Police reports are evidence that can support a finding of liability, but they are not a legal establishment of liability. There are very good reasons (the due process clause of the 14th Amendment comes to mind) why that should be the case, it's not a scam..
> Throwing ones hands up to say "well, of -course- the company is going to avoid paying anything out unless taken to a court of law" is to abdicate corporations of all responsibility other than profit making.
Untrue. The corporation here has other responsibilities, but they are all to their paying customer.
They have the opposite responsibility, if anything... They have a fiduciary duty to their shareholders, and considering that the behavior being suggested here would see them quickly run out of business by their less-moral competition, it would probably be a breach of that duty.
The solution is to change laws about redress. For example, statutory punitive damages and attorneys' fees in lawsuits against insurers where the final judgement is significantly different from the insurer's initial offer.
Talk about what is ethical is idle because that simply does not drive corporate behavior.
1. I you're supposed to have negotiated with the counterparty in good faith prior to a lawsuit. If not, that will be looked negatively by the judge. https://www.sbwllp.com/rule-68-offers-of-judgment/
2. This probably doesn't play well with probabilities/statistics. Suppose we accept your proposal, and say any final judgement that's 5x larger than the offered settlement should be hit with extra damages. Now a lawsuit comes along that the insurance company thinks there's a 12.5% chance of winning, and if they win, the damages awarded will realistically be $1M. Based on expected value calculated from the previous facts, and factoring in court/attorney's fees, the insurance company offers the plaintiffs $150k to settle. That seems like a good offer for all parties involved. However, if the plaintiff gets greedy, and on the off chance he wins, the insurance company will have to pay extra damages, because from an initial offer to final judgement perspective the disparity is huge.
Regarding Part 2, I actually don't see the problem. If the result is causing insurance companies to be more cautious about lowball offers when there's a range of reasonable outcomes, is that bad? The plaintiff still must succeed at proving damages, so it's not like that outcome is unforseeable.
It does increase "settlement risk" for insurers, but _they're insurers_. Of every kind of entity out there they should be the most comfortable with risk. The greater risk of unfavorable settlements would obviously increase insurance premiums, but if premiums increase because insurers are actually paying more in fair settlements and/or punitive judgements because they failed to pay a fair settlement, again I cannot see the problem.
But the problem is that in the example I given, the lowball option is fair given the probabilities/expected value.
Citation please.
https://www.nolo.com/legal-encyclopedia/fiduciary-responsibi....
My apologies.
Being on the shitty end of the stick, of course the poster sees what is happening. But until a judge or impartial third party with some pull sees it, it might as well not exist. And that’s hard.