CAs of January 1, 2024, Oregon insurance law will experience a paradigm shift—for the first time, Oregon will allow insureds to present a meaningful and substantial extra-contractual claim for damages.
After the resolution of a legislative impasse that threatened to derail the entire legislative session, the Oregon State Senate returned to business this week and advanced a series of bills to the governor’s desk. Included amongst them was House Bill 3242, which amends Oregon’s Unfair Claims Settlement Practices Act (ORS 746.230) to allow a private right of action for insureds to recover actual damages, treble damages, attorney fees, and litigation costs for an insurer’s unreasonable conduct in violation of the act.
Oregon Governor Tina Kotek is expected to sign the bill in the coming weeks.
Once signed and in effect, an insured may bring a cause of action under ORS 746.230 for violation of the statute, which identifies familiar unfair claim settlement practices such as the following:
(a) Misrepresenting facts or policy provisions in settling claims;
. . .
(d) Refusing to pay claims without conducting a reasonable investigation based on all available information;
. . .
(g) Compelling claimants to initiate litigation to recover amounts due by offering substantially less than amounts ultimately recovered in actions brought by such claimants;
. . .
The statute does contain two important exceptions. The statute does not allow a suit to be brought on medical malpractice claims. The statute also specifically excludes claims against attorneys, “in the attorney’s personal capacity,” for any acts taken on behalf of an insurer.
The statute also contains a 45-day notice requirement with an opportunity to cure on the part of the insurer.
Regarding treble damages, the statute is explicit in stating that the decision whether to award treble damages rests with the “court”. This would appear to signal that, as a practical matter, trebling would be subject to post-trial motions practice. However, it should be noted that in other jurisdictions, the Federal Courts have held that trebling must be decided by a jury as a matter of United States Constitutional Law. This is an issue certain to be litigated as policyholders and insurers begin confronting the practical impacts of the new statute.
Finally, the statute will carry a two-year statute of limitations. The statute is triggered not on the date of the loss, but on the date of the alleged violation of the statute.
House Bill 3243, which would have amended Oregon’s Unlawful Trade Practices Act (UTPA) to create yet another private cause of action for insureds, died in committee.
Lether Law Group has attorneys licensed and actively practicing in the State of Oregon. To the extent that you have any questions about Oregon law, please feel free to contact Tom Lether or Eric Neal at (855) 467-5444 .