Admissions Insurers Personal Injury

Admissions by Insurers in Personal Injury Actions

Brien Roche

In the course of dealing with insurance companies, sometimes they make interesting admissions as to the case they are handling. Those admissions may be governed by Rule 2:408(a)(2) and Rule 2:803(0)(C) and (D).

Admissions Insurers Personal Injury – Negotiations

Rule 2:408(a)(2) states that statements made in the course of compromise negotiations are not admissible. Rule 2-102 qualifies all of the rules by saying they do not change any established case law. However such case law may be considered by the Court in interpreting and applying the rules of evidence.

In City of Richmond v Ewing’s Son, 201 Va. 862, 870 (1960) the Court said that an express admission of liability during negotiations for a compromise is admissible. In Turner v Burford Buick Corporation, 201 Va. 693, 698 (1960) the purported admission of a claims adjuster was deemed not admissible because the authority of the adjuster had not been established. In Kitchin v Gary St Corp., 196 Va. 259,266 (1954) the Court held that an admission by a claims adjuster was imputed to the party since the adjuster was an agent of the party and the party constituted him as such.

Admissions Insurers Personal Injury – Agency and Control

Rule 2-803(0)(C) and (D) state that the Hearsay Rule does not exclude a statement offered against a party that is a statement by a person authorized by the party to make the statement concerning the subject or a statement by the party’s agent or employee, made during the term of the agency or employment, concerning a matter within the scope of such agency or employment. The personal auto insurance policy grants the carrier the power to investigate, negotiate, settle and defend the claim through counsel of their choosing. The carrier controls the choice of counsel because they wish to control the litigation. They likewise control the investigation, the negotiation and any settlement. The decision to investigate, what to investigate, how to negotiate, whether to negotiate at all, whether to settle and how much to settle for are exclusively within the control of the carrier.

It’s All About Control

That issue of control is determinative as to whether the claims adjuster is an agent of the insured. In Murphy v. Holiday Inns, 216 Va. 490, 494 (1975) the Court dealt with a franchise agreement and whether that agreement on its face established the existence of an agency relationship. The determining factor was the degree of control the agreement gave the franchisor over the franchisee. Under the terms of the standard auto policy the carrier controls negotiations. If there is some doubt about that then discovery may be appropriate.

Admissions made by a claims adjuster during the course of negotiations should be admissible. The carrier controls those negotiations. The insured has no control. Control is the determining factor. Both the insured and the insurer agreed to that and as such are bound by the terms of their insurance agreement. If the parties to the agreement had wished to qualify the degree of control they could do so by the terms of the agreement.

Admissions by Insurers in Personal Injury Actions

Posted on June 28, 2023 by Brien Roche

Brien Roche