F. Lee Bailey vs. Bill Bailey. (interview with the two brothers) (interview)

F. Lee BAILEY vs. Bill BAILEY

Like most siblings, the Bailey brothers often find themselves with opposite opinions. But in the case of F. Lee Bailey and his younger brother, Bill, their views reflect the sentiments of two industries that are sometimes at philosophical loggerheads: Insurance companies battling scores of liability claims, and lawyers who press those claims in court.

Bill Bailey, 48, is special counsel to the Insurance Information Institute. Prior to that, he was senior vice president of the Home Office Claim Department at Commercial Union Insurance Cos. He also practiced law for several years.

F. Lee Bailey, 56, achieved national prominense for his defenses of the Boston Strangler, Dr. Sam Sheppard and Patty Hearst. He is also the author of The Defense Never Rests, among numerous books. F. Lee Bailey remains a practicing attorney.

At Bill's suggestion, the two brothers sat down recently in Palm Beach, Fla., Lee's new hometown, to discuss their points of disagreement--and agreement--on legal matters affecting insurance. INSURANCE REVIEW was on hand to keep order.

INSURANCE REVIEW: Let's begin with the issue of punitive damages. Should limitations be placed on such damages, as many in the insurance industry contend?

LEE: This whole issue is largely smoke. Punitive damages are a vehicle to punish for much more egregious conduct than simple negligence, and they have frightened a lot of industries. Juries frequently award punitive damages in ridiculous amounts, but such awards are almost always eliminated or trimmed back to something much more reasonable by appellate courts. Still, their mere potential existence is something that concerns corporate people at every level, because it can be a wipeout.

What I do disagree with is the policy in some states to cause the insurance carrier to pay the punitive damages. If they're not to be collected from the wrongdoer, I think the purpose of punitive damages has been totally defeated.

BILL: Punitive damages are used by plaintiff lawyers as a club over the head of the claims department. In my experience, they are most frequently used by trial attorneys as a bargaining chip to drive up settlement values--and also to drive a wedge between the insurer and the insured over coverage issues. And the lawyers have been successful! Average settlements have …