When dealing with claims alleging violations of the Massachusetts Consumer Protection Act, i.e., Massachusetts General Laws Chapter 93A, insureds may encounter a variety of likely issues. We have identified the “Top 5” things to consider relative to claims against insureds, more particularly, claims made under Section 9 where a statutory demand letter is received by the insured and forwarded to the insurer.
1. A 93A Demand is not a “Suit.”
Therefore a Massachusetts court is unlikely to find that receipt of the statutory demand triggers a duty to defend. However…
2. The 93A Demand is a Precursor to Suit being filed.
The statute requires a claimant to wait 30 days after sending the Demand before filing suit with a count alleging violation of the Massachusetts Consumer Protection Act. Thus, notice of the Demand is an opportunity to Assign Counsel and Control the Defense from the get go.
3. A Response to the Demand is required within 30 Days.
This is a strict deadline. Failure to comply could result in an award of multiple damages and should be taken seriously.
4. Violations of 93A allow for unique damages.
Unlike garden variety torts or most contract claims, a violation of Chapter 93A (even a technical violation with little to no actual damages) allows for the award of attorney’s fees. Also, a “willful or knowing” violation allows for an award of double or treble damages.
5. Responding with a Reasonable Offer limits damages that may be awarded in the future.
If the response to the 93A Demand includes a reasonable offer of settlement, and that offer is rejected, any future award is limited / reduced to that offer. It also precludes attorney’s fees and multiple damages. We always recommend considering an offer if the insured’s liability seems likely. Note: a reasonable offer of settlement is required whenever an insured’s liability is “reasonably clear,” but that is a topic for another day.
This update reports developments in the law. It is not intended to provide legal advice. It is circulated to our clients and others in the insurance industry and may be considered advertising.
Share this article:
