“Litigation Fuel” Remains in ALI’s New Restatement

While some American Law Institute members celebrated the passage of the new Restatement of the Law of Liability Insurance, others lamented the “litigation fuel” that remains in the document, the Pennsylvania Record reports.

Victor Schwartz, the co-chair of the Public Policy Practice Group and Shook Hardy & Bacon LLP, said despite the work to improve the Restatement, there are “a number of litigation fuel centers which remain that are not supported by existing law.” He pointed specifically to sections of the document that suggest that insurers can be held liable for their retained counsel’s lack of “adequate” malpractice insurance and how some of the Restatement’s principles were based largely off dissenting opinions.

Laura Foggan of Crowell & Moring LLP also said there are sections that now open insurance to liability that can have “significant collateral consequences.”