INSURERS BACK MD. CLAIMS LAW:

The Property Casualty Insurers Association of America has filed an amicus brief before the Maryland Court of Appeals, urging the court to affirm a lower court decision upholding a law, in existence since 1872, that establishes the core requirement of “reliance” for fraud claims. “Historically in Maryland, as well as the other 49 states, reliance has been a core element for a claim based on fraud, and should remain so,” Robert Hurns, counsel for PCI, said. In Smith v. Lead Industries Association Inc., the trial court held that a claim for fraud based upon intentional or negligent misrepresentation requires that the plaintiff relied upon the alleged fraudulent statement. The plaintiff appealed that ruling. The issue is whether plaintiffs can bring claims for common-law fraud when they did not rely on the misrepresentations at issue. PCI, along with the American Tort Reform Association, the U.S. Chamber of Commerce, and other business groups urged the court to maintain the concept of reliance. According to Hurns, overturning the decision would represent a “radical and unwise departure from traditional tort law.”