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?
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
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.
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.
It’s either State Mandated or
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.
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.
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.
Its also less costly to go the small claims route if the claim is under $10K.
Considerably more to go to Superior Court and take at very minimum 2 years plus to play out.
The major differences between the different state courts is their rules of evidence.
Small claims court allows evidence that the higher courts reject. The object is to resolve issues expediently without clogging up the judicial system. Like Family Court, much is allowed as evidence that would not otherwise be accepted in a higher court.
Additionally, small claims courts have strict limits as to the amounts that can be awarded. In Missouri, that limit is $1500. No one will lose the house over a small claims judgment.
Also, all small claims court judgments are - at the request of the losing party - automatically appealled (for a nominal fee) to a circuit court to be heard with the proper rules of evidence. At least in my state, not even the court system accepts a ruling of a small claims court as carrying any weight of significance.
So…for the purpose of this discussion…settlements and small claims are moot.
What is the real threat of being sued in a circuit court?
The question is a legitimate one, if you are among those who say that the current SOP does not protect the inspector, for instance. In order to be qualified to say this, one must know (1) how many inspectors were tried under the state’s strict rules of evidence where the SOP would be presented and (2) of those who were tried, how many lost as a direct result of an inadequate SOP, as opposed to actual negligence.
I guess the real bottom line is that no real meaningful discussion can take place without knowing these numbers.
In the absence of this raw data - I am as likely to be correct regarding the insignificance of this “threat” as the doomsday predictors are, that we are all (or 1/3, or 1/4) going to be sued in the coming weeks and months.
It has enough good legal advice and report writing tips to make it worth the purchase and reading time. However, it spent sooooooooooooo much time villianizing the legal system and hyping the importance of having a report generating software program that has thousands of industry standard narratives that it felt like it was also a salespitch …
If you are among those who say that the current SOP does protect the inspector, for instance. In order to be qualified to say this, one must know (1) how many inspectors were tried under the state’s strict rules of evidence where the SOP would be presented and (2) of those who were tried, how many lost as a direct result of an inadequte SOP, as opposed to actual negligence.
Both scenarios show conjecture and lack of support to be qualitive statements. If you are looking for someone to agree with you that the SOP’s are insignificant and hold no bearing in a negligence case, then I tend to agree with you. In fact I’m willing to bet more often than not that the SOP’s aren’t even mentioned in negligence cases. But to predicate your findings/observations solely based on Missouri’s $1,500.00 maximum would do injustice in states that have much higher judgement amounts that often exceed the deductible of E & O. I hate this statement, but can’t find a more appropriate one at this time. But comparing apples to oranges (yuk) does not work at this time because the equation includes much more than centering your concerns around the SOP’s only.
I am not disputing Claudes Statement but this is again hear say .
There is a lot of information missing .
Like why did they shut their doors .
Did They go to court.
Did they quit because it cost too much to fight frivilious claims.
Did they loose there claim.
Did they have insurance.
Did they just give up because the insurance paid a frivilious claim and Decided they could not afford to keep paying the insurance deductiable.
Sorry Claude just too much information missing for me to except your statement they way it is given.