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Simple English definitions for legal terms
collusive suit
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A quick definition of collusive suit:
A collusive suit is when two or more people pretend to disagree in court, but they actually agree on what the outcome should be. This is not allowed in federal court because it is not fair. Sometimes people might try to do this to get money from insurance companies, but insurance contracts have rules to prevent this from happening. The insurance company has the right to provide a lawyer and the policyholder has to help the insurance company. This helps to make sure that everyone is being honest in court.
A more thorough explanation:
A collusive suit, also known as a friendly suit, is a legal case where the parties involved are not actually in disagreement but are working together to influence the court's decision. This type of lawsuit is not allowed in federal court because it is not adversarial.
One example of a collusive suit is when two people agree to stage a car accident to collect an insurance payout. However, insurance policies usually have exclusions for injuries caused intentionally, which means that the insurance company will not have to pay out if they can prove that the accident was staged.
Collusive suits can also occur when someone accidentally causes harm to a friend or family member. In these cases, the risk of a collusive suit is high because the parties involved may not be in disagreement about the need for compensation.
To prevent collusive suits, insurance policies often include a duty to defend, which means that the insurance company has the right and obligation to provide and control legal counsel for any lawsuit involving a claim for coverage. The policyholder also has a duty to cooperate with the insurance company's reasonable interests, and if they breach this duty, the insurance company may not have to pay out.
Overall, collusive suits are not allowed in federal court and are often prevented by insurance policies that include exclusions for intentional harm and a duty to defend.