Why shouldn't I want them to be running drones over our houses? Worrying times... for pirate trampolines!
I think there's a sort of weird subtext in the "risk pooling" discussions on this thread that "risk pooling" is a way for people who don't replace their old roofs to get protection from the people who do. But that's not at all the concept! You refusing you repair your roof isn't an act of god; it's just recklessness.
1. pre-emptively dropping or refusing coverage
2. claim inspectors concluding the company has no liability for a particular incident.
It doesn't all need to be #2 (and probably should not be), but it also doesn't all need to be #1 either.
Also, it depends on the jurisdiction, but while the insurer can try to void the whole contract, courts don’t always let them do it, especially if the policyholder convinces the court it was an innocent mistake or oversight rather than a deliberate lie.
I just checked my insurance policy. The word "trampoline" never once occurs in it. I don't think my insurer cares about trampolines.
If I think about it: given the absurdly large payouts for some injury lawsuits in the US, I understand why American insurers might be particularly sensitive to things that might induce injury, like trampolines. Given Australian courts tend to be much more modest in the damages they award, I can see why Australian insurers might not see them as something worth paying any special attention to.
Also, even in the US: it might seem obvious to someone who grew up there, but for an immigrant from a country with a different insurance system, it wouldn’t be obvious
1. A person is at a friend's house for dinner
2. Upon leaving to go home, they trip and fall trying to navigate an unlit path to their car
3. Their injury lands them in the hospital and requires a week or so of recovery time in which they could not work, and as they contract out they lose that money
4. The health insurance that fully covered their injury, looks at the medical records and finds that the injury occurred on another property and calls the people involved and finds out about the unlit path
5. They deny payment for the medical treatments and tell the injured person to sue the friend for medical payment because they are at fault and they have home owner's insurance
6. Forced to sue the friend or be out tens of thousands of dollars, the injured person adds to the claim for lost wages (hey, the friend isn't paying for it anyway, the insurance is)
This is how you end up with such lawsuits that the USA is famous for -- people are forced to sue other people in order to not go bankrupt, and things get piled on that.
In Australia, if you are seriously injured, you will be sent to a public hospital, where the government will fit the bill for your treatment. If it is a workplace injury or a motor vehicle accident, they might seek to recover costs from the compulsory private insurance in those cases, but otherwise they wouldn't. Many people also have private health insurance, but the private system usually doesn't get involved in accidents and trauma, it prefers to focus on things with greater predictability and profitability (e.g. hip replacements).
Every country is different, but I suspect in many other countries with either public or hybrid public/private systems, it is going to be a similar story
> This is how you end up with such lawsuits that the USA is famous for -- people are forced to sue other people in order to not go bankrupt, and things get piled on that.
It isn't just about lawsuits, it is also about damages payouts. In the US, there is a very broad constitutional right to a jury trial, which extends to civil lawsuits; and (in many cases) the law entrusts the jury, not just with deciding whether the plaintiff has factually proven their case, but also with awarding damages. American lawyers have mastered the art of emotionally convincing jurors to make big awards (especially if the defendant is a big corporation, or an unsavoury private individual). And big awards create precedent for bigger awards in the future. Even though judges can reduce jury damages awards, and often do, I think that only partly reverses the impact of juries in encouraging their growth. Also, the fact that many states have elected judges makes them hesitate about reducing jury damages too much, since that might offend the voters and threaten their re-election chances
Compare Australia: we also have a constitutional right to a jury trial, but it only applies to the most serious federal crimes; it does not apply to less serious federal crimes, nor state crimes (regardless of seriousness), and there is no constitutional right to a jury in civil cases. Sometimes, you can get yourself a jury in a civil case (depending on various complex legal factors), but in practice the majority of civil trials don't have one. And even when there is a jury, the norm is the jury only decides whether the plaintiff has proven the facts of their case, and damages is wholly up to the judge. Judges tend to be much more conservative in awarding damages, and as a result, the runaway damages inflation which has happened in the US, has been far less of a thing in Australia. And all judges in Australia are appointed (both state and federal), and the process is mostly insulated from politics, so Australian judges are far less afraid to offend public opinion
The big damages are punitive damages, not damages for compensation. Since we have rather lax consumer protection laws we rely on the companies being afraid of having to deal with a huge lawsuit payout if they act suitably antisocial. Like the McDonalds hot coffee lady only asked for medical bills, but because McDonalds corporate refused to give her those, and continued to keep coffee boiling hot regardless of people getting injured that they knew happened constantly, because it made them money, the jury made it a point to award a ludicrous judgement to teach them a lesson.
For example, in the 2014 Florida case Cynthia Robinson v. R.J. Reynolds Tobacco Company, et al, the jury awarded US$23.6 billion in punitive damages as well as US$16.9 million in compensatory damages, for the death of the plaintiff's husband, a smoker who died from lung cancer at the age of 36. I'm sceptical any Australian judge would ever award US$16.9 million (at current exchange rates, AU$25.7 million) compensatory damages for a single person's death. The trial judge cut back the astronomical punitive damages award, but left the compensatory award intact. In the end, the plaintiff never got any of that money (the appeals court ordered a retrial, on grounds unrelated to the damages, and the defendant prevailed at the second trial). Still, I think it goes to show, it is not just high punitive damages, high compensatory damages is an issue too.
For example, compare how the UK and the US handle compensation for lost future earnings in wrongful death cases. In the UK, judges are guided by the "Ogden tables", actuarial tables published by the British government. The judge will use the deceased's age to look up a multiplier in the tables, which will be multiplied by their income at the time of death, to derive a net present value of future earnings. While the tables are technically only a guideline, and judges have the discretion to deviate from them, plaintiffs rarely succeed in practice with convincing judges to do so.
By contrast, in the US, there are no such formal guidelines – it is largely determined by expert witness testimony before a jury. Expert witnesses have a lot of scope to argue for higher estimates, and often succeed in convincing a jury with those arguments. The result is unsurprising – compensation for lost future earnings is more generous in the US than in the UK.
http://ndl.ethernet.edu.et/bitstream/123456789/28878/1/53.pd...
Are you trying to say that one system is bad and another is good? They are different for different reasons, which can be explained by the structure of the society and what we expect courts to provide for us as opposed to other areas of government or private parties.
The argument though is, a lot of the difference is nothing to do with the factors you cite such as social safety nets, it is about the use of juries in civil cases, especially to decide damages. David Bernstein (professor of law at George Mason University) puts the argument better than I can in a 1996 journal article – https://www.cato.org/sites/cato.org/files/serials/files/regu... – see in particular the discussion of juries on PDF pages 3 onwards, and his recommendation on PDF page 6 that state legislatures should remove the power to decide damages from juries and transfer it to judges only
Why are you arguing this? For what purpose would it serve to give up the right to a jury trial in order to mitigate the extreme outlier cases which bump up the averages and which do not actually get any money into the hands of the plaintiffs? You want to destroy a constitutional right because... the tobacco industry got an unfair award, or because you think people are too dumb and swayed too easily by lawyers that we can let them decide life or death but can't let them decide how much money someone is owed?
Why take this position? What justice is it serving and why would society be better off for doing it?
Because I'm interested in comparative law and the differences between the legal systems of different countries, and my honest opinion is this is a matter in which the US system is worse than that of the other major English-speaking countries.
I can also point to examples of the opposite, where I think the US system does it better – e.g. the abolition of the dock.
> For what purpose would it serve to give up the right to a jury trial in order to mitigate the extreme outlier cases which bump up the averages and which do not actually get any money into the hands of the plaintiffs?
Bernstein's primary argument isn't about outliers, it is about predictability and consistency – judges are much more consistent in the damages they award than juries are. Where juries are in charge of damages, it can turn into a lottery, where some successful plaintiffs win big, and others win small, just based on the luck of the jury pool draw. He argues that's unfair to those less lucky successful plaintiffs, and I think he is correct there. Of course, there can be a similar phenomena with random selection of trial judges, but the variability due to different judges tends to be significantly smaller than the variability due to different juries, since judges are subject to pressures for consistency which do not exist for juries
> You want to destroy a constitutional right because...
Under US constitutional law as it stands, there is no federal constitutional right to a jury trial for civil cases in state courts. The 7th Amendment right to jury trials in civil suits only applies federally, it has not been incorporated against the states under the 14th Amendment. This is unlike the 6th Amendment right to jury trials in criminal cases, which has been incorporated under the 14th (except for the vicinage clause). The piecemeal application of the incorporation doctrine seems rather arbitrary and difficult to rationally justify, but that's SCOTUS precedent as it stands.
Some state constitutions have a state constitutional right to civil jury trials, others don't. For those that don't, there would be no constitutional obstacle to a state legislature implementing Bernstein's proposal to remove damages decisions from juries and shift them to the judge–which is already the norm in every other major English-speaking country. As to those states who do have such a state constitutional right, whether Bernstein's proposal would be compatible with it depends on precisely how that right is worded, and how the state courts choose to interpret those words.
> you think people are too dumb and swayed too easily by lawyers that we can let them decide life or death but can't let them decide how much money someone is owed?
I'm opposed to the death penalty so I don't believe any jury should be deciding life or death.
That said, criminal matters and civil matters are so different, it is rational to hold that juries should be required for one and not the other. Criminal matters are supposed to have a very high burden of proof (beyond a reasonable doubt), where requiring 12 ordinary people to make a unanimous decision can be viewed as an additional protection against wrongful convictions. Civil matters are decided on a much weaker standard (balance of probabilities), so it is not clear whether juries are as necessary for civil cases.
(When I bought a house, the sales contract was maybe 50 pages. I went to the escrow company to sign. The escrow agent was visibly annoyed that I leaned back in the chair and set about reading every page. One of the pages that needed to be signed said nothing but "I have read and understood this contract.")
Except, Courts have ruled that you can, at least sometimes, get out of the fine print of a contract by claiming you didn't read it. For example, see the notable 1962 Supreme Court of California case, Steven v. Fidelity Casualty Co [0].
In 1957, plaintiff purchased a life insurance policy covering plane crashes, from a vending machine in Los Angeles, with his wife as the beneficiary. His itinerary took him from LA to Chicago, and from there to Dayton, Ohio. On his return from Dayton to Chicago, he'd scheduled a one night stopover in Terre Haute, Indiana. In the morning, he went to the airport in Terre Haute, and was distressed to discover the flight had been cancelled due to technical issues, and he was going to miss his connection in Chicago. The airline agent referred him to a charter airline, who organised a charter flight for him and a handful of other passengers back to Chicago. Sadly, the charter flight crashed, and he died.
His widow sought to claim on the life insurance policy. The insurer denied the claim, on the grounds that the fine print of the policy said that it only applied to scheduled air carriers, not charter flights, and hence the flight on which the insured died was excluded. His widow sued the insurance company in the name of her deceased husband. The trial court sided with the insurer, on the grounds that this clause was clearly stated in the fine print of the policy, which the policyholder was expected to have read, and he had signed to say that he had.
However, on appeal, the Supreme Court of California overturned the judgement, and ruled for the widow. It held that, for consumer insurance contracts, any clause or exclusion which the policyholder could not have reasonably expected, must be pointed out prominently, not buried in the fine print. Since, it ruled, the policyholder had no particular reason to expect the exclusion of charter flights, and the insurer had not prominently stated that exclusion in the policy (e.g. by using a larger font), it was not legally binding.
And, from what I understand, the rule established in this 1962 case is followed in California law to this day, and has also been adopted by the courts of several other US states
Why should anyone think the fine print is irrelevant? Everything in a contract is relevant, or it wouldn't be in the contract.
That means there will always be an argument around what a reasonable party would consider a surprising clause, but contract law disputes deal with nuance, edge cases, and what a reasonable party would expect all the time. With rulings like this corporations will air on the side of caution when taking big swings in forming their agreements since litigation is so costly and the outcome so uncertain. Consumers gain a little power back (though still far from equal footing).
This should only apply when there are large power imbalances, such as individual people entering agreements with vast multinational corporations. When big corps ink deals with each other caveat emptor should reign; they have equal opportunity to review and understand the terms and therefore have to live with the consequences.
It's not unreasonable to expect a party to a contract to read all of it. If one's case is based on "I didn't read it", the other party should prevail.
> Consumers gain a little power back (though still far from equal footing).
The consumer can always say "no". An important feature of a free market is there are no forced contracts. Saying "no" is the ultimate power.
Walter, you are a very smart guy. And this is a site which attracts people with above average intelligence and education. It is easy to forget that not everyone is as smart or well-educated as we are.
I know a guy who has been diagnosed with borderline intellectual functioning (i.e. his IQ is above the cutoff for intellectual disability, but only just). He blames it on his alcoholic mother drinking when she was pregnant. He's able to live independently, he drives a truck for a living. But no way is he ever going to be able to comprehend all by himself the dense fine-print of a contract. The law has to look after people like him, not just people like you or me. There are literally millions of people like him out there – around 13% of the population has an IQ in the borderline range.
> The consumer can always say "no". An important feature of a free market is there are no forced contracts. Saying "no" is the ultimate power.
Some products, people need to buy to meet their basic human needs and to function in society. For many of those products, there are only a small number of vendors available. If all of them demand you sign an incomprehensible barrage of legalese, you can't realistically say "no" to doing so. It might not be a "forced contract" in an abstract theoretical sense, but it sure is in a practical sense.
If someone is borderline on this, it's fine if the court steps in to give him some slack.
But the defense in the case under consideration was not lack of mental acuity, unclear legalese, ambiguity, coercion, or power imbalance.
It was "didn't read the contract".
A person with borderline intellectual functioning can absolutely have capacity to understand a contract sufficiently to agree with it when its terms are explained to them in clear plain English, yet lack the same capacity when they are presented in dense legalese. Legal doctrines of "capacity" tend not to deal with that situation very well, because they focus on the capabilities of one of the parties rather than the form in which the contract is presented. Also, a lot of people with mild cognitive issues (not just borderline IQ, also other issues like age-related cognitive decline, early stage dementia, early stage hepatic encephalopathy, etc) are unaware of those issues, in denial about them, or too ashamed to admit them, so may not benefit from legal rules designed to apply to them specifically, whereas they can stand to benefit from legal rules (like demanding unexpected clauses to be stated prominently to be enforceable) designed to apply to everybody.
I don't know if it really is the case that your insurance can be voided over material misrepresentations unrelated to your claim, but certainly there's no moral argument that it shouldn't work that way.
This doesn't stop expensive lawsuits, even if they ultimately don't pay the claim.
Whereas your ability to sue for a non-existent policy (or one where that was unambiguously canceled) is... much less.
Because it’s creepy.