Massachusetts Court Orders $90.9M Against Liberty Mutual for Bad Faith Claims Handling

A Massachusetts Superior Court judge ordered three Liberty Mutual insurers to pay $90.97 million to a construction worker, John Rooney, for unfair claims handling related to his personal injury claim from a 2014 construction accident. Rooney suffered life-altering injuries after falling through a gap in scaffolding while working on Boston's Longfellow Bridge. In 2021, a jury awarded Rooney $26.6 million in negligence claims against the contractor insured by Liberty Mutual and its affiliates. The recent ruling found Liberty Mutual's insurers violated Massachusetts General Laws Chapter 176D and 93A by failing to conduct a proper investigation and refusing to make reasonable settlement offers even after clear evidence of liability. The insurers initially offered $350,000 and later $700,000, well below the eventual judgment amount, despite medical expenses reported at over $768,000. Judge Debra A. Squires-Lee concluded that Liberty Mutual's claims professionals adhered to an unsubstantiated ‘‘single plank theory’’ that blamed Rooney's accident on his own actions rather than the contractor's negligence. This refusal to revise their stance despite contradictory evidence was deemed a knowing and willful violation of fair claims handling laws. The court emphasized that insurers are required to negotiate in good faith, making reasonable settlement offers when liability becomes clear, not merely hoping for a favorable jury outcome. The judge found that Liberty was obligated to offer $4.5 million to settle before trial but failed to do so. The nearly $91 million damages award represents a statutory doubling of the $45 million underlying judgment for Rooney and includes attorney fees and costs under Chapter 93A. The decision highlights the importance of regulatory oversight of insurance claims practices to prevent insurers from self-regulating unjustly. Legal experts suggest that this ruling could influence insurers to re-evaluate claims handling and settlement strategies, encouraging timely and fair resolutions to valid claims. However, skepticism remains over whether financial penalties alone can drive systemic change in insurer behavior. This case underscores the regulatory framework's enforcement role in ensuring insurers act in good faith and promptly resolve claims where liability is reasonably clear. It also signals potential increased exposure for insurers who disregard evidence and delay settlement offers. The ruling from Massachusetts provides a precedent for courts overseeing bad faith insurance claims, reinforcing that insurers must adapt their claims processes dynamically as litigation progresses. It addresses the intersection of personal injury litigation and insurance liability management within established state legal statutes.