It has been 10 years since we began the Bad Faith Blog, which now includes over 1,200 posts. Bad faith litigation has remained a constant in state and federal courts over that time, and is a regular part of the litigation landscape. There have been bad faith claims that did not survive motion practice, and some resulting in large awards. As to the frequency of bad faith claims, one Third Circuit panel stated in 2012: “We note, however, that our experience in addressing Pennsylvania insurance coverage disputes has demonstrated that insureds tend to bring bad faith claims when insurers reject their claims even though there are legitimate disputes over whether the claims are covered.”
While there are many aspects of the law which merit attention, one feature does earn special notice: What is bad faith?
In 2007, it appeared that the Supreme Court provided definition to the meaning of bad faith under section 8371, in Toy v. Metropolitan Life. The Court, in both the majority and dissenting opinions, addressed the difference between bad faith conduct which is evidentiary in nature, and bad faith decisions which are actionable in and of themselves. However, Toy is seldom cited, and there is a significant body of case law erasing the line between evidentiary conduct supporting a finding of bad faith, and that same conduct in and of itself being bad faith. We will continue to report on the development of this fundamental issue, and on all aspects of an ever dynamic and constantly growing body of law.