Legislative stalemate, standardized judicial policymaking, and stimulating claimants’ capacity

The main thrust of this article is that the aforementioned atypical form of judicial intervention is associated with lawmakers’ failure to reform a crucial aspect of health policy. In this light, the theoretical groundwork can be divided into two critical facets: the relationship between legislative stalemate and the judicial crafting of public policy, and the specific characteristics of standardized mass judgments on social rights and the judicial stimulus to litigate.

The connection between lawmakers’ gridlock and judicial policymaking is not a new topic in the law and courts literature. Previous scholarly works have posited that Congress’s promulgation of statutes reflects the ability of organized political actors to impose their policy preferences, implying two assumptions of judicial behavior pertinent to the discussion at hand. The most obvious is that courts regularly follow the majoritarian groups that win elections and then dominate the political landscape in stable democracies (Dahl Reference Dahl1957). This also has significant implications for judicial behavior before legislative gridlock. When parties cannot impose their policy preferences in lawmaking or are unable to reach a basic legislative agreement under Pareto-optimal terms—even when they simultaneously recognize the necessity of legal reform—they create an opportunity for courts to exercise discretion.Footnote ⁴ The study conducted for this article demonstrates that if there is a legislative stalemate on salient policy matters that most parties consider suboptimal, then courts craft policy even when there is no legislative deferral. To be clear, this article does not argue that legislative stalemate causes judicial policymaking but that it can create an opportunity for it. Several other hypotheses, such as legislation refused by an incoming regime or a large segment of the population, can provide a similar opportunity.

At a micro level, legislative stalemate—and some forms of deliberately incomplete statutes—creates an opportunity for strategically driven high court judges to engage in policymaking (Villalonga Reference Villalonga2024a).Footnote ⁵ First, stalemate signals that a policy area remains partially unsettled. In tackling the pressing matters that elected officials have not adequately addressed, high courts can leverage their authority by enhancing their prestige and advancing their policy preferences (Kapiszewski et al. Reference Kapiszewski, Silverstein, Kagan, Kapiszewski, Silverstein and Robert2013, 406). This could be particularly relevant in some postauthoritarian states, such as Chile, where many judges seem to bear institutional guilt for the judicial branch’s failure to address human rights violations during the military dictatorship (Huneeus Reference Huneeus2010). Legislative gridlock, then, presents a path for judges to expiate that inaction by appearing responsive to new social challenges. Second, stalemate helps judges detect areas where a political majority cannot effectively retaliate against intervening judges. This factor is also relevant for other high Latin American courts, where formal or informal backlash has been a typical trait of local politics (Helmke Reference Helmke, Hübner, Gargarella and Guidi2022).

Concurrently, this article addresses a particular type of judicial policymaking—specifically, the myriad repetitive rulings and the associated judicial stimulus for litigation through fee shifting. The literature has largely explained how organized groups that draw on legal claims, legal support mechanisms, and political advocacy to achieve legal reform have driven legal mobilization on the demand side (e.g., McCann Reference McCann1994, Epp Reference Epp1998). When the literature has delved into judges’ initiatives to achieve legal change, it has highlighted how courts foster cause lawyering and seek the support of professional organizations, phenomena that Feeley and Rubin (Reference Feeley and Rubin2000) describe in their account of the transformation of US prisons. In most of those cases, actors embed deep social and political preferences while looking to achieve broad legal reform.

Although further research on the perceptions of judges, lawyers, and claimants is needed, this case study does not seem to match a bold understanding of social rights that trigger legal mobilization in the terms described by Taylor (Reference Taylor2023); rather, it seems to represent a more discrete policymaking dynamic. Although the Chilean judiciary was historically a hierarchical organization (Hilbink Reference Hilbink2007), in this case study there is no trace of top-down deliberate coordination, at least initially. The judgments show no robust commitment to neo-constitutional doctrines like the high courts’ expansive role in adjudicating rights, such as currently exists in the lower ranks of ordinary courts (Couso and Hilbink Reference Couso, Hilbink, Helmke and Rios-Figueroa2011, 112–117). The Chilean high courts’ gradual response blends the questioning of a specific public policy and the subtle management of predictability and monetary incentives to stimulate litigation. Such a form of judicial policymaking seems to involve a set of aggregated judicial choices that over time have progressively become consistent judicial behavior.

The extensive literature about how courts impact the socioeconomic rights of vulnerable populations in Latin America addresses judicial intervention in public policy, focusing on the different effects of landmark structural rulings (e.g., Rodriguez-Garavito and Rodríguez-Franco Reference Rodríguez-Garavito and Rodríguez-Franco2015; Sigal et al. Reference Sigal, Rossi, Morales, Langford, Garavito and Rossi2017). This is not to say that the literature on the impact of Latin American courts has not recognized the mounting number of routine judgments associated with social policy, such as the tutelas on health-care coverage in Argentina and Brazil (Bergallo Reference Bergallo, Yamin and Gloppen2011; Ferraz Reference Ferraz2021, 103–126). The point is that such trailblazing literature relies on routine individual judgments to illustrate the proliferation of litigation, not on a specific dynamic of judicial policymaking. Accordingly, this article partially addresses a gap in the literature by demonstrating that individual remedies occasionally can serve, though in a limited sense, policymaking purposes as well.

While legal scholars in the region frequently conceptualize socioeconomic rights through a social dimension, most litigation pertaining to these rights centers on individual injunctions. This trend persists insofar as most courts are reluctant to issue large-scale, structural rulings (Sigal et al. Reference Sigal, Rossi, Morales, Langford, Garavito and Rossi2017, 153). Individual injunctions are perceived as less politically contentious for the judiciary, given that their enforcement typically encounters minimal political resistance. This approach aligns with conventional forms of adjudication and traditional interpretations of the principle of the separation of powers. Nevertheless, in contrast to structural remedies, individual injunctions offer limited capacity to address systemic institutional deficiencies in social welfare and predominantly benefit middle- and upper-class litigants who possess greater access to judicial mechanisms (Landau, Reference Landau2012, 230–236).

Literature on cases involving individual injunctions related to health policy highlights a tendency for courts to overlook critical factors, including the broader implications of their decisions on public health budgets, the fiscal burden imposed on other beneficiaries of the health-care system, the authority of health-care agencies to prioritize expenditures, and the legitimacy of judicial involvement in resource allocation. This oversight is often rooted in misperceptions, as the cumulative impact of numerous individual lawsuits can result in significant economic costs and far-reaching policy consequences (Landau, Reference Landau2012). In contrast, evidence from health rights litigation in Brazil indicates that, in comparison to individual injunctions, courts tend to exercise greater restraint when adjudicating structural claims. In such cases, they are more likely to consider these broader factors, often deferring to the judgment of legislators and health-care agencies to justify their decisions (Wang Reference Wang2013, 25–26).

The present study shows that ordinary Chilean high courts conducted policymaking through the management of individual injunctions without the binding effect of precedents, which is largely determined by specific legal regulations. The Chilean Constitution does not explicitly guarantee the right to health, although it does recognize the right to choose between different health providers.Footnote ⁶ Additionally, after a market-oriented turn that emerged during the military dictatorship and subsequent democratic governments, jurisprudence on fundamental rights has extensively resorted to private property to shield patrimonial interests, ranging from grades in educational institutions to civil servants’ entitlement to public office (Vergara Reference Vergara1991; Olave Reference Olave1996). This far-reaching doctrine on property rights explains why claimants have resorted to this type of argument on ISAPRES annual premium adjustments. At the same time, Chilean ordinary high courts (i.e., national appellate courts and the Supreme Court) have traditionally been restrictive when applying the rules of standing to sue, thus hindering the option to frame this issue under a collective-interest umbrella or as structural decisions. Although high courts can issue rulings on recursos de protección, theoretically with erga omnes effects, they usually have preferred to grant injunctions with legal consequences that apply only to individual litigants (Ried Reference Ried Undurraga2024). Other legal means, such as the Constitutional Tribunal’s judicial review and consumer protection proceedings, have likewise not endorsed the use of structural decisions to settle this matter.Footnote ⁷

Beyond legal technicalities, this case study is not only about the resolution of myriad individual cases; it is also about judicial policymaking. The mechanism of judicial intervention described here operates through two lines of action. First, ordinary Chilean high courts have increasingly asserted that the ISAPRES annual adjustments to health-care contracts—expressly permitted by law—imposed a patrimonial burden that affected the insured’s property rights. Accordingly, these courts applied a constitutional standard of reasonableness to a dispute about contractual determination without annulling statutory provisions. Courts gradually began to grant almost all the writs filed on these grounds, rationalizing the procedure and reducing uncertainty about the results. By standardizing those decisions at low political cost, courts transformed the disputes into a commodity by ensuring a high likelihood of a claimant’s success.

Second, courts additionally began to indemnify claimants by imposing the responsibility for attorneys’ fees on insurers, even when this kind of order was extremely unusual for recursos de protección. This change in uniformly applying a rule on fee shifting is not irrelevant in terms of incentivizing claimants’ legal mobilization (Braeutigam et al. Reference Braeutigam, Owen and Panzar1984; Hylton Reference Hylton1993). Since Mark Galanter’s seminal work on the aptness of litigation to bring social change, the sociolegal literature has distinguished between the likely success of “repeat players” who access courtrooms on a regular basis and the low capacity of inexperienced “one-shotters” to get favorable judicial outcomes (Galanter Reference Galanter1974). Longitudinal analysis and comparison in several jurisdictions globally confirmed Galanter’s insight over time and settings, which underscores party capabilities as a critical aspect of legal mobilization (e.g., Songer et al. Reference Songer, Sheehan, Brodie Haire, Herbert and Susan2003; Haynie et al. Reference Haynie, Randazzo and Sheehan2024). The evidence analyzed here shows that by ensuring favorable outcomes and awarding claimants indemnity costs, courts deliberately provided a support structure to litigation that channels access to justice on the demand side. In so doing, they at least partially incentivized legal mobilization and ensured compliance with a judicially selected policy outcome.

Methodology and data

This study demonstrates the close association between legislative stalemate, the mass standardized rulings on the ISAPRES annual plan adjustments, and the stimulus to litigation. In concrete terms, the sequential analysis identifies thresholds above which legislative stalemate and other political milestones begin to gradually trigger the previously described model of judicial intervention.Footnote ⁸ By observing this association, the present study discards alternative explanations for judicial behavior, such as a mere transformation of litigiousness from the demand perspective. The article complements statistical data on legislative bills, judgments, litigation, and fee amounts with qualitative evidence, such as anonymized interviews with three former judges in office at appellate courts during the 2010s, as well as press coverage.

At this juncture, the study of legislative stalemate requires methodological clarification. This article systematizes legislative gridlock in a specific area, looking at the number of undecided bills that aimed to modify the private health-care system or its price adjustment mechanisms introduced by the Executive or congresspeople in the Chamber of Deputies or the Senate between 1990 and 2019 (i.e., from the return of democracy through the year immediately preceding the COVID-19 pandemic and the revision of Chile’s constitutional system). Accordingly, the analysis presented here is more detailed than traditional academic studies on gridlock, which focus on the entire share of salient bills that remain unresolved at the end of the legislative period (e.g., Binder Reference Binder2003, 34–38).Footnote ⁹ The compiled bills resulted in a discrete sample (N = 63), and they were coded to indicate their introduction dates. The analyzed bills serve as a proxy for understanding how legislators approached regulating ISAPRES premiums. That information was then supplemented with other materials, such as Constitutional Tribunal decisions and documents from the presidential ad hoc commission on health-care reform.

To analyze judicial behavior, a random sample of recursos de protección was selected that contested the annual increases of base-price premiums that ISAPRES imposed between 2003 and 2015 (i.e., from the year when an uptick in the number of claims was noted until the number of standardized judgments stabilized). Although there are many areas related to private health-care delivery that have spurred significant litigation against ISAPRES, the recursos de protección against the annual increases of base-price premiums represent the bulk of the standardized mass litigation discussed in this article (Carreño Reference Carreño2021). The judgments used in the present study were collected from the Chilean judicial branch’s online database, which is publicly available. As a search term, the examination employed “ISAPRE” as a legal corporate defendant, selecting only the judgments related to annual premium increases and eliminating other types of cases. A sample of 1,761 cases was selected that were heard primarily in Santiago’s appellate courts, with fewer in Valparaiso’s and Concepción’s.Footnote ¹⁰ Most of the litigation in Chile takes place in these three jurisdictions, and those courts possess reliable records going back to about the year 2000. More than eight thousand judicial documents in the case sample were reviewed and then coded to observe patterns in judging. It is critical to note that Chilean appellate courts review recursos de protección in the first instance and that the parties can appeal decisions to the Supreme Court. Using the sample of appellate court cases as a stepping stone, the writs of appeal heard by the Supreme Court were tracked and similarly scrutinized.

The politics of ISAPRES premium regulation

The Chilean health-care system includes a mandatory payroll contribution based on workers’ earnings, which contributors can allocate to a public or private health-care delivery system. The military dictatorship established this dual health-care structure during the early 1980s as part of a broader effort at institutional change that included economic liberalization and a market-oriented transformation of social security (Castiglioni Reference Castiglioni2001). Regarding private health-care delivery in particular, this dual scaffolding introduced new private actors into the delivery of health-care services (ISAPRES) while allowing contributors to freely choose health plans according to individual risk assessment and financial capacity. In this way, those who can afford to make higher payments than the basic contribution can access health plans with more significant benefits than ISAPRES offers (Nancuante et al. Reference Nancuante, Romero and Sotomayor2012, 315–320).

After the return to democracy in 1990, the new authorities formed a center-left coalition (Concertación) and maintained the dual structure of health-care delivery. This continuity can be partly explained by Chile’s constitutional system, which incorporated mechanisms to make profound legal changes difficult (Fuentes Reference Fuentes2012, 27–54). At the same time, the new authorities and the Chilean public viewed the private health-care system as a successful experience that efficiently covered about 30 percent of the population and attracted significant capital investment to improve clinical infrastructure (Bruce Reference Bruce2000). This optimistic stance on private health institutions, however, did not prevent the new democratic government from implementing specific reforms, such as establishing an agency to oversee ISAPRES (Superintendent of Private Health Insurance Institutions) (Manuel Reference Manuel2002, 67; Martínez-Gutiérrez and Cuadrado Reference Martínez-Gutiérrez and Cuadrado2017, 122).Footnote ¹¹

In the late 1990s, significant criticism of the health-care system emerged from the technocratic sphere. In 1997, a Ministry of Health special commission and the first studies in political economy recommended a revision of the national health policy. These studies indicated that the mushrooming of health plans created a risk selection system that users could not evaluate as a result of asymmetrical information and a lack of uniformity in benefits (Larrañaga Reference Larrañaga1997; Fischer Reference Fischer1998).Footnote ¹² At the same time, the country’s leading schools of economics conducted other studies that aimed to create a health-cost index that would limit ISAPRES plans’ annual premium increases that, until then, were under the free market.Footnote ¹³

In the early 2000s, the first criticisms vis-à-vis ISAPRES annual premium increases began to emanate from the social and political sectors. In 2000, some clients of these institutions established an association to address the failures of private health-care delivery in Chile (CORPUSAPRES) (Barría Reference Barría2001, 27–28). Similarly, the Chamber of Deputies, through an acuerdo (agreement), unsuccessfully asked the executive branch to create a streamlined procedure to allow the ISAPRES insured members to file complaints against those entities.Footnote ¹⁴ As Figure 1 shows, the aforementioned acuerdo, authored by two deputies from different sides of the aisle, marks the inauguration of other initiatives to modify several aspects of the private health-care market, like restricting ISAPRES capacity to increase the plan premiums annually or to disallow increases for the elderly.Footnote ¹⁵

Figure 1.

Number of bills on ISAPRES and political milestones (1990–2019)

After a contentious period of legislative debate, the aforementioned initiatives converged in a package of reforms (Martínez-Gutiérrez and Cuadrado Reference Martínez-Gutiérrez and Cuadrado2017, 122). The new laws included three critical innovations: the establishment of a system of minimum coverage that included treatment for predetermined common illnesses (explicit health warranties; GES by its Spanish acronym); the elimination of risk selection in premiums unless a table of variables related to gender and age applied, and most importantly, the establishment of limitations on the ISAPRES ability to increase premiums according to specific average values, which were applicable annually to all individuals affiliated with the same health plan (Rojas Cabello Reference Rojas Cabello2005, 291; Soto Reference Soto2009, 172–74).Footnote ¹⁶ By that time, the literature considered this package the only large-scale national health reform that had been accomplished in Latin America (see, e.g., Mesa-Lago Reference Mesa-Lago2007, 191).

The enactment of Law No. 20,015 in May 2005 did not eliminate legislative debate on the issue. In contrast, the subsequent months brought growing pressure from the legal community to reform price-adjustment mechanisms. In September 2005, the National Antitrust Office presented an indictment for price collusion against some of ISAPRES. This action, which received substantial media attention, accused these institutions of coordinating price increases and concurrent reductions in benefits, taking advantage of the difficulties involved in comparing plans.Footnote ¹⁷ Econometric studies that modeled price fluctuations and internal administrative costs revealed that the collusive behavior was part of ISAPRES business practices (Agostini et al. Reference Agostini, Saavedra and Willington2011). In divided decisions, the Chilean Competition Court and the Supreme Court acquitted the accused ISAPRES in 2007; majorities in both courts held that economic behavior is in itself insufficient proof—a standard that subsequent legislation changed (Castro and Bahamóndez Reference Castro and Bahamóndez2009). However, legal and political actors assumed that ISAPRES price collusion was undeniable (Agostini et al. Reference Agostini, Saavedra and Willington2007). This entire process damaged the standing of ISAPRES with the public and unleashed several congressional attempts to reform the private health-care delivery market, but none of these efforts was fruitful.

After a brief pause in 2009, a presidential election year, calls for legal reform resurfaced between 2010 and 2011. In 2010, the Constitutional Court held that considering gender and age in the determination of ISAPRES premiums was unconstitutional, with erga omnes effects.Footnote ¹⁸ At the same time, the Court held that private health-care delivery was part of social security, requiring a minimum degree of uniformity (Vivanco Reference Vivanco2010). This decision garnered much public attention and again called the ISAPRES regulation into question. In response, the executive convened an advisory commission to explore a new guaranteed health program that could be applied to the ISAPRES.Footnote ¹⁹ Again, lawmakers introduced a new wave of bills to reform price adjustments, ban the use of the gender and age tables, and eliminate annual increases. These bills emanated from all sides of the political spectrum, but they again failed to advance in Congress.

According to Figure 1, the primary efforts to reform the ISAPRES ended in 2012, mainly because of the failures of the previous bills, introduced between 2006 and 2011. At the same time, the Constitutional Tribunal held that the annual premium increases were constitutional as long as they were reasonably justified, thus closing the door to a structural judgment via judicial review. There were some additional short-lived efforts to change the legislation, including the establishment of a new presidential advisory commission in 2014 to restructure private health-care, but those attempts were also unsuccessful.Footnote ²⁰

By this time, although most political actors agreed that the mechanisms behind ISAPRES price adjustments were deficient, they could not agree on a substantial reform package (Cid Reference Cid2011; Sánchez and Nancuante Reference Sánchez and Nancuante2013). In concrete terms, no actor could pay the political transaction costs required to reach that goal. Center-left parties disagreed, as some pursued a significant restructuring of the health delivery system that segued into a national public program, while others wanted a more specific reframing of price-fixing mechanisms. Meanwhile, the center-right parties were split between those who attempted to establish a price index pegged to the growing costs of health delivery and those who considered the 2005 reform to be a substantive renunciation of the previous model. Those divisions persisted in Congress and also when the two main coalitions gained control of the executive during different presidential periods.

The judicial response

This section explains how the mass rulings evolved in association with the politics of ISAPRES premium regulation. In doing so, the analysis is divided into two stages: Phase 1, in which courts gradually reacted to the increasing political pressure for legal reform emerging immediately after the promulgation of Law No. 20,015 (2006–2010), and Phase 2, in which courts coordinately reacted to the legislative gridlock that occurred from 2011 onward. Together, these two phases show the trajectory of the Chilean courts’ rulings toward incrementally shaping a policymaking strategy. For analytical purposes, the examination fundamentally employs some testimonies, as well as statistics on judgments and fee awards (Figure 2), the percentage of dissenting votes in finding for the plaintiff (Figure 3), and the longitudinal distribution of cost amounts within Santiago’s Appellate Court (Figure 4).

Figure 2.

Evolution of judgments and attorneys’ fees awards. Santiago Appellate Court

Figure 3.

Dissenting votes (only considering findings for the plaintiff. Santiago Appellate Court)

Figure 4.

Cost amounts. Longitudinal distribution at the Santiago Appellate Court

Phase 1: Ruling for plaintiffs, attorneys’ fees, and ISAPRES legitimacy, 2006–2010

ISAPRES-related litigation through the recursos de protección has been a topic of interest to legal scholars since the mid-1990s, exhibiting high rates of success for plaintiffs—for all sorts of claims.Footnote ²¹ In this vein, litigation on ISAPRES annual premiums is a clear example of particular judicial contention. By the early 2000s, ISAPRES plans increased their premiums, asserting that the increases were due to growing costs in the health-care industry and the state’s withdrawal of vouchers that had subsidized lower-income individuals (Martínez-Gutiérrez and Cuadrado Reference Martínez-Gutiérrez and Cuadrado2017, 122). Although the contracts were indefinite, the law allowed the companies to raise premiums annually without justification or limitation, except they had to charge the same price to all individuals affiliated with a program and ISAPRES were precluded from basing increases on the insured’s preexisting health conditions. The ISAPRES only needed to communicate decisions through a letter and, if a member disagreed, offer a plan with similar benefits (Nancuante et al. Reference Nancuante, Romero and Sotomayor2012, 359–360).

By the late 1990s, the reasoning behind the ordinary Chilean high courts’ decisions on recursos de protección about health-care issues offered typical rationales. Courts usually held that ISAPRES annual adjustments of health-care contracts, which were expressly permitted by statute, constituted a patrimonial burden that affected the insured’s property rights (a kind of property over contractual rights, a well-established doctrine by that time) (Olave Reference Olave1996). Moreover, the rulings indicated that those adjustments lacked sufficient justification since the ISAPRES failed to explain the cost increases. Less frequently, the judgments held that the rises in premium prices were illegal acts, as they constituted new health plans or affected the right to choose a different health-care delivery system. Most of the time, however, the courts did expound on how the increases directly affected constitutional rights (Gómez Bernales Reference Gómez Bernales2005, 428–447). Those rationales—particularly the idea of the premium increase as an undue patrimonial burden—constituted an almost settled, uniform doctrine in the years immediately preceding the passage of Law No. 20,015 (2005), and courts refused claims only for procedural reasons, such as the fifteen-day deadline to present the writs. Before 2005, the number of related writs was small, although they were growing each year. Claimants would almost always present these writs in Santiago since several appellate courts in other provinces had ruled that the writs must be filed in the cities where the ISAPRES had their respective headquarters.

After the enactment of Law No. 20,015, significant changes occurred that can be characterized as variations associated with developments in the political arena. The ruling pattern of the Santiago Appellate Court, the most important forum in the country for litigating these types of cases, provides a good illustration of these variations. As shown in Figure 2, the number of decisions in favor of claimants decreased in the first semester of 2006, when courts understood that the annual ISAPRES price increases fell within the scope of the new law. However, courts rapidly reversed this trend and returned to pre-2005 doctrine on the matter. Most importantly, the decisions favoring claimants began to pair with the awards of attorneys’ fees. Since the publicity surrounding the National Antitrust Office indictment and a new wave of legislative bills attempting to reform private health care in 2006–2007, the Santiago court determined that ISAPRES did not have enough justification to oppose the claimants’ petitions and ordered them to pay claimants’ attorneys’ fees.

According to Figure 2, the increased pairing of decisions for the plaintiff and against ISAPRES, ordering the latter to pay attorneys’ fees, represents a critical watershed moment in the development of litigation and mass rulings in this area. Although the regulation of the recurso de protección expressly allowed courts to award attorneys’ fees, this was a practice that courts did not regularly apply before 2005. Several court orders required the defendant ISAPRES to pay attorneys’ fees, although in general this remained relatively low. At that time, the differences between the rates for finding for the claimant and the rate of fee shifting ran between 25% and 35%. Moreover, when a court found in favor of ISAPRES, the present study found few accompanying orders to pay the claimants’ attorneys’ fees. That trajectory changed in the first semester of 2006, when the average amount of attorneys’ fees awards peaked, and the two rates began to coincide in the following semesters.Footnote ²²

After 2006, judges also began to apply the same reasoning on the patrimonial burden and the lack of justification for the increases in every case, and the same fee condemnations, which reveals consistent negative perceptions of ISAPRES and the legitimacy of their price-fixing practices. The testimonies of the interviewed judges confirm their perception of the lack of legitimacy of ISAPRES in this matter. In the words of one of them: “The judges knew what was happening with the ISAPRES; we are also their clients and observed what was going on. Their practices were abusive and initially there was [an] environment for a reform.” Likewise, another asserted: “Through our rulings, we sent a message for this situation to be politically addressed in Congress. We all agreed, except regarding the amount of the fees.”

The evidence suggests that the increasing frequency of fee indemnity awards to claimants not only reflected growing scrutiny of ISAPRES practices but also triggered litigation, particularly after 2006. At that time, the first law firms devoted almost exclusively to this type of litigation began to crop up, filing almost six thousand recursos de protección in the Santiago Appellate Court alone by 2010.Footnote ²³ As part of their business, these law firms did not directly bill their clients; instead, they collected the fees that the courts had ordered the insurers to pay. As Figure 4 shows, those fees could be very high. The judges were aware that the imposition of court costs encouraged litigation. One provided a rather vivid description: “We all saw a real business emerge that moved a lot of money through these cases. Small law firms appeared, occasionally acting as informal agents without having authorization from the affiliates. Apparently, some of them had contacts in public services and companies to obtain lists of workers and sometimes litigated on their behalf.”

Figure 3 shows that this process was not free of contention inside the halls of the courts. Looking at these decisions that found for the plaintiffs, dissenting votes began to noticeably emerge in 2006, recurring again between 2009 and 2011. Those votes were primarily cast by ad hoc judges who were on judicial panels but did not belong to the judicial branch (abogados integrantes), or by a few appellate court judges who consistently found that ISAPRES had acted lawfully. There were also variations, not explicitly expressed, regarding elements of substantive justice (e.g., a claimant’s health condition and age, amount of the premium increase). This debate also appeared in the Supreme Court’s opinions in reviewing decisions from the appellate courts between 2006 and 2010. In those cases, the Court almost always upheld the previous verdict despite a few appellate opinions that had overruled first-instance decisions. However, the dissenting votes and the few Supreme Court opinions are a small anomaly, not a complete alteration of the pattern illustrated in Figure 2.

Phase 2: The standardization of mass rulings and the commodification of litigiousness, 2011–2020

By 2011, it was clear that there would not be a notable change to ISAPRES price-fixing mechanisms through legislation. No bill introduced between 2006 and 2010 had advanced, which confirms the existence of a stalemate. This legislative gridlock continued during subsequent years. At the same time, the Constitutional Tribunal came down with decisions against ISAPRES, pronouncing the unconstitutionality of the statutory authorization to rely on tables of gender and age in determining premiums, thus further damaging the standing of ISAPRES in the public’s eye (Zúñiga Reference Zúñiga2013, 515). But in 2012, the same Constitutional Tribunal held that the annual increases passed constitutional muster as long as the ISAPRES provided enough justification for the increases. These circumstances all confirmed that no systematic solution was forthcoming from Congress or other fora. An interviewed judge bitterly asserted, “We enacted myriads of judgments but the politicians never answered.” In a path-dependent dynamic, the confirmation of the stalemate drove ordinary courts to demand even more from ISAPRES by requiring justification for the plan increases (García and Verdugo Reference García and Verdugo2014, 97–105; Arellano Reference Arellano2017, 393–395), standardizing rulings, and commodifying litigation.

First, ordinary high courts began to approve almost all the recursos de protección filed on the annual ISAPRES increases, thereby reducing the uncertainty about the results of those claims. As illustrated in Figure 2, the Santiago Appellate Court found for the claimants in 83 percent of the ISAPRES cases filed during the first semester of 2010, and two years later, in 100 percent of those cases, with the rates of cases awarding attorneys’ fees to plaintiffs following similar patterns. An explanation for the high rates could be associated with how law firms learned to filter potential clients and manage deadlines for filing claims.Footnote ²⁴ However, the precise timing of this development and its pairing with the fee orders support the contention that this was more than an adjustment on the demand side. The orders against ISAPRES to pay attorneys’ fees in those cases reveal that courts deduced that the insurers did not possess the legitimacy to litigate against the claims, as many rulings directly asserted.

Second, Chilean appellate courts and the Supreme Court deployed several methods to streamline the recursos de protección procedures. These efforts were made to confront a growing docket, but they also endeavored to tackle this issue up front. Until 2011, the procedures followed the regular steps established in a 1992 judicial regulation by which courts asked the ISAPRES to appear, calling for a hearing in which parties could make oral presentations, and then determining fee amounts in a subsequent judicial act. Nonetheless, courts gradually modified the regulation to expedite the procedure. In 2011, they used templates to resolve repetitive judgments in a growing number of cases, replacing the ad hoc reasoning typical of adjudication (García and Verdugo Reference García and Verdugo2014, 94).

By 2012, this kind of material support, repeating almost identical decisions hundreds of times, became the regular practice, which included incorporating the fees award into a judgment’s running text. Courts also began to resolve writs without calling the parties to oral hearings, and they established new departments and offices to handle these procedures. In some instances, courts even joined several cases that had similar facts.Footnote ²⁵ The Supreme Court incorporated several of these innovations in a new 2015 regulation on recursos de protección, which seemingly addressed the proliferation of litigation in this area. As a legal scholar explained, “This is not really a trial; it has become a mechanical judicial function.”Footnote ²⁶

Courts also triggered litigation through their subtle management of the orders on attorneys’ fees. In so doing, they commodified this kind of claim by offering a high probability of success and standardizing the fees that served as law firms’ compensation. The Appellate Court of Santiago again provides an illustrative example. Figure 4 shows that when the ISAPRES lost much legitimacy between 2005 and 2006, the court continued to award relatively high attorneys’ fees, which peaked in 2006. However, when the court received a growing number of writs, courts gradually diminished the average fee award.Footnote ²⁷ Later, when courts became aware of the legislative stalemate in 2011, they abruptly standardized cost awards while findings for claimants became nearly universal. In concrete terms, a streamlined and briefer process reduced lawyers’ efforts in the litigation, thereby justifying lower cost payments. Concurrently, brief procedures with sure chances of success allowed a burgeoning litigation industry to continue, even with lower cost determinations because of economies of scale. In the following years, the Santiago Appellate Court’s plenary sessions confirmed some of the criteria in standardizing costs.Footnote ²⁸

Finally, the commodification of claims consolidated and disseminated over time. The number of dissenting votes in the Santiago Appellate Court, for instance, declined after 2012, stabilizing at less than 20 percent when the insured won, mirroring lower court decisions (see Figure 3). Moreover, this dynamic of commodification extended to other Chilean appellate courts. In Concepción, for example, there was a lower likelihood of plaintiffs’ success between 2011 and 2014, albeit there were court orders incorporating higher fees.Footnote ²⁹ In any event, both the Concepción and the Valparaiso Appellate Courts gradually began to issue more decisions favoring claimants after 2009, reflecting patterns similar to those of the Santiago Appellate Court in 2014.

Judicial rationalization and path-dependent equilibrium

By 2015, Chilean judges admitted that they were reviewing a critical aspect of the health system without a solution promulgated in the political arena. In a March 2015 speech that opened the Supreme Court’s new term, Chief Justice Sergio Muñoz specifically recognized this challenge: “Until today, no regulation … has dealt with the adjustability of health plans with specific delimitations, for which the courts [have] resolve[d] the conflict.”Footnote ³⁰ Regarding court decisions on the annual premium increases, he stated that “courts only reproach the lack of background information provided by the ISAPRES to the insurance-holders as well as to the courts, since they argued that there is a higher cost for health plans, but this is not proven.”Footnote ³¹ The following Supreme Court chief justices continued to appeal for a political solution in every subsequent inaugural speech. In the same direction, one of the interviewed justices asserted about the political unresponsiveness and the systematic judicial practice: “If we didn’t address it, who?” Other sectors of the legal system also called for action. For example, in 2016, the president of the Chilean Bar Association, Arturo Alessandri Cohn, explained that the judicialization of this subject “emerges due to a lack of [a] state solution, which should be a matter addressed by both the executive branch and Congress.”Footnote ³² By then, the standardized mass rulings had produced a delicate balance whose stability was permanently at stake: Courts addressed the issue, emerging law firms profited and provided cheap, fast access to justice for middle-class claimants, ISAPRES kept a lucrative business alive, and politics did not need to tackle a controversial matter.

The emergence of a small industry of ISAPRES-related litigation constituted the most immediate consequence of court behavior. In a highly segmented profession, that activity initially attracted generalist middle-class lawyers who served as the backbone of the legal profession (Villalonga Reference Villalonga, Abel, Hammerslev, Sommerlad and Schultz2019, 421). However, some specialized law firms emerged, which over time took advantage of routine work and economies of scale. By 2015, twenty law firms were involved in about 40 percent of these types of actions.Footnote ³³ The business turned out to be highly lucrative for the firms that captured the largest share of these cases. One person recalls the office of twenty-seven employees he managed to build from this business: “In our glory days, we had a monthly dinner at the Four Points hotel…. Everyone had smartphones at home, computers with dual monitors. Whatever they needed, they had it.”Footnote ³⁴

This novel litigation support infrastructure directly resulted from commodification, and these specialized firms became what Mark Galanter (Reference Galanter1974) called repeat players. They sought clients aggressively via billboards and online platforms, employing such colorful slogans as “S.O.S ISAPRES” and “Stop the increase,” among others. Furthermore, they actively worked to finish the process and apply court decisions to collect the attorneys’ fees award as their only compensation, constituting a de facto private enforcement regime for judicially selected policy outcomes. In so doing, they reached almost everyone interested in filing a claim, thus ensuring compliance. These firms’ specialization has also allowed them to gradually handle other ISAPRES-related matters, further fueling litigiousness.

Given this uptick in litigation, court dockets began to grow, driven by recursos de protección submissions connected to ISAPRES annual price increases. Figure 5 shows the total number of recursos de protección filed before national-level appellate courts between 2004 and 2018, which comprised virtually 90 percent of actions under review. The first wave of growth appeared in 2007, when decisions against the ISAPRES began to pair with court-ordered attorneys’ fees awards. Thus, the data shows a gradual shift in the number of writs until about 2011. Beginning in 2012, when the actions were commodified, the data shows a new wave of litigiousness characterized by annual exponential growth. Variations are associated with ISAPRES strategies to increase the cost of premiums in specific years. However, those fluctuations have not altered the pure scale of litigiousness.

Figure 5.

Recursos de protección against the ISAPRES in appellate courts at a national level

The ISAPRES were able to navigate this new scenario until 2019, retaining the essential features of their core business. In part, their success related to a relatively low level of litigiousness, insofar as plaintiffs in those actions represented only a tiny fraction of ISAPRES portfolios. By 2015, almost 83 percent of ISAPRES insured members saw an increase in the cost of their plans (SIS 2014), but only a few (3.9 percent) filed recursos de protección against such corporations. Their success, however, was not absolute. The ISAPRES deployed different tactics to reduce the financial impact of attorneys’ fees awards, such as qualifying them for tax deductions, although the insurers failed in their attempts.Footnote ³⁵ In any event, the large numbers of writs and routine decisions cloak relatively low levels of litigiousness in terms of the ISAPRES overall business, which has allowed the ISAPRES to experience business continuity.

In a self-reinforcing dynamic, standardized rulings have diverted the issue away from the political arena. Clients who had a greater interest in eschewing annual increases did not resort to social or political mobilization because they only needed to file a claim with little cost to them. They could even avoid the personal stress of ordinary litigation through an almost automatic procedure. Like other areas of social policy, the area of public health has seen a plethora of controversial issues in the past decade, such as life-saving treatments, but unlike those other areas, there have been no associated political movements channeling resistance against ISAPRES into a kind of social protest (Perricone Reference Perricone2020, 83–84). That passivity reinforced the political status quo, as an absence of mobilization does not alter the legislative transaction costs of moving the wheels of Congress.

Concluding remarks

Different stimuli outside the judicial arena broke the delicate equilibrium described here. In October 2019, violent turmoil and social mobilization exploded, demanding an in-depth revision of the pro-market socioeconomic model developed by the country during the past thirty years. Those demands were driven not only by lower-socioeconomic-status groups but also by middle-income earners who manifested their grievance on indebtedness and uncertainty, targeting all spheres of social welfare and health-care delivery in particular (Castiglioni Reference Castiglioni, Peña and Silva2022). Two failed constitution-making processes followed turmoil. The first of them—dominated by the far-left sectors between 2021 and 2022—proposed restructuring health-care delivery toward state provision, relegating private providers to an auxiliary function and thereby ending the dual structure of health-care delivery established in the 1980s.Footnote ³⁶ Meanwhile, the COVID-19 pandemic hit the entire health system’s capacity and caused profound economic strain. In this context, lawmakers temporarily froze ISAPRES premiums and established a permanent mechanism to administratively set the maximum increase that the ISAPRES could apply to their members’ plans, which is ultimately in the Superintendent of Health’s hands.Footnote ³⁷

During 2022 and 2023, the first recursos de protección lodged against ISAPRES under this new modality faced judicial scrutiny. In so doing, the Chilean high courts point to their deference to lawmakers, thereby decreasing the amount of litigation.Footnote ³⁸ Meanwhile, like a snowball, other judicial battlefields have emerged regarding private health-care delivery, such as gender and age variables and the values of guaranteed benefits (GES) in ISAPRES plans. For the first time, the Chilean Supreme Court issued rulings with general effects related to the latter, thus exposing itself to criticism from both politicians and academics.Footnote ³⁹ The judicial decisions mandated ISAPRES to pay back significant amounts of unduly paid payments to affiliates. Lawmakers reached an operative transitory agreement regarding the mechanism for those payments and to set the base-price annual increases.Footnote ⁴⁰ In all these decisions, Chilean courts are again sensitive to the political environment.Footnote ⁴¹

Although the model of standardized judicial policymaking described here likely has reached an end, the evidence analyzed here provides valuable insights. The article significantly contributes to the literature on judicial policymaking from the perspective of interbranch relations and their influence on socioeconomic rights in Latin America. The issue under investigation demonstrates that when there is a widely shared belief that a particular public policy is suboptimal, and legislative bills remain mired in congressional deadlock, judges may discern an opportunity to exercise discretion in shaping policy (Villalonga Reference Villalonga2024a). Likewise, the study presents a novel form of judicial intervention that deviates from well-documented structural judgments or the incremental development of legal precedents in social rights mobilization (e.g., Rodriguez-Garavito and Rodríguez-Franco Reference Rodríguez-Garavito and Rodríguez-Franco2015; Sigal et al. Reference Sigal, Rossi, Morales, Langford, Garavito and Rossi2017). By standardizing rulings on individual injunction cases and stimulating litigation by fee shifting, this model of judicial intervention addresses several pivotal aspects intrinsic to the judiciary’s crafting of public policy. Specifically, it incorporates judicial preferences, establishes infrastructure to support litigation for enforcement purposes, encourages the broader accessibility of legal channels, and provides incentives for mechanisms that ensure compliance.

The study’s findings are particularly pertinent in the Latin American context, as the region has been rife with fragmentation and polarization (Moraes and Béjar Reference Moraes and Béjar2022), thus creating conditions favorable to legislative stalemates since the early 2000s, when there was a regional trend to reformulate social policies. Furthermore, an expansive and ambitious vision of social rights, often associated with states and characterized by low institutional capacity and limited resources, has only worsened the perception that the political process has been inadequate (Brinks et al. Reference Brinks, Levitsky, Murillo, Brinks, Levitsky and María2020, 17–19). According to the evidence examined here, these variables not only create the conditions for legislative gridlock but also facilitate judicial discretion. Although it is plausible that this case study is an anomaly tied to a specific legal system and political context, it nonetheless serves as a paradigmatic illustration of how judges can exert influence over social policies by means of ruling on individual injunctions.