Bifurcation of the trial required in insurance bad faith cases
Evidence relevant only to the question of bad faith may only be heard by the jury in the second phase of a bifurcated trial, a panel of the Mississippi Supreme Court held last week. Link
The panel held the trial court erred in submitting the issues of liability and damages for breach of the insurance contract and punitive damages at the same time. Section 11-1-65 of the Mississippi Code provides that "[i]n any action which the claimant seeks an award of punitive damages, the trier of fact shall first determine whether compensatory damages are to be awarded and in what amount." If an award of compensatory damages is made, the court then will hold "an evidentiary hearing before the same trier of fact to determine whether punitive damages may be considered."
The Court reasoned the legislature intended "to create a barrier between testimony regarding the fundamental issue of liability and the inflammatory issue of egregious conduct" to assure the jury is insulated from both the issue and the evidence regarding punitive damages until after it has heard evidence concerning the basic issue of the culpability of the defendant."
The problem with the court's reasoning is that often the evidence on "culpability" is the same as the evidence establishing "egregious conduct."