SD Bad Faith Judgements on Hold Until August

Pierre, SD (WorkersCompensation.com) – South Dakota is in waiting as government officials and attorneys alike are stalled until August, when insurance companies will officially be requesting a stronger bad faith claim policy. South Dakota Division of Labor and Management Director James Marsh said their issues will be brought forth to the Workers’ Compensation Advisory Council (WCAC), where legislative proposals may be presented.

“We have been hearing much about it the last couple of years. Most of the information we have gotten has been from defense counsel representing insurance companies that say they have this problem,” Marsh said.

“It’s difficult for us to assess because those type of claims are generally run through general jurisdiction trial courts instead of our agency, so if there is a bad faith litigation suit we will never hear about it unless it hits the papers,” he added.  

The Director likened the present matter to shadow boxing.

“We don’t know how big or valid the problem is, there is just no way of knowing,” he said. “The purpose that the council serves to that regard is to put the information on the table and thoroughly review it and see whether formal action needs to be taken.”

The matter is potentially worth a lot of money, with the proposal coming after a $4 million claim was awarded to Laura Dziadek in 2016, when Traveler’s insurance was involved in $1 million bad faith case.

Sioux Falls Esquire Mike McKnight said to the Argus Leader in a June 10 news report that the postponed proposal is being discussed by both sides, including claimant lawyers, trial lawyers and others to “see if we can come to some resolution.” McKnight’s office did not respond to comment from WorkersCompensation.com by press time.

Marsh said the only thing certain is the August hearing. “Because it is a tort type of claim, I am unsure on how much the council will be able to do to address because that is something that would require, as I understand, some type of modification of the civil procedure laws in circuit court, and that is outside what we ordinarily deal with,” he said.

“The main thing I think we can do as a council is to quantify just how real this problem is or isn’t,” he added.

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This article was updated as of 06/13/17.

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