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Allstate Insurance Company v. State Farm Mutual Insurance Company No. 43, Sept. Term, 2000 - page 20 / 26

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have made, and what disposition it might have reachedin settlement if it had received notice before the

verdict was rendered in this case.” Id. at 295-96, 482 A.2d at 507. Compare, however, Scottsdale

Ins. v. American Empire Surplus Lines, 791 F. Supp. 1079 (D. Md. 1992).

Therehavebeenanumberofattemptsatdevisingastandardfordeterminingactual prejudice in

failure of notice or cooperation cases, ranging, on one end, from a requirement that the insurer demonstrate

that, but for the breach, the result at trial either would have been different or, as in the Harleysville

approach, a substantial likelihood that the resultwould have been different, to a “per se” approach, that

theinsured’sfailureitselfestablishesprejudice. Theproblemthatweseewithmany of the approaches, as

articulated, is that they tend to be keyed to the facts or circumstancesof the particular case and do not take

suf icient account of the very different circumstances, and thus the very different kinds of prejudice, that can

be presented by breaches of these provisions. It is very dif icult to fashion a workable “one size its all”

standard.

If an insurer is not givenprompt notice of the accident or of the claim, it may (or may not) lose the

abilityto discover relevant evidence, particularly the identity of witnesses and their contemporaneous

recollections. As we pointed out in Warren v. Hardware Dealers Mutual Fire Ins. Co., 244 Md.

471, 224 A.2d 271 (1966) and as the Harleysville court opined, whether that lost opportunity results

inprejudicecannotreallybeknown,ifatall,untila tertrialandverdictinthetortaction.3 Eventhen,there

3Given that the declaratory judgment action was tried before damages were ascertainedin the tort action, the question of prematurity was raisedin the trial court, but not found persuasive. The court noted that, because there had been a inding of liability against Kirby and no one disputed that Gregorie was injured and would likely recover substantial damages, no purpose would be served by waiting. Neither partyhas complained about that decision, so it is not an issue in this appeal. We suggest, however, that,

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