Engstrom and the Legal Insurance Experiment

Nora Freeman Engstrom, Stanford Law School, has posted Legal Insurance and Its Limits, which is forthcoming in the Michigan Law Review:

Courts are buckling under the weight of a staggering access-to-justice crisis. In three-quarters of cases, at least one side lacks a lawyer, default judgments are on the rise, and most Americans with valid claims never take legal action. The situation is dire, and it understandably has policymakers casting about for a fix. On the menu are a range of uncontroversial reform ideas, such as expanding legal aid, supporting system simplification, and promoting pro bono. But it is increasingly clear that those measures—even if accomplished—would not make a dent in the problem. Attention is thus turning to other reform ideas, such as relaxing unauthorized practice of law (UPL) rules and scrapping Model Rule 5.4(d), the provision that prevents nonlawyers from even partially owning entities that deliver legal services. Both reforms are promising. But both would dilute the longstanding lawyers’ monopoly. Perhaps not surprisingly, the bar is fighting these reforms tooth-and-nail.

Into this roiling landscape, some now have a new idea: legal insurance. They suggest that legal insurance is the way to expand access to justice for middle and working-class Americans. Reformers are also quick to point out that—unlike a relaxation of UPL restrictions or the abolition of Rule 5.4(d)—legal insurance stands to benefit lawyers.

We have seen this play before. In the 1970s, the bar seized on legal insurance as a solution to what was then seen as an urgent access-to-justice crisis afflicting the middle-class. The movement garnered enthusiastic support, not just from the bar, but also from unions, states, Congress, private insurers, and consumer groups. For a time, legal insurance even took off. By the mid-1970s, there were reportedly 5,000 distinct plans in operation, and experts predicted that, by the mid-1980s, half of practicing lawyers would be participating.  Of course, it didn’t come to pass—and remarkably, it seems the entire episode has been forgotten.

This Article recovers the lost history of the country’s first experiment with legal insurance. In so doing, it seeks to forestall another false start. In addition, by drawing on a range of disciplines—including insurance law (particularly insights concerning moral hazard and adverse selection), behavioral economics, legal ethics, and the legal profession—this Article explains why the legal insurance idea floundered, and seems destined to flounder, going forward.

It is undeniably seductive to think the access-to-justice crisis can be addressed in a way that benefits lawyers. It was seductive half-a-century ago. It is seductive now. But those who actually want to address the access-to-justice crisis need to look somewhere else. 

--Dan Ernst 

Landmark Cases on Punitive Damages

Landmark Cases in the Law of Punitive Damages, edited by James Goudkam, University of Oxford, and Eleni Katsampouka, Kings College, London, has been published by Hart/Bloomsbury.

Punitive damages are private law's most controversial remedy. This book traces the development of the jurisdiction from the foundational decisions of Huckle v Money and Wilkes v Wood in England, to leading modern cases such as Harris v Digital Pulse Pty Ltd in Australia, Whiten v Pilot Insurance Co in Canada, Couch v AG (No 2) in New Zealand, PH Hydraulics and Engineering Pte Ltd v Airtrust (Hong Kong) Ltd in Singapore and Mathias v Accor Economy Lodging, Inc and State Farm Mutual Automobile Insurance Co v Campbell in the United States. Many of the decisions addressed are not only landmarks regarding punitive damages but are among the most important judgments delivered in private law more generally.

The essays, which are written by leading scholars from a wide range of jurisdictions, cast new light on the cases covered. They do so by examining their historical antecedents and the impact that they have had on the development of the law. The full spectrum of issues regarding punitive damages is addressed including the insurability of punishment, constitutional constraints on the remedy's availability and whether the award should be confined to particular causes of action. The collection will be of interest to all scholars and students of private law. It concentrates on common law cases although civilian perspectives, drawn from France and Germany, are also offered.

Discount Price: £96.  Order online at www.bloomsbury.com & use the code GLR AQ7 to get 20% off!

--Dan Ernst.  Table of Contents after the jump.

A Symposium for James Oldham

James Oldham (GULC)

In 2020, James Oldham, the St. Thomas More Professor of Law and Legal History at the Georgetown University Law Center, took emeritus status after fifty years on the faculty.  Last January, with the help of a dozen legal historians, Georgetown Law celebrated his career with the symposium, “James Oldham: The Love and Labor of Archival Research.”  Last week, while we were away, revisions of the remarks delivered on that occasion were published in The Docket, the online supplement to Law and History Review.  Last week, many LHB readers will have spotted Gautham Rao’s announcement, as Editor-in-Chief of LHR, on social media of the publication of the symposium, but we note it here as well to ensure that our other readers know of it too.

–Dan Ernst

Abraham and Baker on Insurance History and COVID-19

Kenneth S. Abraham, University of Virginia School of Law, and Tom Baker, University of Pennsylvania Carey Law School have posted What History Can Tell Us About the Future of Insurance and Litigation After COVID-19:

This Article, written for the annual Clifford Symposium on Tort Law and Social Policy, chronicles a series of developments in American history that profoundly influenced the course of insurance and insurance law, in order to predict the post-Covid-19 future of these fields. In each instance, there was a direct and decided cause-and-effect relationship between these developments and subsequent change in the world of insurance and insurance law. As important as the influence of Covid-19 is at present and probably will be in the future, in our view the Covid-19 pandemic will not be as significant an influence on insurance and insurance law as the historical developments we identify, and that is part of our message. Nonetheless, the Covid-19 pandemic will cause change, and change does not take place from a standing start. The world of insurance and insurance law have a history that places them already in motion when such new developments as a pandemic occur. Understanding how major historical developments influenced and continue to influence insurance can help us to predict the post-Covid future of insurance.

The developments this Article identifies exercised three different forms of influence. First, certain events in the twentieth-century – most notably the rise of modern tort liability and the introduction of automobiles and computers – stimulated the insurance marketplace, by generating entirely new forms of insurance to protect against the risks posed by or brought into being by these events. Second, other developments – including mass tort and pollution liability, climate change, and natural catastrophes -- influenced the evolution of insurance law doctrine in important ways, bringing modern insurance law into existence. Third, modern finance has affected insurance, and in turn insurance coverage, through the "financialization" of insurance. Having chronicled these events and developments and assessed their influence, the Article concludes by identifying some lessons that can be learned from our analysis, and applies them to support our predictions about the post-Covid world of insurance and insurance litigation.

--Dan Ernst.  H/t: TortsProf Blog

Merkin's Legal History of Marine Insurance

Rob Merkin, University of Reading, has published Marine Insurance: A Legal History (Edward Elgar):

This authoritative work forms a comprehensive examination of the legal and historical context of marine insurance, providing a detailed overview of the events and factors leading to its codification in the Marine Insurance Act 1906. It investigates the development of the legal principles and case law that underpin the Act to reveal how successful this codification truly was, and to demonstrate how these historical precedents remain relevant to marine insurance law to this day.

Beginning with the pivotal year of 1756, Rob Merkin QC organises his analysis era by era, situating the leading cases and emerging fundamentals of the marine insurance industry in the context of external events such as war, the growth of free international trade, and the expansion of empire. Offering insight into the origins of familiar legal principles in the field, the book provides a deeper understanding of the legal framework within which historical events took place and how this shaped both the development of marine insurance law and the political and economic circumstances surrounding it.

–Dan Ernst

Kadens on a 1613 Star Chamber Fraud Case

Emily Kadens, Northwestern University School of Law, has posted A Marine Insurance Fraud in the Star Chamber, which appears in Star Chamber Matters: The Court and Its Records, ed. K.J. Kesselring and Natalie Mears (2021), 155-174:

The Star Chamber was an active forum for litigating cases of fraud in the sixteenth and early seventeenth centuries. But some complaints alleging fraud were themselves fraudulent. This book chapter provides a detailed study of a 1613 Star Chamber suit claiming marine insurance fraud against London- and Amsterdam-based merchant insurers, which was allegedly committed in Livorno, Italy by two Portuguese crypto-Jews and a young English merchant. But did the fraud actually occur, or did the accuser invent the whole story?

--Dan Ernst

"Star Chamber Matters"

Just published by the University of London Press: Star Chamber Matters, edited by K. J. Kesselring and Natalie Mears:

An extraordinary court with late medieval roots in the activities of the king’s council, Star Chamber came into its own over the sixteenth and early seventeenth centuries, before being abolished in 1641 by members of parliament for what they deemed egregious abuses of royal power. Before its demise, the court heard a wide range of disputes in cases framed as marriage, fraud, libel, riot, and more. In so doing, it produced records of a sort that make its archive invaluable to many researchers today for insights into both the ordinary and extraordinary.

The chapters gathered here explore what we can learn about the history of an age through both the practices of its courts and the disputes of the people who came before them. With Star Chamber, we view a court that came of age in an era of social, legal, religious, and political transformation, and one that left an exceptional wealth of documentation that will repay further study.

--Dan Ernst.  TOC after the jump

Rossi on Insurance Law in Elizabethan England

Guido Rossi, University of Edinburgh, has published Insurance in Elizabeth England: The London Code with Cambridge University Press in its “Cambridge Studies in English Legal History” series. From the press:

English insurance came into being almost entirely during the Elizabethan period. However, the Great Fire of 1666 consumed most of London's mercantile document, and therefore little is known about early English insurance. Using new archival material, this study provides the first in-depth analysis of early English insurance. It focuses on a crucial yet little-known text, the London Insurance Code of the early 1580s, and shows how London insurance customs were first imported from Italy, then influenced by the Dutch, and finally shaped in a systematic fashion in that Insurance Code. The London Insurance Code was in turn heavily influenced by coeval continental codes. This deep influence attests the strong links between English and European insurance, and questions the common/civil law divide on the history of commercial law.

Here is the Table of Contents:

1. Introduction

Part I. Legal-Historical Background:

2. Some remarks on the origins of English insurance

3. Insurance in late sixteenth-century England

Part II. The London Code:

4. Preamble: sea-carriage and averages

5. The making of the London Code

6. Object of Insurance

7. Premium

8. The parties

9. Risks

10. Ship and voyage

11. Recovery

12. Abandonment to the insurers

13. Reinsurance

14. Life insurance

Concluding remarks.

Full information is available here.