Eight years and 29 drafts later, the American Law Institute (ALI) voted on May 22, to approve its “Restatement of the Law-Liability Insurance” (Restatement or RLLI). The final version has 50 sections and is almost 500 pages long. The project has been heavily criticized along the way, with lawmakers, insurers, policyholders and regulators, among others, all voicing concerns, including that it reflects the reporters’ aspirational views of what the law should be. This criticism is hardly surprising given that “Restatements are primarily addressed to courts” and meant to “reflect the law as it presently stands or might appropriately be stated by a court.”

Now that the Restatement has been approved, the debate has shifted to the role that it may play in courts’ future decision-making as a nonbinding document. Here, we highlight several potentially troublesome provisions for insurers relating to the defense and settlement of claims and “bad faith,” and consider the Restatement’s potential impact going forward.

Reserving Rights

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]