inspectors who deserve to be sued...and are not. We also hear about inspectors being victimized by frivolous suits, as well.

Although none of our vendors can tell us how many home inspectors were sued in 2005 or 2006, all of them are certain as to how many will be sued. Thus, we should buy their software, buy their insurance, modify our SOP, etc. etc.

Small claims courts do not count in this survey, because the rules of evidence are very different from a Circuit Court than a small claims court where often administrative judges facilitate hearsay justice. Settlements with insurance companies do not count, for we all know how the insurer will look for the least expensive means of resolving issues without regard to justice.

What we are talking about is real live Circuit Court civil law suits that result in a finding by a judge or jury after the presentation of evidence. This is where SOPs are challenged, reports are picked apart and E&O coverage for large awards is necessary.

Is this something that happens, nationwide, perhaps two or three times per year? Maybe 10?

And when it does...is it always frivolous? Do these clowns with their 45 minute inspections and five page checklists always escape...and only the good guys get nailed?

How real is the threat to a good inspector?

You started the thread...

Why did you not answer the Poll?

[gporter]

He is Shy

[James H. Bushart]

Originally Posted by jhagarty

You started the thread...

Why did you not answer the Poll?

Done.

[Christopher Currins]

James I'm sure you know about Madison county Illinois, which is where i am. Famous for many class action lawsuits, tobacco industry, railroads, asbestos. Called the judicial h**l hole, where many lawyers have made millions of dollars. I don't know of any publicized lawsuits, and there have been be very few in the State of Illinois. We are not required to carry E/O. You seem to have connections, maybe you could research Madison and Cook county.

[Joseph Hagarty, CMI]

Originally Posted by jbushart

Done.

"extremely rare and is over rated."

Noted.............

[James H. Bushart]

Originally Posted by jbowman

FACT...

Read Inspect and Protect, by Dr. Keith Swift for some heartwarming truth. Each case is documented and can be researched.
.

I've not read Keith's book. I have engaged in dialogue with him on this subject in another thread. While Keith has been able to state that "one-third of all home inspectors" will be sued in a civil court (not small claims), he is not able to answer how many have been sued in any given year up to the present date. I find this curious. To know how many will be...without knowing how many have been...certainly casts doubt on any such predictions.

And...I am sure there are cases of home inspectors being sued. Over the last ten year period, there may have been ten or twenty or thirty. Some of them may have even been "frivolous" while others were actually due to negligence.

But taking into account the tens of thousands of home inspectors who conduct the tens of thousands of home inspections in a single year....how significant, really, is ten law suits? or forty? or fifty? or however many he was able to accumulate and record in his book?

[John Bowman]

Originally Posted by jbushart

I've not read Keith's book. I have engaged in dialogue with him on this subject in another thread. While Keith has been able to state that "one-third of all home inspectors" will be sued in a civil court (not small claims), he is not able to answer how many have been sued in any given year up to the present date. I find this curious. To know how many will be...without knowing how many have been...certainly casts doubt on any such predictions.

And...I am sure there are cases of home inspectors being sued. Over the last ten year period, there may have been ten or twenty or thirty. Some of them may have even been "frivolous" while others were actually due to negligence.

But taking into account the tens of thousands of home inspectors who conduct the tens of thousands of home inspections in a single year....how significant, really, is ten law suits? or forty? or fifty? or however many he was able to accumulate and record in his book?

I certainly understand and appreciate your curiosity and doubt. Your question now seems to center around significance, rathar then around the percentages or likelihood. I have not read (or I overlooked) the 1/3 remark.

To which I have no reply only assumptions. I submit to you for consideration that the significance does not pertain to the industry as a whole, but rathar to the individual entrpreneur's. Hopefully we agree that E&O falls under two categories.

1. It's either State Mandated or
2. It's an individual business decision.

"State Mandated" removes the significance factor.The decision has been made for you by the government.

The Individual Business Decision weighs heavily on risk assessment/management. The Owner must decide if it is worth the added protection.

Can we agree on any of the following liklihoods:

We have a significantly higher chance of being sued compared to winning a state lottery.

We have a significantly higher chance of being sued compared to being hit by lightening.

No one is immune from being sued.

If we placed our chips on the number 8 and spun the roulette wheel every time an inspection was completed the chances of hitting the number 8 would increase.

Well anyways - I forgot where I was going with this...Oh Yeah...Risk Assessment/Management.

We all must weigh our options. Do we carry E&O or do we not. Like I said in some states the decision has been forced on you (which I personally do not agree with) and in other states it is left up to you. You the Home Inspector must decide what significance it has on you or your business. Do we spin the roulette wheel every time we complete an inspection and gamble or livlihood and hope for the best, or do we preplan to thwart the dreaded number eight and provide some form of protection for our business, family and livlihood.

My qualm is not in the significance (I personally find it very significant), but in the costs.

Like you, I had my doubts, and still do. But then I begin to read about or recognize the number of "expert witnesses" that exist. How do they exist. My guess would be that there is apparantly enough work for them to survive. We have several NACHI members who boast of their "expert witness" testimony that will bury anyone of us. I remember being miffed one time when an Inspector commented that he has been an "expert witness" on several cases in his area. A cursory review of his state showed that the cumulative membership within the associations numbered less than 150 individuals. I don't know about you, but that statement alone raised a red flag with me.

I think I'll get on the chat room later today and open this up for discussion. Good discussion, Jim. Thank-you.

[rwand1]

Small claims courts do not count in this survey, because the rules of evidence are very different from a Circuit Court than a small claims court where often administrative judges facilitate hearsay justice.

Really? Rules of evidence still apply.

Its still an action and if you are insured the insurer will be sure to send representation.

Settlements with insurance companies do not count, for we all know how the insurer will look for the least expensive means of resolving issues without regard to justice.

Why shouldn't they count? There is a settlement and their is payment of ones deductible.

[Claude Lawrenson]

Perhaps it is different in the US, but in Canada, small claims court is where lots of action takes place. In addition, the actions of small claims court should be counted, in the stats. I have seen as many as 1 every other week go to court in my county alone. That equates to quite a number if you look at the "big" picture.

BTW: that also can amount to a claim in the range of $1,000 to $10,000. For some newbies that can be a significant loss in a business start-up. Now add onto that those bought out by the inspector.

I know of two home inspector that have just shut their doors in the past few months because of legal claims.

[rwand1]

Its easier to sue in Small Claims because it set up for the claimant to represent himself. Small Claims court in Ontario frowns on lawyer representation.

[John Bowman]

I agree with Ray and Claude's assessment. Removal of small claims, arbitration, etc. tarnishes the overall portrayal.