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Hastings Law Journal

Abstract

In 1979, in Royal Globe Insurance Co. v. Superior Court, the California Supreme Court, relying on provisions of the Unfair Practices Act in the California Insurance Code, approved the institution of a direct action by third party claimants injured by insurers' unfair claims settlement practices. This Note assesses the validity of the Royal Globe decision by examining judicially declared bad-faith tort doctrine and tracing the history and purposes of the Unfair Practices Act. The Note concludes that the ruling in Royal Globe does not comport with the literal meaning or intent behind the Unfair Practices Act. Finally, the Note discusses recent legislative attempts to alter the effects of the Royal Globe decision.

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