They have an enormous financial exposure and tremendous amount to lose if judicial decisions harmful to their industry and company interests are allowed to stay on the books. Outrageous, in essence, they engage in the practice of buying decisions that go against them by immediately paying the winners the amount awarded or more, provided the court vacates its decision. The policyholder and winning party often is willing to settle even after obtaining a favorable decision, because appeals by the losing side can delay or prevent payment of judgment until all appeals are concluded which can take a number of years. Therefore, to secure the benefit of its victory, the policyholder will often agree to vacate the decision in order to get its money sooner rather than later. If the policyholder does not agree, many times insurance companies will offer the policyholder immediate payment of even more money than the court awarded in its decision if the winning party will agree to Vacatur.
Courts frequently consent to that request since both parties are making the request.
The practice of Vacatur in effect changes, misrepresents and rewrites history, the law and outcomes of future cases. Other losers are all of the taxpayers and those who use the courts to resolve a dispute. Vacatur affects every court system and area of the law in America. It is estimated by knowledgeable attorneys however that as much as fifty percent of judicial decisions favoring policyholders are wiped off the law books by the insurance industry by such Vacatur actions. FBIC believes that the practice of Vacatur should stop.