In Pennsylvania, it is not uncommon for insureds to assert claims against insurance companies for violation of the Unfair Trade Practices and Consumer Protection Law (UTPCPL). In insurance cases, such claims were historically brought alongside breach of contract and insurance bad faith claims and often were not the focus of the litigation. In 2020, the Pennsylvania Superior Court confirmed that the UTPCPL does not apply to the handling of insurance claims, further reducing the emphasis on UTPCPL claims in insurance litigation. However, the Pennsylvania Supreme Court recently imposed a strict liability standard for the UTPCPL, which lowered the burden of proof for insureds and may result in increased litigation against both insurance companies and insurance agents.
Pennsylvania’s Unfair Trade Practices and Consumer Protection Law was enacted in 1968 to protect consumers “from fraud and unfair or deceptive business practices.” See Commonwealth v. Peoples Benefit Services, 923 A.2d 1230 (Pa. Commw. Ct. 2007). The UTPCPL prohibits numerous specific “unfair or deceptive acts” and also contains a catch-all provision. As originally enacted, the catch-all provision prohibited “any other fraudulent conduct which creates a likelihood of confusion or of misunderstanding.” The Pennsylvania courts required proof of common law fraud for a plaintiff to recover under the original catch-all provision. See e.g., Hammer v. Nikol, 659 A.2d 617 (Pa. Commw. Ct. 1995). Because common law fraud requires proof that the defendant acted intentionally, UTPCPL claims brought pursuant to the original catch-all provision failed unless the plaintiff could establish that the defendant intentionally engaged in conduct that created a likelihood of confusion.