ALI members voted at The American Law Institute’s 2018 Annual Meeting to approve Restatement of the Law, Liability Insurance. The project Reporters are Tom Baker of the University of Pennsylvania Law School and Associate Reporter Kyle D. Logue of Michigan Law School.
The draft has four chapters covering a range of liability insurance law topics. Chapter 1 addresses basic contract-law doctrines that have special application in the insurance-law context: interpretation, waiver, estoppel, and misrepresentation. Chapter 2 addresses insurance-law doctrines relating to duties of insurers and insureds in the management of potentially insured liability actions: defense, settlement, and cooperation. Chapter 3 addresses general principles relating to the risks insured that are common to most forms of liability insurance, including coverage provisions, conditions, and the application of limits, retentions, and deductibles. Chapter 4 addresses enforceability and remedies.
“Liability insurance law was a natural area of law for ALI to tackle in a Restatement,” said Professor Baker. “Liability insurance is an important meeting place between tort and contract law, legal fields in which the ALI has a long tradition of involvement. Liability Insurance case law can also vary from one jurisdiction to the next. By closely examining the existing common law, we believe that the membership approved a product that will be quite valuable to the courts.”
The project was launched in 2010. Working closely with a diverse team of Advisers and Members Consultative Group that includes lawyers who represent insurance companies, lawyers who represent policy holders, law professors, and judges, nearly 30 drafts have been produced through the lifecycle of the project.
“Throughout the lengthy process that brought us to this point, our Reporter, Tom Baker, and our Associate Reporter, Kyle Logue, have worked tirelessly to get it right,” said ALI Director Richard L. Revesz. “They benefited greatly from the advice of their Advisers, ALI members, and our Council, to produce this final draft. This project garnered great attention from the industry, and Tom and Kyle did an extraordinary job of listening and processing the numerous comments received to produce a Restatement that is a testament to the quality of work that ALI’s process generates.”
“Being a Reporter on the Restatement of the Law of Liability Insurance has been among the most rewarding jobs I have had as a law professor,” said Professor Logue. “I did expect to learn a lot, and to grow professionally through the experience, but I did not expect it to be as transformative as it has been. There’s a learning experience about the field itself, and it was also a learning experience about the process of creating a Restatement. It is a very collaborative exercise. Tom and I both owe a debt of gratitude to all of the project participants who suggested ideas, provided guidance, and helped us identify improvements as we completed this process.”
The Reporters, subject to oversight by the Director, will now prepare the Institute’s official text for publication. At this stage, the Reporters are authorized to correct and update citations and other references, to make editorial and stylistic improvements, and to implement any remaining substantive changes agreed to during discussion with the membership or by motions approved at the Annual Meetings. Until the official text is published, the draft approved by the membership is the official position of ALI, and may be cited as such.