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7 Common Legal Terms Explained

7 Common Legal Terms Explained

People say lawyers have their own language.  7-common-legal-terms-explainedWhile we use this language every day, our clients are often unfamiliar with the terms and are hearing them first.  If you have a court case, here are some terms you may hear.

Plaintiff – The Plaintiff is the person who files a lawsuit.  Another way to think about it is that the plaintiff is the person who claims that they were wronged and seeks to recover damages from the defendant.

Defendant – The Defendant is the person being sued. Although the defendant can bring claims against the plaintiff in the same case, called counterclaims, we generally think of the defendant as the person who is being accused of wrongdoing and must defend themself.

Statute of Limitations – The term Statute of Limitations refers to the period during which the person can file a lawsuit.  These periods vary by type of case as well as by state.

Liability – Liability refers to the defendant’s legal responsibility for damages.  For example, in a personal injury lawsuit, the ultimate issue is whether the defendant is liable for the injuries and damages suffered by the plaintiff.

Damages – Damages mean the amount of money that a plaintiff recovers in a lawsuit.  This is categorized in several ways: financial damages (e.g., lost wages, lost profit, medical costs, etc.) and non-financial damages (e.g., emotional distress, pain and suffering, permanent disability).  Regardless of categories, consider damages as what could be recovered financially in a lawsuit.

Credibility – Credibility is another way of saying that a person is believable — appears honest and trustworthy when telling their side of the story.  The credibility of witnesses is a central focus in almost every lawsuit imaginable.  This is particularly true when two sides tell two very different stories.  A judge or jury must choose which version to believe.

Structured Settlements – Structured settlements are used to resolve personal injury claims and some other types of claims.  They work by taking the money that would otherwise be paid in a lump sum to the plaintiff and investing it so that there is a consistent stream of payments over a set period.

 If you need help filing a lawsuit or require legal counsel, give Kelly and West Attorneys a call.  With over 30 years of experience, our team of highly knowledgeable attorneys has the tools you need to win!

 

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    What You Should Know About Bad Faith InsuranceYour insurance company is legally obligated to deal with you “fairly and in good faith.”  When you file insurance claims, such as claims for bodily injury and/or property damage under your auto policy, that good faith obligation is tested.  After all, the insurance company’s bottom line and your best interests are at odds.  The more claims a company denies and the less it pays o claims it accepts, the more profit it makes.  But you’ve paid your premiums and deserve to be fully compensated for your losses up to the limits of your coverage. 

    Most often, insurance companies investigate and administer claims professionally, deny only those claims they reasonably believe are invalid, and attempt to evaluate and settle valid claims fairly.  Sometimes, they get it wrong, even though they have acted fairly and in good faith.  When that’s the case, the policyholder can file a breach of contract lawsuit and go to trial to recover the compensation to which he/she is entitled under the policy.  

    If the insurance company does not act fairly and in good faith, the policyholder has grounds to file an insurance bad faith lawsuit and, if successful, recover not only what is due under the policy but also either punitive or multiple damages.  Here is what you should know about bad faith insurance lawsuits in North Carolina.

    What Laws Support an Insurance Bad Faith Lawsuit?

    In North Carolina, there are two sources of insurance bad faith law, state statutes and common law (court decisions).  A policyholder can file an insurance bad faith lawsuit based on either or both, but where the court determines that both apply, the policyholder must elect to recover under one or the other.

    Statutory Insurance Bad Faith

    Under the North Carolina Unfair and Deceptive Trade Practices Act, a policyholder can recover “treble damages,” three times the amount of any damages caused by the insurance company’s “unfair” or “deceptive” behavior.  Such behavior is not limited to, but definitely includes, any of the fourteen “unfair claim settlement practices” defined in a section of North Carolina’s insurance statutes.  

    Among those unfair claim settlement practices are:

       *     misrepresenting pertinent facts or policy provisions relating to the coverages at issue,

       *     failing to acknowledge and act reasonably promptly upon communications with respect to claims,    

       *     refusing to pay a claim without conducting a reasonable investigation of all available information,

       *     failing to affirm or deny coverage of claims within a reasonable time after proof-of-loss statements are completed,

        *     forcing the policyholder to resort to litigation without attempting to settle in good faith,

        *     attempting to settle a claim for  less than a reasonable man would have believed he was entitled,

         *     failing to promptly settle claims under one coverage where liability is reasonably clear (e.g., property damage claims) in order to influence settlement of claims under another coverage (e.g., personal injury claims) and

         *     failing to promptly and reasonably explain the basis in the policy or applicable law for denial of a claim or the offer of a  compromise settlement.

    Common Law Insurance Bad Faith

    In addition to liability based on those North Carolina statutes, North Carolina courts have held that an insurance company is responsible for bad faith wrongdoing when it refuses to pay policy benefits after receiving and recognizing a valid claim or otherwise acts solely in its own interest, provided, that there must also be some “aggravating” or “outrageous” misconduct by the company that harms the policyholder.  Such additional misconduct has been described as including “fraud,” “malice,” “gross negligence,” “willful and wanton conduct,” or “reckless disregard.”  Those can be difficult to prove and have to be considered and determined based on the facts in each case.  

    The theory in the bad faith case decisions is that a judgment awarding the policyholder only what is due under the policy (for breach of contract) does nothing to discourage the insurance company (and other insurers) from engaging in such bad behavior when responding to future claims.  Under those circumstances, the court’s judgment may also require that the company pay the policyholder punitive damages that may be much higher than the value of the original claim or the policy limits.

    Should You Consider Filing an Insurance Bad Faith Lawsuit?

    North Carolina does not recognize a claim for bad faith against someone else’s insurance company.  Also, your insurance company may treat you “fairly and in good faith” yet still deny your claim in whole or in part.  When it accepts liability, it may still honestly and reasonably disagree with your calculation of your covered losses.  

    As you should understand, based on this very brief introduction to the applicable law, distinguishing between good faith (though rigorous) and bad faith insurance company conduct is difficult and can only be done on a case-by-case basis.  It requires the kind of analysis that can best be done by an experienced attorney.  

    Our attorneys at Kelly & West have helped hundreds of clients with their insurance claims.  If you have filed a claim and feel that your insurance company is ignoring you, unnecessarily delaying its response or otherwise treating you unfairly, you are welcome to contact us at Kelly & West and arrange for a free consultation.