Fighting Workers` Compensation Fraud

Transcription

LitigationManagement
Magazine
summer 2012
Honoring
Excellence
Litigation Management
Professionals of the Year
p. 36
From Voir Dire to
“Voir Google”
Using Social Media in Jury Selection
and Jury Monitoring
p. 42
Pay Day
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p. 52
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52
48
Getting to Yes
The Do’s and Don’ts of Mediation
52
Pay Day
Get Your Legal Bill Approved and
Paid Quickly
42
36
Honoring Excellence
Litigation Management Professionals of the Year
42
From Voir Dire to “Voir Google”
Using Social Media in Jury Selection and Jury Monitoring
contents |
summer 2012
DEPARTMENTS
THE ALTERNATIVE
Budgeting for alternative fee arrangements 58
Embracing planned early dispute resolutions 60
FROM THE TOP
What litigation management needs to strengthen its future
Nurturing the leader within
10
14
OUNCE OF PREVENTION
Ethical investigation of claims
62
Specifically Speaking
The use of judicial estoppel in a bankruptcy setting
Using settlement technology to resolve cases
Fighting workers’ compensation fraud
Investigating foodborne illness claims
Handling building products class action suits
Using federal or state laws to obtain pre-filing evidence
Total quality management tools in incident investigation
The impact of cultural competency on bottom line success
Helpful hints for reviewing medical records
16
18
20
22
24
26
30
32
34
Cindy Khin
Chief Claims Officer,
Medmarc Insurance Group
66
in every issue
RISK MANAGEMENT
Protecting yourself from reputational risks
Who Knew?
George Woolverton
Managing Partner, Stockwell, Harris,
Widom & Woolverton & Muehl
65
56
Publisher’s Letter
5
Events8
summer 2012 | LitigationManagement | 3
Claims Management
Claims Management
with a
TwisT
TwisT
with a
NARS doesn’t provide cookie cutter claims management services. Our services stand out from the
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NARS
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dent they understand your claims and will manage them to the best outcome possible.
specialize in specific industries. They don’t dabble from specialty to specialty, so you can be confident
they understand
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We provide
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— the kind
where
you
get you
to know
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business
partner
and
every
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But
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more
than
some
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a
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Let one of our exceptional staff members demonstrate
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Contact Jamie Bernardo at 321-441-1336
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Claims Management. Redefined.
Claims Management. Redefined.
| Executive Director’s Letter |
LitigationManagement
Summer 2012
Vol. 2, Issue 3
Size Matters
For those of you who attended the CLM
Annual Conference in San Diego, Ronnie
Rosenberg’s statement that size matters
stands out as a highlight. Ronnie was talking
about defense counsel selection, however
based on the conference evaluations, she
is right — size does matter. That’s why the
CLM is committed to keeping our annual
conference at the same size it was this year.
While the CLM continues to grow, we are
careful to not turn our Annual Conference
into an enormous convention. We had 1,300
attendees this year, and the Annual Conference will remain at that size so we
maintain the educational and networking integrity of the event.
The 2013 Annual Conference will be held April 10 – 12 in San Antonio.
We will start accepting presentation proposals in July so now is a good time
to start thinking of any topics you’d like to propose. Registration will open
December 1.
If you did not attend the Annual Conference, there are many other CLM
educational and networking opportunities throughout the year. We’re
holding several topicspecific mini-conferences
We had 1,300
this summer in conjunction
with our local events. Visit
attendees this year, and
the CLM website or see the
the Annual Conference will calendar on page 8 for
more details.
remain at that size so we
maintain the educational
and networking integrity of
the event.
On our website, you’ll
also find details about
our webinars, which are
generously sponsored by
TyMetrix and completely
free to attend. Upcoming webinar topics include preventing insurance bad
faith, defending construction site accident claims, the future of environmental
litigation and preparing truck drivers for depositions.
If you have a subject you’d like to see featured in an educational program or
magazine article, please feel free to contact me or any of the CLM staff.
Adam Potter
Executive Director
Claims and Litigation Management Alliance
adam.potter@TheCLM.org
Publisher
Harry Rosenthal
Associate Publisher
Bryan Pifer
Managing Editor
Susan Wisbey-Smith
Art Director
Jason T. Williams
Advertising
Direct all advertising inquiries
to Harry Rosenthal at
harry.rosenthal@theclm.org
513-608-4221.
Editorial
Direct all editorial inquiries
to Susan Wisbey-Smith at
susan.wisbey-smith@theclm.org
or 847-317-9103.
Reprints
Direct all reprint requests
to Susan Wisbey-Smith at
susan.wisbey-smith@theclm.org
or 847-317-9103.
LitigationManagement is published
quarterly and covers news and topics
of interest to litigation management
professionals and the attorneys with
whom they work.
Copyright © 2012 by the Claims and
Litigation Management Alliance. All rights
reserved. No part of this publication may
be reproduced or transmitted in any form
or by any means, electronic, mechanical,
photocopying, recording or otherwise, without
prior written permission of the Claims and
Litigation Management Alliance.
The views expressed in the articles are solely
those of the authors and do not necessarily
reflect the view or opinions of the Claims
and Litigation Management Alliance or
the companies by whom the authors are
employed.
| Authors and Contributors|
Thank you to the many outstanding professionals who have authored and contributed
to articles in this issue of Litigation Management.
Ernest Aliseda, CLMP
Managing Attorney, Fred Loya Insurance
Abbie Eliasberg Fuchs
Attorney, Harris Beach
Larry Beemer, CLMP
Claim Director, Fireman’s Fund
Insurance Company
Alex Goodrich
Vice President, Risk Management
Services, ADR Systems
Jeff Brinker
Partner, Brinker & Doyen, L.L.P.
John M. Guidos
Attorney, Dowd & Dowd, Ltd
Preston McGowan
Vice President, Litigation Management, Chubb
Brian Brown
Senior Litigation Attorney, Missouri
Employers Mutual Insurance Company
Angela Henderson
Claims Supervisor, BerkleyNet
Underwriters
William A. Nebeker, Esq.
Managing Partner, Phoenix Office,
Koeller, Nebeker, Carlson & Haluck, LLP
John Browning
Partner, Lewis Brisbois Bisgaard & Smith
Margie Hickey
Account Manager and Senior Claims
Specialist, CCMSI
Nancy Noetzel
Claims Litigation Professional
Louis Cairo
Senior Partner, Goldberg Weisman Cairo
Ken Carter
Corporate Casualty Claims Manager,
Merchants Insurance Group
Pamela Carter
Founder, Carter Law Group
Mike Caspino
Founding Partner, Brady, Vorwerck,
Ryder & Caspino
Debbie S. Champion
Partner, Rynearson Suess Schnurbusch
& Champion LLC
Richard J. Cohen
Managing Partner, Goldberg Segalla LLP
Kandy Davenport, ARM,
RF, WCLS
Manager of Firmwide Insurance, KPMG LLP
Andrew Hirsch, D.O
President of Horizon Medical Group
Patricia Kagerer
Vice President of Risk and Safety
Management, CF Jordan Construction
Tom Kammerer
Attorney, Rynearson, Suess,
Schnurbusch, & Champion LLC
Hon. Daniel J. Kelley (Ret.)
Mediator and Arbitrator
Cindy Khin
Chief Claims Officer, Medmarc
Insurance Group
Carol Kreiling
Vice President, Swiss Re
Paul D. Larimore
Program Director, Stuart Maue
Patrick C. Dowd
Attorney, Dowd & Dowd, Ltd
Rich Lenkov
Attorney, Bryce Downey & Lenkov
Karen Dunning
Senior Director of Legal Operations,
Motorola Solutions Inc.
James A. Loeffler, CPA, CFE
President, LegalEye Inc.
Amel Esposito
President & CEO, Coronado Claims
Services
Steve Fields
Partner, Brinker & Doyen, L.L.P.
LoriAnn Lowery-Biggers
President, Field Operations, Navigators
Management Company, Inc.
Bob Lund
Vice President of Risk Management,
Swift Transportation
Deborah Masucci
Vice President, Office of Dispute
Resolution, Chartis
John McGann, CLMP
Partner, Wilson Elser
Sarah Perry
Risk Manager, City of Columbia, Mo.
John Peterson
Loss Prevention Area Manager, Western
Region, HMSHost
George Power
Partner, Dell, Moser, Lane, & Loughney, LLC
Stacey Shannon
Branch Manager, Gallagher Bassett
Services, Inc.
Matthew J. Smith, Esq.
Founder and President, Smith, Rolfes &
Skavdahl Company, L.P.A.
Adam Springel, CLMP
Founding Partner, Springel and Fink
Christian Stegmaier
Attorney, Collins & Lacy, PC
Barbara Sutherland
Senior Vice President, General Counsel
& Chief Claims Officer, Argo Group US
George Woolverton
Managing Partner, Stockwell, Harris,
Widom & Woolverton & Muehl
Frank T. Zeigon
Commercial Property Claim Manager,
CNA Financial Corporation
If you’d like to contribute to a future issue of Litigation Management,
email Susan Wisbey-Smith at susan.wisbey-smith@theclm.org.
6 | LitigationManagement | summer 2012
Our strength
is your best defense.
Wilson Elser is one of the United States’
largest insurance law firms, with more than
800 attorneys in 23 offices nationwide.
Our insurance attorneys are among the most
experienced in the country, if not the world.
We are proud of our ability to meet our clients’
individual insurance defense needs by applying
the disciplines and high standards demanded
of litigation to all legal matters.
At Wilson Elser, litigation management is not
just a catchphrase. Our attorneys understand
the concepts, practices and intent of effective
litigation management. Staffed with dedicated
professionals, our Litigation Management Group
provides experienced training and oversight
of our litigation practices. We take great pride
in meeting and exceeding our clients’ service
expectations.
Albany • Baltimore • Boston • Chicago • Connecticut • Dallas • Denver • Garden City • Houston • Las Vegas • London • Los Angeles • Louisville
McLean • Miami • New Jersey • New York • Orlando • Philadelphia • San Diego • San Francisco • Washington, DC • West Palm Beach • White Plains
Affiliates: Berlin • Cologne • Frankfurt • Munich • Paris
wilsonelser.com
© 2012 Wilson Elser. All rights reserved. 228-12
228-12_CLM-Ad_JM-Ak-mm1.indd 1
4/3/12 10:53 AM
the brief
Go Digital!
Litigation Management is also available in a digital version on your iPad, iPhone, Android device or Kindle Fire.
Simply visit the app store or Kindle Newsstand and search
for “Litigation Management.” You can download the digital
edition for FREE.
In addition to the same great content, the digital edition
allows you to click on any web links or email addresses.
The app you view on your phone turns
the articles into easy-to-read text so
it’s easy to read an article anywhere,
any time.
You’ll also be automatically notified
every time a new issue is published,
so you’ll never miss and issue.
Events
June 6
Birmingham, Ala.
Local Event
Barber Motorsports Museum
June 21
Sept. 13
July 12
Sept. 14
July 13
Sept. 20
Omaha
Local Event
College World Series
Chicago
Local Event
CNA/River Cruise
Chicago
Professional Liability
Mini-Conference
W. Chicago Lakeshore
June 7
Columbus, Ohio
Local Event
Clippers Game
July 18
June 8
Columbus, Ohio
Workers’ Compensation
Mini-Conference
Renaissance Columbus Downtown
Denver
Local Event
Colorado History Museum
July 19
Seattle
Local Event
Columbia Tower Club
June 14
Dallas
Local Event
Ranger Stadium
Sept. 12
June 15
Dallas
Transportation Mini-Conference
Renaissance Dallas Hotel
Hartford
Lady Katheryn Boat Cruise
Boston
Local Event
Science Museum
Boston
Bad Faith Mini-Conference
Boston Marriott Cambridge
Philadelphia
Local Event
National Constitution Center
Sept. 21
Philadelphia
ADR/AFA Mini-Conference
TBD
Oct. 4
New York
Women’s Leadership Forum
New World Stages
Oct. 5 – 7
New York
Litigation Management Institute
Columbia Law School
For more information or to register, visit theclm.org/events.
It is not a matter of if, but when.
Armed. Alert. Commercial legal services
that swiftly end the thought of a claim.
On sight. No matter how big or small.
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From the Top |
Advisory Board
Missing Pieces
What Litigation Management Needs to Strengthen Its Future
D
ata and analytics are
hot topics in the litigation management
industry, and rightly
so. Properly captured,
analyzed and used, data can be a powerful tool. How to capture that data, what
data to capture and how to use it are the
million dollar questions. While each
company and firm has its own specific
data and needs, can the industry establish standard data points so that performance can be evaluated and trends can
be identified across the industry?
“One of the topics that was frequently discussed at the CLM Annual
Conference was performance measurement,” says Preston McGowan, Vice
President, Litigation Management,
Chubb, and a member of the CLM
Advisory Board. “There was a great deal
of interest among the conference participants regarding the key metrics that
legal service providers and purchasers
should use to manage their operations”
McGowan says it’s important for
him to use data so he can under-
stand where things are working
well today and where things need
improvement. He also uses data to
understand trends in claims so he
can work to secure outside legal
expertise to fit the current and projected book of claims his company
manages. “Helping Chubb and our
insureds match the right legal service to the right claim is a core service that the Litigation Management
Unit delivers. Our use of financial,
operational and quality metrics is
essential to making the best strategic
we rely upon an internally developed
scorecard card to evaluate the performance of our defense counsel. We
use the data that is extracted from
our group claims data warehouse
to populate the scorecard in order
to provide us with guidance as to
which attorneys to assign to cases, or
in some circumstances, which attorneys we should withdraw cases from.
Some of the most significant analytics
that appear in the scorecard are the
length of the litigation life cycle, outcome and the cost of such outcome.
In other words, it’s nothing more than
our wanting to know what type of
outcome at what cost, how long did
it take for it to happen and who was
responsible for making it happen,
which in and of itself, can be a critical
success factor for an insurer that hires
the attorney, rather than the firm.
and daily sourcing decisions regarding counsel retentions.”
McGowan relies heavily on this data to
communicate the progress of specific
litigation management operations to
both internal claim managers and
key outside law firms. “Facilitating
discussions from a credible fact base
helps to drive deeper conversations
regarding important but inconsistently measured success criteria such
as ease of doing business, firm capacity and case outcome,” he says.
Barbara Sutherland, Senior Vice
President, General Counsel & Chief
Claims Officer of Argo Group US,
and a member of the CLM Advisory
Board, is also working toward accomplishing a similar goal. “Right now
“I expect every attorney who works
with us to consistently perform at a
high level and to be proactive in their
approach to our strategic business
objective of obtaining the best possible outcome for a policyholder at a
reasonable cost. While it would not be
realistic for us to try to capture data on
all aspects or nuances of every litigated
claim, the data that we do have access
to has been a meaningful differentiator
for our claims operations in an industry where there is a only a paucity of
credible claims litigation data available. As a result of having the ability to
react to the data that is available to us
internally for almost three years now,
we’ve experienced reductions in claim
cycle time, defense costs and indemnity costs,” she adds.
From the Outside
From the perspective of outside
counsel, knowing what performance
measures clients are using is critically important to long-term success.
However, it’s not easy given that each
client is going to measure law firm
and attorney performance using a
different set of criteria.
“One of the challenges for outside
counsel is to know how their clients
Metrics Course
The 2012 Litigation Management
Institute features a new course
on metrics. Taught by Preston
McGowan, Vice President, Litigation
Management, Chubb, and Helen
Gillcrest, Vice President and
Manager of Enterprise Legal Services
for the Liberty Mutual Group, the
course will address issues related
to capturing and analyzing data to
evaluate and improve performance.
The Litigation Management Institute
is the first certification program
specifically designed to provide
participants with a comprehensive
understanding of the business of
litigation management. The Institute
will be held from Oct. 5 to 7 in New
York. Registration opens on June 1
on the CLM website.
are measuring them, and it’s probably going to be somewhat different
for each client,” says John McGann, a
partner with Wilson Elser Moskowitz
Edelman & Dicker, former Chief
Claims Counsel for OneBeacon
Insurance, and a member of the CLM
Advisory Board. “Some clients are
more proactive in sharing metrics
with law firms. In those instances
you obviously get a first hand look at
what’s important to the client.”
However, even if the client is not
sharing or collecting, this information, McGann suggests outside
counsel establish performance measures that allow them to evaluate
their own efficiency. “If you focus on
measuring the efficiency and effectiveness of your firm, everything else
will fall into place. No matter what
data clients are collecting and analyzing, the bottom line is that they
want you to achieve a good result
in the shortest time possible for the
least possible cost. By identifying
how your firm can accomplish those
goals consistently, you’ll be able to
perform at a level where more and
more clients will want to retain your
services,” he says.
He suggests firms keep their own
report cards on their performance.
“Look at your compliance with clients’ litigation management guidelines, evaluate the timeliness and
quality of the reports you provide,
measure your cycle time, and of
course measure the total cost to the
client expense and lost cost. It’s not all
that different from what many of your
clients are doing, but firms need to do
it internally so they can better evaluate their own performance.”
Establishing Performance
Criteria
The lack of industry-wide performance measurements is one impediment to creating benchmark data
or a streamlined evaluation system.
“While I’m not a supporter of creating generic performance metrics, I
recognize that purchasers of legal services look at many of the same high
level measurements,” says McGowan.
“Many of us are analyzing average
cost per case, case cycle times, effective billing rates and other longstanding financial and operational
measurements. However, each company collects, interprets and values
these measurements differently based
on its underlying systems, business
models and data management practices. This reality, along with the proprietary nature in which organizations manage performance targets,
will hinder the availability and credibility of industry standard metrics
and targets. I definitely support the
practice of each legal service buyer
creating clear performance measures
based on their business needs and
using these measures to manage the
relationships with law firms.”
Perhaps there are opportunities to
collect data from independent sources. McGann suggests the National
Association for Court Management,
a network of state court administrators, as a potential data source. “They
track court statistics such as the
length of time a case is open, and all
the cases are coded by type at inception, so there might be potential there
to have benchmark data that tells us,
for example, a construction defect
case in Los Angeles has an average
cycle time of 12 months,” he notes.
“A source like that won’t give us every
data point we want, but it could be a
start to establishing some industrywide benchmark data.”
Sutherland suggests that the ISO,
Insurance Services Office, might also
be an option for providing essential
litigation management data on an
industry wide basis. “The ISO currently collects a lot of insurance
claims, financial and underwriting
Firms need to
keep their own
performance report
cards so they can
better evaluate
their performance.
data, but they have not been particularly effective regarding providing the kind of line of business
litigation management data that
insurance claims operations need
in order to establish the appropriate
benchmarks and compare their individual performance and outcomes
to them,” she comments. “I’d love to
see ISO or another statistical reporting organization begin to do more of
what the NCCI has done in the area
of workers’ compensation by using
the data that they collect to perform
a customized comprehensive analysis of medical and indemnity outcomes, cost drivers and trends on a
jurisdictional basis.
“Today, while there is the ability for
a workers’ compensation insurer to
have access to data that tells them the
cost of a back surgery in Pittsburgh,
Lancaster and Philadelphia, we still
do not have access to current, credible
data that tells us the average cost or
time to litigate a premises liability or
product liability claim in Pittsburgh,
Lancaster and Philadelphia. I think
that litigation management analytics
present a tremendous opportunity
for a statistical reporting organization to expand its value proposition
within the property casualty insurance industry.”
The Analysis
Even after all that data is collected,
how it’s used and analyzed is very
important. “Ten years ago, data analytics wasn’t a key part of a litigation management professional’s job.
Today, it is a crucial element. This
presents career opportunities for professionals who either have a strong
quantitative skill set or are willing to
expand their knowledge in this area,”
says McGowan. “In my organization,
I look for people who are very comfortable with the quantitative side of
our business. One of the key competencies we look for in making hiring
decisions is a person’s comfort and
skill in analyzing data and using it to
make better business decisions.”
“In the past, claims departments
and organizations were not home
to many innovators. Now, it’s the
price of admission into the field,”
says Sutherland. “The most successful professionals are those who can
leverage their data to innovate and
improve processes.”
The CLM is in the process of creating an Analytics Committee that
will explore many of these issues
and help develop resources for all
CLM Members and Fellows. “While
we can’t create one standard database, we can help determine what
data is useful and share knowledge about how best to capture and
analyze that data,” says McGann.
“With that guidance from a group
of industry leaders, each individual
company or law firm can then create their own system of data collection and analysis.” LM
Congratulations
from the partners at
Brady, Vorwerck, Ryder
& Caspino to the winners
of the CLM’s Litigation
Management Professional
of the Year Award
Ken Carter
Corporate Casualty
Claims Manager, Merchants
Insurance Group
Karen Dunning
Senior Director of Legal
Operations, Motorola Solutions Inc.
Michael Caspino
Founding Partner of Brady,
Vorwerck, Ryder & Caspino
From the Top |
National Committee
Raise the Bar
Nurturing the Leader Within
By LoriAnn Lowery-Biggers and Richard J. Cohen
A
s members of the
CLM, each and every
one of us plays an
important role in
shaping the claims
and litigation management industries. We are all part of a team
that is leading the advancement
of these disciplines and furthering
the highest standards within them.
The success of that mission is
fueled by the leadership and influ-
ence of each team member within
their own organizations.
Being a leader means elevating
those around you, but it all starts
from within. No matter where you
are in your career, taking an honest self-assessment and making a
focused effort to improve will go
a long way toward increasing your
effectiveness and efficiency as a
leader.
Personal Assessment
First, take the time to sit down
and perform a 360-degree selfevaluation to assess your strengths
and weaknesses. Be honest and
detailed. Ask a few colleagues you
know and trust to provide you with
objective evaluations based on
their experience working with you.
Compare your own self-assessment
with the feedback you received
from others.
ers for success. Try doing this for every
applicable area of your life — professional, personal, emotional, spiritual,
etc. — because taking charge of all
these facets can improve your overall
strength as a leader.
worst enemies. Don’t let your past
dictate your future — being a leader
means learning from your prior challenges or missteps without carrying
them forward with you.
To help guide you on this path, create a
personal mission statement. This is not
a statement about what you’ve already
done, but rather what you currently do
and what you plan to accomplish. Write
down a mission statement of three to
five sentences, or even a brief elevator
speech of two minutes or less. Refer
to this often as you work toward your
goals, and refine it as you go — so you
always have your own definitive statement about what you do and where you
want to go.
Look back at the strengths you identified in your self-evaluation and determine where you bring exceptional
value. Don’t let others see you as a
commodity — differentiate yourself
from the pack by showing something
above and beyond the norm. This is
critical to proving your worth to those
around you and establishing your personal brand as a unique, valuable and
indispensable resource to your organization. Remember that perception is
reality, and you are much more in control of the perceptions others have of
you than you realize. Everything you
do, from how you present yourself to
your actions, will create the image of
you that others see and will affect the
personal brand you’ve established.
Build a Network
Don’t wait until you need a network
to create one. As you work your way
toward the goals you outlined, you’ll
benefit from having your own personal advisory board that you can rely
upon for honest feedback or practical
advice. Reach out at every opportunity to bring people you value into your
network, and help others when you
can — you never know when you’ll
need their assistance down the road.
In addition to evaluating your specific
strengths and weaknesses, assess your
“Leadership Quotient” — that is, how
you rate on the important factors of
integrity, inspiration, initiative, innovation, intelligence, influence and
impact. Rate yourself on a scale of
one to ten for each, then add them up
for an overall score and get to work
on improving the weaker aspects. Ask
yourself: How do I inspire with integrity, initiate innovation, and impact
and influence those around me?
Define Your Destination
Have a plan or plan to fail. Wandering
may get you lost, so map out a path.
Identify what your leadership goals
are, consider the route you’ll need to
take to reach them, and define mark-
No matter how gifted or talented you
are, personal constraints can impede
you in any aspect of life. Identify
possible constraints resulting from
your own behavior, because these are
things you can change. For example,
are you overconfident or do you lack
self-esteem? Do you have difficulty
coping with change? Do you have
low drive for certain goals, or are you
overly aggressive for others? Arrange
the specific constraints into a hierarchy and, again, seek objective feedback
from a colleague. Use this assessment
to determine what you need to change.
While taking a cold, hard look at
where you can improve is essential,
be sure not to let doubt about your
abilities or a lack of confidence take
root. Too often, leaders with exceptional potential become their own
Create Your Brand
While constantly striving to improve
yourself is an essential quality of a leader,
it is also important to keep in mind that,
realistically, you just cannot do everything. Remember you are an exhaustive
resource, so push yourself but be honest
about what you can handle. You may
have to decline some tasks or opportunities to avoid depleting yourself physically, mentally and emotionally. But by
sticking to your limits, you can stay at
the top of your game and avoid spreading yourself too thin.
Success in leadership means something different to everyone. But no
matter how you define it, taking a
thoughtful, focused approach to
becoming your best will make you a
stronger leader — and continue raising the bar for professional excellence
in the greater insurance and risk
management community. LM
LoriAnn Lowery-Biggers is President of Field
Operations at the Navigators Management
Company, Inc. Richard J. Cohen is Chair of
the CLM National Committee and Managing
Partner of Goldberg Segalla LLP.
Specifically Speaking | Transportation
Credit Check
The Use of Judicial Estoppel in a Bankruptcy Setting
By Patrick C. Dowd, John M. Guidos and Bob Lund
W
do not possess a pending personal
injury claim. The failure to disclose a
personal injury claim in a bankruptcy petition may pave the way for the
defendant to assert that the plaintiff
is judicially estopped from receiving
any recovery.
Bankruptcy filings increased 14 percent between 2009 and 2010. One
may assume that within the 1,596,355
new bankruptcy petitions lies more
than a few individuals who attempt
to conceal, misrepresent or outright
lie to the bankruptcy court that they
Judicial estoppel is used to prevent a
party from maintaining inconsistent
positions in different legal proceedings. Debtors in bankruptcy owe an
affirmative duty to disclose claims in
the bankruptcy. A debtor in bankruptcy who receives a discharge by representing that he/she has no cause of
action cannot turn around and recover on a supposedly nonexistent claim.
In general, judicial estoppel includes
five separate elements:
hen confronted
with a personal
injury
lawsuit, immediately investigate whether the plaintiff has filed
for bankruptcy protection. Given the
current economic climate and historic
unemployment rates, individuals are
taking drastic measures to save their
homes and other assets from foreclosure, repossession, etc.
1 The two positions must be taken
by the same party;
2 must be taken in judicial proceedings;
3 are under oath;
4 the party must have successfully
maintained the first position, and
received some benefit thereby; and
5 the two positions must be ‘totally
inconsistent.’
In essence, a debtor is asserting two
inconsistent positions when he/she
fails to disclose a personal injury claim
in a bankruptcy proceeding and subsequently files a lawsuit alleging damages
related to said claim. Debtors who fail
to disclose the claim during the bankruptcy proceeding discover that courts
have held that the concealment prevents
a debtor from realizing on their undis-
closed claims and a debtor in bankruptcy is bound by her own representations,
no matter why they were made.
The filing of an amended bankruptcy
petition (after the debtor’s failure to
disclose is caught) identifying the
undisclosed claim does not prevent
the application of judicial estoppel.
However, resourceful plaintiffs’ attorneys will likely argue that the estoppel must be raised in bankruptcy
court, thereby complicating the procedural aspects of raising the issue.
Nevertheless, courts within many
jurisdictions have ruled that the state
court may entertain the argument of
judicial estoppel. An Illinois Appellate
Court recently upheld that a state
court maintains jurisdiction over
whether judicial estoppel applies to a
claim that was not disclosed in a bankruptcy proceeding. The same court
found that whether a debtor failed to
disclose the personal injury claim in
good faith or in bad faith is not relevant to the application of the doctrine
of judicial estoppel.
It is important to note that a debtor’s
personal injury claim becomes property of the bankruptcy estate upon the
filing of the petition. Notwithstanding
the fact that a debtor may be judicially
estopped from recovery, estoppel does
not prevent the bankruptcy trustee
from pursuing the undisclosed claim
for the benefit of the debtor’s creditors,
as the creditors are the victims of the
purported fraud.
However, courts have found that
where the trustee substituted as the
named plaintiff, the trustee’s recovery
is limited to the amount due to the
creditors, plus interest, and trustee’s
fees. Courts have also ruled that a
debtor may not receive any monetary benefit as a result of the claims
asserted on behalf of his/her bankruptcy estate when a plaintiff/debtor
intentionally concealed a discrimination claim during his/her bankruptcy
proceeding. The argument to posit
is that any amount that exceeds the
amount due to the creditors, plus
statutory interest, and trustee’s fees
would impermissibly revert to the
debtor who cannot personally benefit
under the doctrine of judicial estoppel, because the debtor failed to disclose the claim as an asset during the
bankruptcy proceeding and the cause
of action reverted to the trustee pursuant to the Bankruptcy Code.
As illustrated above, one is strongly urged to perform a background
check of the plaintiff to determine
whether a bankruptcy petition was
filed and if the claimant disclosed the
pending suit in the bankruptcy proceeding. Ultimately, the assertion of
judicial estoppal may help to bar or
limit recovery. At the very least, the
assertion provides significant leverage as a bargaining tool for settlement
and/or at mediation. LM
Patrick C. Dowd and John M. Guidos
are attorneys at the Chicago law office
of Dowd & Dowd, Ltd., which specializes
in transportation litigation. Bob Lund is
the Vice President of Risk Management at
Swift Transportation.
| construction
Technology
Timesaver
Using Settlement
Technology to Resolve
Cases
By Adam Springel and
Lawrence Beemer
W
hile the following
story
may read like a
colossal waste
of time and
money, those who have handled
multi-party construction defect cases
will quickly recognize this scenario as
an ordinary day at the office.
You are an attorney hired to represent the cabinet subcontractor in a
construction defect lawsuit involving
more than 40 parties. The primary
issues in the case involve significant
soils and structural issues that will
costs millions of dollars to repair,
along with a litany of miscellaneous
architectural issues involving leaking
windows and roofs, as well as defective
framing, concrete and stucco. Among
the architectural issues is a $10,000
claim for defective cabinets that arise
from your client’s/insured’s subcontracted work.
The developer’s counsel has been
ordered to issue demands to all of the
third parties. Your client has received
a demand for $22,500, which is inclusive of all attorney fees, expert fees and
other costs the developer claims are
recoverable under the subcontract.
While you do not have copies of the
other demands, the total claims in
the case exceed $5 million. Thus, the
claimed damages against your client
are less than one-half of one percent of
the overall case. You, and your adjuster who lives 500 miles away, have been
ordered by the Court to attend a mandatory mediation.
You arrive at the mediator’s facilities
and are told to wait in room 16. The
other 15 rooms are already full with
other parties. Boredom slowly creeps
in so you begin eating the cookies
left as your food for the day as you
will not be released for lunch. Your
adjuster, whose flight was delayed,
arrives and you discuss the merits of
the claim. You both continue to wait
for the mediator to see you and now
you are both eating cookies. Several
hours and a thousand calories later,
the mediator walks in, reiterates that
the demand to your client is $22,500,
and the mediator turns and leaves to
talk to other parties.
You and the adjuster move on to pretzels knowing the case will eventually
settle between $5,000 and $10,000,
but that nobody is prepared to take
your money today so you don’t make
a real offer in fear that you will set a
new floor for negotiations. Despite
this, you cannot leave the mediation
until you are excused for the day. Eight
billable hours later, counsel and the
adjuster have accomplished nothing,
both have attended the mediation at
significant expense and with great loss
of productivity back at their offices.
Oh, and let’s not forget, the case didn’t
settle so both the attorney and adjuster
will be back in three weeks for another
court-ordered mediation.
Three months later you’re sitting at
a seminar on complex litigation discussing how to improve the process.
Fifty minutes later you again learn the
system is broken, yet there’s no real
motivation or ability for change. You
scream and you pull out some hair.
How long can this cycle be repeated
and at what cost?
Assume counsel charges $185/hour
for the eight-hour mediation and the
overhead costs of the adjuster to the
company are $130/hour. Let’s further
assume that the adjuster spent 12
hours of company time traveling to
and attending the mediation. Travel
and other expenses were $500, and
your share of the mediator’s fee was
also $500. That’s $4,040 every time one
of these sessions is ordered, excluding
the value of lost productivity. Now
Technology currently
exists, and better
technology could
easily be created, to
use the Internet to
settle these disputes.
It’s time to e-settle our
cases — it’s
inexpensive, practical,
easy-to-use, and
nobody has to
leave their desk
to participate.
multiply that by the four or five sessions you will be ordered to attend
before you actually reach a settlement
and the mediation process alone can
cost about $20,000 per case just to
settle your $5,000 to $10,000 claim.
Anyone involved with handling construction defect cases has been crying
for change for years, yet the scenario
above has repeated itself day after day
for over three decades.
Stop the madness! It’s time for a
change. Technology currently exists,
and better technology could easily be
created, to use the Internet to settle
these disputes. It’s time to e-settle our
cases — it’s inexpensive, practical,
easy-to-use, and nobody has to leave
their desk to participate.
Imagine this scenario. Defense
counsel obtains language in a Case
Management Order that requires all
parties with demands under $50,000 to
proceed with a pilot program known
as online mediation. You receive your
$22,500 demand. You login to an “E”
mediation system and make your top
dollar offer, which is not seen by the
other party. Opposing counsel puts in
their bottom line demand, which is
also not visible to the opposing party.
If, however, the numbers meet or cross
paths, you are notified that your case
has settled for the mid-point between
the overlapping demand and offer
(e.g., the bottom line demand is $7,500
and the top dollar offer is $12,500 —
the system notifies you that your case
has settled for $10,000). The attorney
and adjuster have spent less than 15
minutes on this process and at a reasonable per party cost.
If a settlement isn’t reached, visual
signals can show if the two parties
are far apart or getting close, without
disclosing your most recent offer and
demand. By agreement, the system
could be programmed to make an “E”
mediator’s settlement proposal or to
notify the actual mediator, who now
has more time to focus on the larger
claims, to review the settlement status
and assist in finding online closure or
to allow brief arguments to be made as
to why each offer is proper based on
the facts of the case. The implementation ideas are endless, but what’s
obvious is that technology can assist
us in resolving our disputes in an efficient and cost-effective manner without leaving our desks. Too good to be
true? Not really as long as everyone
participates in good faith. LM
Adam Springel is the founding partner of Las
Vegas-based law firm Springel & Fink LLP.
Lawrence Beemer is a Claim Director for
Fireman’s Fund Insurance Company.
Specifically Speaking | workers’ compensation
Fighting Fraud
You Know It’s Happening, How Do You Control It?
By Kandy Davenport and George Power
W
orkers’ compensation fraud prevention begins
at the time the
employee
is
hired. Thorough reference and background checks for potential hires will
automatically reduce the chances of
future workers’ compensation fraud.
Employee orientation and safety training will limit the potential for accidents and catastrophic incidents in the
work place.
Ultimately, employers and insurers
possess the initial power to control
workers’ compensation insurance
fraud. Proactive and thorough claim
investigation is the best method to
insulate a company against fraud.
Within the first 24 hours of a reported
injury, employers and insurance carriers should initiate contact with the
injured employee and all witnesses
that may possess information concerning the claim. On-site investigations, recorded statements and written accident report forms are effective
tools to assist employers and insurers
in determining the compensability
claims and possible workers’ compensation fraud.
External data can be compiled after a
claim is reported to determine if possible fraudulent indicators exist. For
instance, searches for prior claims
and information in public records
can uncover key facts of suspicious
claims. Most insurance carriers possess the ability to search for prior
claims on industry-shared databases.
Investigating criminal and civil docket
records associated with the injured
worker may also reveal crucial information. Even vehicle records and
driving registration records can provide valuable facts to prevent workers’
compensation fraud.
Workers’ compensation fraud does not
always occur only at the beginning of a
claim. Create action plans and formulate updates on defense strategy with
legal counsel to ensure all red flag indicators are recognized throughout the
life of the claim. Efficient medical management with nurses, human resource
members and insurance claims representatives will not only reduce costs
on workers’ compensation claims, but
will also act to note potential fraud.
Frequent contact with the injured party
throughout the claims process decreases the chances of fraud.
Using Technology
Social media sites such as Facebook,
MySpace, Twitter and YouTube can
be good sources when investigating potential workers’ compensation
fraud. Often, people carelessly divulge
details about their activities of daily
living via their social media use. When
preparing for litigation, these websites
can be used to research employees.
Postings on social networks can reveal
involvement in sports, recreational
activities and even second jobs while
employees claim they are disabled.
This information is invaluable during
the first days after the alleged injury
while the investigation over compensability occurs. This information can
also be used in preparation of future
litigation. Admissions and statements
on these websites can also be used
during the course of the legal proceedings when trying to prove the ability of
employees to return to work.
This technology is extremely new in
the context of court proceedings so
most jurisdictions are still struggling to
develop appellate precedent setting case
law over the admissibility of such evidence. Nevertheless, trends across the
country demonstrate that most courts
have determined that there is no expectation of privacy on social internet sites.
As such, information obtained from
these forums is sometimes permitted
through the discovery process. When
deciding whether or not the evidence
is ultimately deemed admissible at trial
or in hearings, the courts will weigh the
relevancy to the specific issues in the
litigation versus the potential prejudicial value of such personal postings.
Surveillance companies and investigators will routinely offer services linked
to the retrieval and research of virtually all Internet sources of information. Employers and insurance carriers should consider hiring third party
investigators to acquire such information or personally peruse social media
postings sites to identify potential
workers’ compensation fraud. LM
Kandy Davenport, ARM, RF, WCLS, is the
Manager of Firmwide Insurance for KPMG
LLP. George A. Power is a partner of Dell,
Moser, Lane & Loughney, LLC, in the firm’s
Workers’ Compensation Litigation Group.
here’s to the
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What makes LeClairRyan different from other law firms? We’ve moved away from the traditional model of strictly organizing
a law firm around common legal practices. Our firm – with 21 offices and more than 350 attorneys, 250 of whom are
dedicated to litigation – is organized by industry across our many practices and geographies. This helps ensure that we
know our clients’ businesses so we can be more readily aligned to address their specific industry and legal needs.
InDUSTRIeS we SeRve
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| Product Liability
Tummy
Ache?
A Primer to Investigating
Foodborne Illness Claims
By Jeff Brinker, Steve Fields and
Stacey Shannon
N
ot feeling well? Does
your stomach ache?
Unable to keep
any food or liquids
down? It must have
been something you ate!
Many people want to blame the food
they eat as the source of their illness. In many cases they look to the
last meal they had. Consumers will
convince themselves the food they
ate from a certain restaurant or store
made them sick. When that happens,
investigating the claim early is critical
for the defense of a potential lawsuit.
Investigate
Begin by conducting an internal
investigation of your store or restaurant. The initial investigation is
often conducted by the claims professional or in-house counsel who then
uses the information to make a preliminary evaluation of liability and
determines whether outside counsel
should be retained.
Obtain any documents pertaining to
food safety checks that the establishment conducts on a daily basis. Make
sure to collect any food safety documents for at least 30 days before and
after the date the consumer claims
to have contracted the illness. If the
establishment is consistent with food
safety documentation, this paints a
picture that the store takes food safety
seriously, and prides itself on serving
a safe, quality product.
Find out how many of that particular
product was sold on that day. If 500
chicken wings were sold that day, and
only one person claims to have gotten salmonella, then it is less likely
the chicken at the store or restaurant
is the source.
Collect any invoices, purchase orders
and container labels to trace the
product back to the manufacturer to
find out information on the manufacturer’s product testing.
Interview the employees who were
working on the date(s) the product
was sold to find out if any employees
or anyone in their family were not
feeling well.
Find out where the claimant has been;
this could lead to other potential areas
of exposure. Has the he or she been
around other sick individuals? Has
he or she been in an unsanitary environment? Has he or she been around
farm animals? Cross-contamination
exposure to a pathogen is more
common than one would think. The
food safety documents should reflect
proper sanitation measures in place,
such as employees washing their
hands every hour, which prevents
cross-contamination.
Gather Data
See if the product is available for
microbiological analysis. Test the
product for pathogens and the pathogen DNA. The pathogen DNA can
be determined by a technique called
Pulsed Field Gel Electrophoresis
(PFGE). The health department and
Center for Disease Control (CDC)
maintain a database called PulseNet.
When someone contracts an illness
such as E.coli O157:H7, the particular
strain of pathogen DNA is isolated. If
the consumer’s pathogen’s DNA does
not match any food product, then an
argument could be made the product is
not the source of the consumer’s illness.
To the extent possible, obtain a complete food history of 14 days prior
to the illness. In most cases, people
forget what they ate a few days ago.
However, a food history could lead to
potential sources of the illness other
than your establishment. For certain
bugs or pathogens, the timeframe
from the date of consumption to the
onset of symptoms could be as long as
10 days. This timeframe is called the
incubation period. Several foodborne
illnesses can be ruled out if the onset
of nausea, vomiting or diarrhea is
within hours of consuming the food.
The types of experts
to consider in a
foodborne illness case
could include an
epidemiologist,
microbiologist, food
safety specialist
and infectious
disease physician.
Additionally, consider the person’s
medical history. The medical evidence provides information in a
couple of areas. Some patients have
a history of gastrointestinal problems that could explain their current
symptoms. The history taken by the
physician is generally a more accurate reflection of the onset of symptoms for the incubation period. The
medical literature on the incubation
period for certain pathogens varies.
Then check to see if the medical literature discussing a particular incubation period has been peer reviewed
and is utilized by epidemiologists and
their field.
Investigate the manufacturer’s food
safety plans and processes. Every
food supplier should have a hazard
analysis and critical control points
(HACCP) plan in place. HACCP is
a preventative food safety system
to ensure the production of a safe
food product. Some HACCP plans
are regulated by the Food and Drug
Administration and U.S. Department
of Agriculture. Collecting information from the FDA and USDA can
provide a valuable defense for your
case if the USDA and FDA have
approved the food processing, cooking processes and the sanitation/
hygiene precautions in place.
Collect any additional information,
including the health department
inspections of the establishment.
Look through the employment files
to ensure the employees have received
the proper training and certifications
specifically on food safety. Collect the
policies and procedures in place for
the store or restaurant on food safety, sanitation and preparation of the
food product.
Choose the appropriate expert. The
types of experts to consider in a foodborne illness case could include an
epidemiologist, microbiologist, food
safety specialist and infectious disease physician.
Defending a foodborne illness claim
takes a lot of time and effort, especially initially in the investigation of the
claim. Your establishment’s reputation and business is directly linked to
the food served to the public. Making
certain your establishment’s food
product did not cause a person’s illness is essential. Vigorously defending a foodborne illness claim ensures
your establishment’s reputation with
the community. LM
Jeff Brinker is a partner with the law firm
of Brinker & Doyen, L.L.P., a defense firm
with in Clayton, Mo. Steve Fields is also a
partner with Brinker & Doyen, L.L.P. Stacey
Shannon is a Branch Manager for Gallagher
Bassett Services, Inc.
Specifically Speaking |
Product Liability
Nuts and Bolts
Handling Building Products Class Action Suits
By William Nebeker and Amel Esposito
S
afe and professional building products are a necessity
for construction projects
of all sizes. A failure or a
defect in a building product can lead to extensive financial
damage and hazardous situations.
Recently, there has been an increased
trend toward class action claims in
housing and construction projects
regarding the products incorporated into the buildings themselves.
Plaintiffs’ attorneys are becoming
focused on single-defect product
liability claims, ranging from Chinese
drywall, to various types of siding, to
Swiggle Seal failures in windows, to
yellow brass plumbing fixtures.
The effects from the resulting class
action claims reach far beyond the
builder and often into the realm of
national and even international manufacturers. These claims can stretch
across multiple litigation districts
and venues nationally and potentially
internationally, which are often very
costly to defend.
Implicated Parties
Although installation issues that can
affect a builder’s indemnity claims
against subcontractors often occur
in the run-of-the-mill construction
defect claim, these newer types of
claims implicate fewer actual subcontractors but involve more parties in
the manufacturing and distribution
process. In a product class claim and
as is typical with a generic construction defect claim, the unhappy homeowner sues the builder for breach of
warranty (either under the contract
or common law, or both). However,
a product liability class claim can also
involve all in the chain of distribution, including the manufacturer, a
supplier and a subcontractor.
Other arguments include: that individualized inquiries will be required
to determine whether installation
contributed to or was the cause of any
damage; that individual damage at
each unit/home will vary; that individualized inquiry will be required
to determine whether homeowner
maintenance or misuse, contributed
to or was the cause of any damage.
Of course, a crafty plaintiff ’s attorney can offer to bifurcate damages
from liability, so not all the defenses
to class certification are a guarantee
against certification.
Reach of the U.S.
Court System
Although a state court construction
claim against a local builder is usually
confined to single state court, a lawsuit seeking to certify a nationwide
product class can be based on the
Class Action Fairness Act (CAFA)
and is typically filed in federal court.
Complete diversity is not required.
In the event the original complaint
does not name the product manufacturer as a defendant, the third-party
complaint should. Jurisdiction over
a foreign manufacturer is based on
the manufacturer’s contacts with
the forum state and/or the United
States. Most state product liability
statutes cover a manufacturer’s duty
to indemnify others in the stream of
commerce and can provide a basis for
indemnity claims.
Class action defenses are typically
aimed at defeating commonality and
typicality. For example, defendants
argue that class action certification is
not an effective tool because the court
will have to make too many factual
determinations in order to determine
who is in the class, or that class certification should be denied because
determination of plaintiffs’ damages
(including the nature and extent of
damages and the actual cost of repairs)
will require individualized inquiries.
insurer, as well as to distributors and
suppliers within the supply chain,
litigation hold letters should be sent
to preserve various documents and
communication related to the product at issue. With the increased use of
electronic discovery, it is important
to include electronic data within the
litigation hold letter.
Insurance Issues
Various exclusions may affect insurance coverage available to cover
product claims, including products
completed operations exclusions,
pollutant exclusions and mold exclusions. Self-insured retention amounts
and deductibles are also a factor to be
considered in defending and settling
these types of claims, as well as in
retention of counsel and experts.
Experts
Litigation hold letters
should be sent to
preserve various
documents and
communication related
to the product at issue.
Manufacturers may have their own
in-house experts. From a defense
standpoint, experts from a particular
field of construction (e.g., window
manufacture and installation, siding
installation, and plumbing installation), as well as from fields that
relate to the product (e.g., metallurgy and water chemistry related to
plumbing systems and yellow brass
claims) are necessary to defend a
product liability construction defect
claim, as are experts from the fields
of construction cost, product quality
and statistics.
Selection of Counsel
Investigation Protocol
Gathering critical information at the
onset of the claim process is key to efficient resolution of a product class action
claim. Key documents include the purchase contract, subcontract agreements,
plans and specifications, and all product
manufacturer information.
In addition to giving notice of the
claim to the manufacturer and their
Selection of counsel experienced
not only with construction defect
litigation, but also class action
defense and electronic discovery,
at both the state and federal level,
is critical. Additionally, given the
insurance coverage issues that can
come into play, counsel experienced in insurance coverage may
be necessary. LM
William A. Nebeker, Esq. is the Managing
Partner of the Phoenix office for the law firm
of Koeller, Nebeker, Carlson & Haluck, LLP.
Amel Esposito is the President & CEO of
Coronado Claims Services.
Municipal Law
Obtaining Evidence
Using Federal or State Laws to Obtain Pre-Filing Evidence
By Sarah Perry, Debbie S. Champion and Tom Kammerer
T
he Freedom of Information Act (FOIA)
was initially enacted
in 1966 as a way to
provide the public
with more transparency of government agencies and departments. This
transparency is achieved by provid-
ing private citizens with the ability
to obtain access to previously unreleased government records. However,
the passage of the FOIA resulted in an
unintentional by-product; requests
are often used by civil litigators as a
way to conduct a preliminary form of
discovery without a potential defen-
dant’s knowledge, even prior to filing
a lawsuit.
While the FOIA aims to increase government transparency on the Federal
level, it does not provide access to
state or local documents. However,
each state and Washington D.C. has its
Sunshine Law or FOIA requests can be
made at any time by any private citizen
and such requests can be very broad.
Under these requests, the safeguards
that would normally exist in a lawsuit
do not exist.
The FOIA specifies nine situations where
the government is exempt from having
to provide records to a civilian pursuant
to a FOIA request. The state laws generally implement some or all of the federal exemptions. For example, Missouri
allows the production of arrest records
through the state’s Sunshine Law, while
other states, such as Delaware, classify
arrest records under an exemption to its
Sunshine Law.
Problems Civil Defendants
May Experience
Records that an individual may obtain
through a Sunshine or FOIA request
can often contain information that is
crucial to the outcome of a civil lawsuit:
u Documents that may be deemed
“work product” in a lawsuit — accident reports, incident reports, statements from witnesses.
u Investigations and findings of government and agency investigations
and complaints.
u Information from businesses that
have been involved in an agency
investigation or complaint.
own freedom of information law, often
referred to as a Sunshine Laws or Open
Records Laws. Although the Sunshine
Laws may vary slightly from state to
state, they all share a similar goal — to
make it easier for a civilian to obtain
government documents.
During a lawsuit, parties can generally obtain information and documents
from the other side only when those
items are relevant to litigation or are
reasonably likely to lead to information that is relevant. In litigation, the
discovery requests may be limited in
scope, in time and in quantity. Unlike
the limited lawsuit discovery process,
These documents can be used to show
that an individual, business or governmental agency failed to comply
with required standards, had prior
knowledge of a dangerous condition
or product concern, or even used as
evidence of causation. If this information is obtained without a potential
defendant’s knowledge, it could be very
detrimental to that defendant’s ability
to put on a thorough defense.
The fact that a plaintiff can request
information prior to filing litigation can
be very problematic for the defending
party in a lawsuit. This allows a potential plaintiff to gain a substantial time
advantage on the defendant. By obtaining information prior to discovery, a
plaintiff can almost completely finish
their trial preparation prior to ever filing suit. This leaves the defendant at a
disadvantage not only as to timing, but
also because the defense attorney has
generally not been made aware of all of
the documents that were turned over if
no record was kept as to the production
under the Sunshine/FOIA requests.
A simple production of pretrial documents regarding an investigation or
accident can seriously undermine a
defendant’s ability to properly defend
themselves from the plaintiff ’s claims.
Sunshine Law
or FOIA requests
can be made at any
time by any private
citizen and such
requests can be
very broad.
A plaintiff can surprise the defendant by seeking to use these records
at a hearing or at trial and the defendant would have no way of anticipating a claim based on the information
obtained from a FOIA request. This
could also have the effect of leaving the
defendant scrambling to catch up to the
discovery while the plaintiff pushes the
court for an early trial date.
A FOIA request can also be used as a
tool by plaintiffs to distract defense
attorneys during the course of a lawsuit. If a plaintiff makes a large request
relatively close to a hearing or trial
date, it could cause defense attorneys
to divert attention away from preparing
for a hearing or trial in an attempt to
determine the content of new information being requested by the plaintiff.
Protecting Against the FOIA
Although a defendant cannot prevent
an individual from making pre-filing
FOIA requests (other than the nine
exemptions), there are important steps
that can be taken to help avoid potential problems and complications caused
by early FOIA records requests. The
most effective way for a defendant who
is involved in ongoing litigation to protect itself is to utilize the traditional discovery process as a way to determine
if the opposing party has made any
prior requests for documents. A defendant should simply ask if the opposing
side has made any FOIA or Sunshine
requests in relation to the current litigation during the normal scope of pretrial discovery. However, this is only an
available option during an ongoing litigation and will not help in anticipation
of lawsuits being filed.
Potential defendants can protect
themselves from issues arising prior to
litigation due to these requests by having a strong line of communication
with the department that deals with
such requests. A potential defendant
can contact the particular department
or office to determine if any information requests have been made regarding any of their records. For instance,
the Food and Drug Administration
puts out a monthly log that will indicate if any FOIA requests have been
made against public entities. Keeping
a careful eye on these logs can help a
potential defendant determine if anyone is requesting information and
will allow a potential defendant to
request those very records. This will
give notice to a potential defendant of
the types of records that are routinely
being requested and will make it easier
for that defendant to anticipate possible future litigation.
In addition, the public entity should
also implement procedures that would
keep record of all documents released
to third parties through such requests,
and make sure the attorney representing the entity knows that such records
The Nine Statutory exemptions in the FOIA
1. Records properly classified to be kept secret by Executive Order in the interest of
national defense or foreign policy.
2. Records relating to matters related solely to the internal personnel rules and
practices of any agency.
3. Records explicitly and absolutely exempted from disclosure by another federal statute.
4. Records revealing trade secrets and commercial or financial information
obtained from a person and privileged or confidential.
5. Records relating to matters that are inter-agency or intra-agency memorandum
or letters that would be privileged in civil litigation.
6. Records relating to matters that are personnel and medical and similar files the
disclosure of which would constitute a clearly unwarranted invasion of personal
privacy.
7. Certain records compiled for law enforcement purposes, but only to the extent
that they
K Could reasonably be expected to interfere with enforcement proceedings;
K Would deprive a person of the right to a fair trial or an impartial adjudication;
K Could reasonably be expected to constitute an unwarranted invasion of
personal privacy;
K Could reasonably be expected to disclose the identity of a confidential
source, including to a state, local or foreign agency or authority or any
private institution that furnished information on a confidential basis, and,
in the case of a record or information compiled by criminal law enforcement authority in the course of a criminal investigation or by an agency
conducting a lawful national security intelligence investigation, information
furnished by a confidential source;
K Would disclose techniques and procedures for law enforcement investigations or prosecutions if such disclosure could reasonably be expected to risk
circumvention of the law; or
K Could reasonably be expected to endanger the life or physical safety of any
individual.
8. Records related to matters contained in reports prepared by, on behalf of, or for
the use of an agency responsible for the regulation or supervision of financial
institutions.
9. Records that could reveal data regarding oil wells.
relevant to the case might have been
produced to an outside requestor.
While years may pass between production and a lawsuit, such record-keeping
procedures are the best way to protect
the entity against such surprises.
Absent an amendment to the State
or Federal laws, plaintiffs will continue to use FOIA requests as a way
to obtain information about possible
litigation without the knowledge of
potential defendants. However, a
potential defendant can take steps to
try and ensure that they will not be
left in the dark if and when a lawsuit is eventually filed. By keeping a
strong line of communication with
the offices that handle such requests
and by being active in the requesting process, potential defendants can
lessen the burden of opposing parties’
use of information requests. LM
Sarah Perry is the Risk Manager for the City
of Columbia, Mo. Debbie S. Champion is
a Partner with the law firm of Rynearson,
Suess, Schnurbusch, & Champion LLC., Tom
Kammerer is an attorney with Rynearson,
Suess, Schnurbusch, & Champion LLC.
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Specifically Speaking | Retail, Restaurant and Hospitality
Total Quality
Root Cause Analysis, Data Trends and the Impact on Claim Exposures
By John Peterson, Margie Hickey and Christian Stegmaier
T
oo often following an
incident, we see only a
cursory review process
and incident report, rather than a genuine effort
to reduce or prevent a reoccurrence of
the circumstances — the true goal of any
forward-thinking risk manager. A model
risk management program must include
thoughtful post-incident assessment to
bring success to the organization as a
whole. Substandard training, inadequate
risk assessment protocols and a lack of
meaningful post-incident analysis are a
mirror reflection of an organization that
talks safety, but does nothing substantive
to achieve it. An organization truly committed to safety must seriously consider
the development and implementation of
a root cause analysis protocol.
ANSI-ASSE-Z690 Series, ASTM F1694,
and OSHA Accident Investigation and
Review are all industry standards, that
provide tremendous guidance for the
development of a meaningful root cause
analysis process. An ideal risk assessment
model illustrates the process and flow of
risk management, which an organization
seriously focused on safety must continuously monitor and review. An organization that fosters a culture of safety is
relentless in reviewing events and assessing risk treatment effectiveness. When
done correctly, such an organization is
typically demonstrating an adherence to
the standard of care within its industry.
This is a very good thing.
However, when an organization has
repeated preventable injury events,
such outcomes reflect a systemic lack
of commitment to safety. The natural consequence of such outcomes in
the era of litigiousness is unquestionably an organization that is exposed
to more claims and lawsuits, which
are typically harder and more expensive to resolve. In such a scenario, an
organization’s risk management must
therefore be a catalyst for crafting the
change necessary to focus the organization on safety and accident prevention. The first step is dedicating the
organization to post-incident root
cause analysis.
Studying Causation
Put the terms “root cause” and “data
trends” together as the title of an article and what you end up with might
also be called “Monday Morning
Quarterbacking.” Simply stated, if an
organization does not take the time to
study the causation of claims by seriously analyzing claims data, there can be
no progress towards an internal safety
culture. It is the claims data that will provide the compelling financial backdrop
and information needed to obtain funds
from executive level management or the
board of directors to invest dollars into
the internal risk management program
and therefore focus on risk prevention/
safety culture. For example, a focused
study of the incurred costs of slip and
fall claims in the produce department
of a grocery store chain could be used
to demonstrate the need for upgraded
flooring or perhaps the need to market
grapes already bagged instead of displaying them loosely.
Without an organization understanding data trends/metrics and then more
importantly being proactive in addressing what needs to be done, their claims
professionals on the front line have little
choice but to settle claims for more and
more money. By doing so, the adjuster
is essentially protecting their insured or
the client from themselves. The opportunity to defend claims becomes nonexistent. If the case falls into litigation,
the discovery process will very quickly
reveal adverse information about an
organization’s lack of safety standards
and could even demonstrate systemic
notice to the defendant. This information can be very damaging, and in the
worst of cases, can even result in an
award of punitive damages.
“Monday Morning Quarterbacking”
of claims data should be viewed
as an essential and serious tool.
Understanding the root cause in the
context of the data can certainly be a
positive catalyst for risk management/
prevention programs and fostering a
culture of safety.
Best Defense
The best clients to defend are those who
value the use of root cause analysis. That’s
because there is an almost inarguable
correlation between a client using root
cause analysis and the client possessing a safety culture in the organization.
A safety culture connotes the organization’s seriousness about the well-being
of its employees and the public. A job of
counsel in litigation is to paint his or her
client as the party wearing the white hat.
The more defense counsel can demonstrate an incident giving rise to suit was
at most a simple accident — rather than
the product of a systemic disregard for
safety — the better the chance counsel
has at showing the client is in fact wearing a white hat.
Wearing the white hat equals counsel being able to control the client’s
indemnity exposure. Controlling the
exposure includes avoiding every
claims professional’s nightmare scenario — punitive damages. This is
because a safety culture that embrac-
a lawyer involved will focus the investigation on what’s most important for the
client to learn and document. Rather
than just handing an employee a form
entitled “Root Cause Analysis” and having him or her fill it out, counsel can
interview the personnel involved using
careful questioning and accurately document the information that is conveyed.
There can be a big difference in meaning between a stream of consciousness recitation by an employee on a
blank sheet of paper versus thoughtful documentation by skilled counsel.
While having counsel involved on the
front end of a claim may cost extra
dollars for the client, based on experience learned the hard way when
post-incident investigations weren’t
handled correctly, this involvement
pays off in dividends for the client
What is Root Cause Analysis?
Root cause analysis is a structured method of identifying the root causes of a problem or event. It focuses on the core of the problem, rather than the symptoms, in an
attempt to identify opportunities for improvement. Root cause analysis begins with
data collection and an analysis of the sequence of events. The ultimate goal is to
prevent similar incidents from recurring.
es a consistent effort to engage in
thoughtful post-incident root cause
analysis indubitably reduces the
chances that subsequent incidents will
be the result of egregious conduct that
would put punitives in play.
From a legal standpoint, root cause
analysis can be a double-edged sword,
because when it’s prepared or managed incorrectly, a root cause analysis
can create the proverbial smoking gun
for a claimant’s counsel in subsequent
litigation. To that end, ideally — especially following incidents involving serious injury — the client should employ
counsel to assist in the investigation of
the prospective claim. Having counsel
involved on the front end serves two
purposes: the attorney-client privilege
and/or the work product doctrine arguably will operate to protect most, if not
all, of the investigation from disclosure;
and perhaps more importantly, having
with regard to creating useful documentation and analysis of an incident, as well as when defending the
claim if it goes into litigation.
Organizations that are serious about
safety commit to undertaking postincident root cause analysis. There is,
however, a right way and wrong way
of pursuing such reviews. The best root
cause analysis programs encourage collaboration and partnership between an
organization’s in-house risk management, their external claims professional
partners and defense counsel. LM
John Peterson is Loss Prevention Area
Manager, Western Region for HMSHost in Las
Vegas. Margie Hickey is Account Manager and
Senior Claims Specialist at CCMSI in Concord,
California. Christian Stegmaier is an attorney and chairman of the Retail/Hospitality/
Entertainment practice group at Collins &
Lacy, PC in Columbia, South Carolina.
Specifically Speaking | Diversity
Rethinking Diversity
How Cultural Competency Impacts the Bottom Line Success of Your Company
By Pamela Carter and Angela Henderson
W
hat is cultural
competence and
how does it affect
productivity and
prof itability?
Good questions that more people, law
firms and corporations should be asking. Cultural competence is an integrated
pattern of human behavior that includes
thoughts, communications, languages,
practices, beliefs, values, customs, courtesies, rituals, manners of interacting, roles,
relationships and expected behaviors of a
racial, ethnic, religious or social group.
How can a corporation’s position on
diversification be applied within the
managerial core? Joyce Coles, managing
director of Traditions, Inc. says, “Diversity
within our organization is defined and
understood as a responsibility of all
employees from the non-exempt level to
the c-suite. Our definition encompasses
not only cultural diversity but ethnicity,
gender and the diversity of thought, experiences and backgrounds.”
How does cultural competence and
diversification affect productivity
and profitability? They are essential to growth and development.
Even before everyday employers
started to compete on a global platform there was the consumer right
here on Main Street to consider.
Marketing programs developed
from a stereotypical point of view,
product development that did not
strike at the soul of the consumer ...
these represent dollars spent (sometimes millions) on an ineffective
and unenlightened attempt to influence the marketplace and tap into
the consumer’s purchasing norms
driven by cultural needs.
These blunders are sometimes hilarious when viewed from our armchairs,
but many times these are mistakes
that could have been prevented with
the application of cultural sensitivity. As CNBC.com reports, “During the
2011 Super Bowl, the e-commerce site
Groupon aired three advertisements. In
most cases, any company airing a memorable ad during Super Bowl Sunday
is guaranteed to become the subject of
water cooler discussion the following
Monday. This is exactly what happened
to Groupon, but it wasn’t a good thing.
The company ran ads featuring
famous celebrities, among them actor
Timothy Hutton. His spot began with
him discussing human rights abuses
in Tibet, and then raving about the
deals Groupon offered on fish curry
at Himalayan restaurants. Scores of
viewers were offended at what they felt
was the trivialization of an important
cause, and the backlash to the ads was
severe. The company pulled the ad
four days later.
Some would define cultural diversity
within the organization as the way in
which the consumer views the corporation and vice versa. Complexity and
diversification of the picture one presents to the consumer is what forms
your profile and is what can distinguish
you from your closest competitor.
Mark E. (Rick) Richardson, vice president and associate general counsel at
GlaxoSmithKline had this to say, “At
GSK, we see diversity and inclusion
as a key business driver in our efforts
to deliver value to our customers and
achieve market leadership. We recognize that attracting, developing and
retaining a workforce that reflects the
diversity of our customers enhances
customer insight and our ability to best
serve the needs of patients and stakeholders. Every day, the diverse talent
in our workforce helps us advance our
goal of helping people do more, feel
better and live longer.”
Organizations that can inspire the
consumer to invest in their products
across cultural lines are most certainly utilizing individuals in their
testing, development and design
phases to understand the differences and work to unite the consumer
across those lines.
Many of the top organizations have
also been acknowledged for being
leaders in the areas of diversity
management. Several magazines are
devoted to the search and recognition of top organizations and when
named the connection between the
diverse consumer and the corpora-
Many of the
corporations who are
highly ranked as
having diverse
leadership also top
Fortune 500’s list of
America’s largest and
most profitable
organizations.
tion seem to be immediately evident — Kaiser Permanente, Bank of
America, McDonald’s, Kraft Foods,
Fannie Mae, Wal-Mart and AT&T
to name a few. But diversity means
much more than simply hiring or
advertising to minorities.
Kaiser Permanente was deemed by
Diversity, Inc. to be the top choice for
corporate diversity in 2011. Kaiser
Permanente’s Board of Directors is
half Black, Latino and Asian and
36 percent women, according to
Diversity Inc.com’s rankings. “What
makes Kaiser remarkable is the consistency of its diversity-management
efforts, as well as the alignment
between diversity in the workplace
and diversity in the customer base. For
example, the organization’s Institute
for Culturally Competent Care and
the nine Centers of Excellence are
making significant strides in eradicating healthcare disparities for
Blacks, Latinos, Asians, people with
disabilities and immigrants.”
Kaiser Permanente evolved from
industrial healthcare programs for
construction, shipyard and steel mill
workers for the Kaiser industrial
companies during the late 1930s and
1940s. Today, Kaiser Permanente has
developed into the non-profit Kaiser
Foundation Health Plan and Hospitals
and Permanente Medical Groups with
more than 8 million enrolled members
in their health plan. Having a respect
and recognition for the many cultural needs of the communities they
serve is a direct reflection of Kaiser
Permanente’s investment in seeking
out high-level managers who understand the consumer’s concerns.
It should be no surprise that many
of those corporations who are highly
ranked as having diverse leadership
also top Fortune 500’s list of America’s
largest and most profitable organizations — Wal-Mart, Fannie Mae and
Bank of America all made the Top 10
list in 2011.
So what does all this mean when we
reflect on our original definitions of
cultural competence within an organization? How does achieving diversification within your corporation help
attain these goals?
“Our customer base and the U.S. population in general is becoming increasingly more diverse, so it is imperative
that our workforce reflect the customers that we serve and their needs,”
according to Coles. “With diverse
employees we can appropriately customize our marketing and products
to fit the preferences of our diverse
customers. Having this alignment
through our diversity efforts keeps us
competitive and increases profits.” LM
Pamela Carter is the founder of Carter
Law Group. Angela Henderson is a Claims
Supervisor for BerkleyNet Underwriters.
PROFESSIONAL LIABILITY
Check the Record
Helpful Hints for Reviewing Medical Records
By Nancy A. Noetzel and Andrew Hirsch, D.O.
R
eviewing
medical
records can be challenging even for those
professionals with a
medical background.
There are some things all claims handlers and defense counsel can recognize and look for when reviewing
medical records. All claims handlers
and defense counsel should have a
comprehensive understanding of the
medical history and injury detail of a
plaintiff, because it allows for a better assessment of the value of the case
and can often render a better outcome. This is not to say the review
should be a substitute to any medical professional record review when
needed, but with a sharp eye on those
records, case delays may be avoided
in resolving cases by not having to
wait for a review and/or report from
an expert.
Start at the Beginning
At the onset of any injury an individual is usually looking for nothing more
than relief of the pain caused by the
recent accident. An injured person is
not likely to tell an emergency medical
technician to look at his or her left arm
when he or she has just sustained an
injury to the right shoulder. The medical record review should start with the
initial complaint reported to the first
treating medical provider. The ambulance records will describe what was
observed and what was complained
of when first responders arrived at the
accident scene. It may tell note if the
plaintiff has a history of any medical
condition, if they are on any prescrip-
tion or over-the-counter medications
and what the plaintiff was doing when
the injury was sustained.
If the plaintiff was treated in an emergency room, note all of the above along
with what diagnostic tests were performed. If the diagnostic test(s) performed have radiologist reports with
them, be sure to review those as well.
An emergency room doctor may do a
preliminary review of images taken,
however, until the images are reviewed
by a radiologist, the findings are not
always confirmed. It is not unusual for
images to be reviewed by a radiologist
the day after they were taken.
When handling a case with a causation defense, consider a radiologist
review of the images in question, par-
If a plaintiff has had a hospital admission, it is a good idea to review the
Discharge Summary first. Not only
will it give you a snap shot of the
course of treatment during the hospital stay, medical history, status and
plan for treatment at the time of discharge, but it could also save time
in trying to weed through what can
sometimes be a voluminous amount
of records. Reading this report first
will help hone in on what other
records to review. For example, if the
Discharge Summary advises that the
patient underwent a surgery during
the hospital stay, review the Operative
Report to see what the findings were.
If the patient was seen by a consultant,
that specialist’s report could describe
the plaintiff ’s history, illness, injury
and treatment.
ticularly if there are pre-accident studies. Radiologists specialize in reading images, orthopedics specialize in
treating bone and connective tissue
injuries. An orthopedic will often rely
on the expertise of a radiologist to verify an orthopedic diagnosis.
Also note any blood work that may
have been done in the ER. Most lab
reports give normal ranges on the
report page. It will indicate if any result
is not within normal limits. The report
does so by putting any abnormal value
out of column from the normal results
or will simply put an (h) high or (l)
low next to the abnormal result. These
results can be indicative of an underlying medical condition.
Broaden the Investigation
If looking to determine any potential
intoxication or drug use by the plaintiff,
take note of the observations documented by the ER nurse or doctor: patient
incoherent, disoriented, combative, AOB
(alcohol on breath). If there is a toxicology
report in the records, it will show if there
were any drugs found in the patient’s system and what those drugs were.
Medications taken by the plaintiff can
often be a major key or trigger to causation arguments. Take advantage of
the Internet and look up the medications reported by any plaintiff. Look
for their uses. For example, a plaintiff
can claim depression as a part of his
or her bodily injury claim, however,
many patients are on anti-depressants
prior to the date of loss.
There are some phrases to look for
in the medical record verbiage that
could indicate a provider may have
treated a patient in the past: “Patient is
well known to me…”, “Patient returns
Key Documents for
Evaluating a Bodily
Injury Claim
K EMT or Ambulance Records
K ER Records
KOR Records
KDischarge Summary
KConsultation Reports
today…”, “Patient has shown improvement…”, “Patient requests prescription
refill”, “As noted in the past…”, “Patient
presents with a new complaint.” Any
of these phrases in the records are a
trigger that the provider has treated
the plaintiff in the past. When looking
for a prior diagnosis, injury, treatment
or complaint that could mitigate the
value of the plaintiff ’s injury, always
have counsel secure releases to include
all prior records from the treating
medical provider.
Consider discussing findings and
opinions with independent medical
examination (IME) doctors. Both
defense counsel and claim investigators should understand the medical report. IME doctors are typically happy to explain their reports.
Remember also that in most cases,
the plaintiff is accompanied to the
IME by someone from his or her
counsel’s office and they are often
advised not to report any specifics or
detail regarding the accident to the
defense examining doctors. This is
sometimes noted in the IME report.
More information on the accident
itself could alter or change the opinion of defense experts and when a
causation defense is being considered, experts should have the benefit
of this information.
Like most tasks, reviewing medical records becomes easier only
by doing it. They are not always as
intimidating as they can sometimes
appear. Starting with the first compliant and the first treatment can
provide direction on what to look
for in the records. A comprehensive
evaluation of the medical records
provides a better understanding of
the overall medical picture of the
plaintiff, injury and value of the case,
which can be advantageous when it
comes time to negotiate. LM
Nancy Noetzel has 13 years of experience in
claims litigation with a prior 20-year nursing
career. Andrew Hirsch, D.O. is Diplomat of
the American Board of Family Practice, and
President of Horizon Medical Group.
Honoring
Excellence
Ken Carter
Insurance/TPA
Karen Dunning
Corporate
Michael Caspino
Outside Defense Counsel
K
en Carter, Mike Caspino and Karen Dunning
were named the Litigation Management
Professionals of the Year during the 2012
Claims and Litigation Management (CLM)
Alliance Annual Conference in San Diego.
These three professionals were chosen by CLM Advisory
Board members in recognition of their contributions to the
profession, their clients and/or their employer.
“We introduced the award program this year and were
thrilled to receive many nominations of amazing litigation
management professionals,” says Adam Potter, Executive
Director of the CLM. “We created the award program to recognize excellence in our industry and encourage professionals to lead the way as the industry grows and evolves while at
the same time sharing their expertise with colleagues across
the country.”
Ken Carter
Insurance/TPA
Ken Carter, Corporate Casualty Claims Manager, Merchants
Insurance Group, was named the Litigation Management
Professional of the Year
in the Insurance/TPA
catagory. He is responsible for Merchant’s $11
million annual litigation
management
budget
and is an enthusiastic
proponent of incorporating technology into
litigation management.
Carter initiated an alternative dispute resolution
program to help resolve
coverage, indemnification and other risk transfer disputes. He is also an advocate for ongoing education
among his staff and is a frequent speaker and educator.
Ken is a
consummate,
highly skilled claim
professional in every
way possible.
At Merchants, Carter created a staffing model algorithm that
factors litigation rates in claims and segmentation by matter
complexity into determining the organization’s staffing needs.
He also created a legal invoice processing system and created
new litigation cost forecasting models. Additionally, he places
great focus on training all stakeholders in litigation manage38 | LitigationManagement | summer 2012
ment to further his observation that effective claim departments cannot simply be claim processors — they must also
be part of the company’s overall risk management function.
In his nomination letter, Robert H. Faberburg, CPCU, Vice
President Claims for Merchants Insurance Group, noted
that, “Ken is a consummate, highly skilled claim professional in every way possible. He has substantially raised the level
of professionalism in our claim organization and brings a
focus to our litigation management process that we did not
enjoy prior to his association with our company.”
Michael Caspino
Michael Caspino, Founding Partner of Brady, Vorwerck,
Ryder & Caspino, was named the Litigation Management
Professional of the Year
in the Outside Defense
Counsel category. He is
a leader in the areas of
alternative fee arrangements and strategic
claims
management.
Using a mixture of AFAs
and a strategic approach
to defense efforts in construction defect claims,
he was able to achieve a
33 percent reduction in
defense costs, a 42 percent reduction in indemnity costs and a 61 percent reduction in average file cycle
times. Caspino is a frequent speaker on AFAs and shares
his knowledge and advice on the topic with many insurance
companies and even other law firms.
Mike is a pioneer
in litigation
management techniques
that have been
successfully used in
strategic claims
management.
He is a pioneer in litigation management techniques that
have been successfully used in strategic claims management. His analysis and implementation of case resolution
methodologies across large books of claims, as opposed to
a “one-at-a-time” approach to claims resolution have proven
to be highly effective in resolving cases and saving clients
money. For one book of workers’ compensation claims, he
was able to resolve 55 percent of serious injury cases within
eight months, even though they had been deemed “unsettleable” by the previous law firm managing the cases.
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In addition to his work in the litigation management industry, Caspino is an active community member, serving on the
Board of Directors for both Casa Teresa (a home for pregnant, homeless women in Orange County, Calif.) and Serra
Catholic School (the largest Catholic elementary school in the
country). He’s also involved as a Little League coach and is the
President of Legatus, a Catholic business leadership group.
Recently, he received the “Man of Character Award” from the
Orange County Council of the Boy Scouts of America.
She is an energetic leader who inspires others to see beyond
the everyday and become change agents within their organizations by using the rich data resources on hand and
applying analytics to define a winning strategy. Dunning
continues pioneering work by applying experience curves to
the legal industry that would result in predictable cost and
selected outcomes for litigation matters. Adoption of these
experience curves will differentiate the industry disruptors
that change the landscape, delivery and cost of legal services.
Karen Dunning
Corporate
“It’s an honor to recognize these three winners, along with
our other finalists in the Litigation Management Professional
of the Year award program,” says Potter. LM
Karen Dunning, Senior Director of Legal Operations,
Motorola Solutions Inc., was named the Litigation
Management Professional of the Year in the Corporate category. Dunning was selected by the CLM Advisory
Board in recognition of
her work in improving
the efficiency and the use
of analytics in her role at
Karen is an
energetic leader who
inspires others to see
beyond the everyday
and become change
agents within their own
organizations.
At Motorola Solutions
Inc., her Strategy and
Business Operations team
improved the efficiency
of getting law work done
through updated policies,
automation and streamlined processes that created real cost savings. She
has been honored in the past for her market-differentiating
Legal Spend Management Model, which includes five components: Analytics, Benchmark, Dialog, Automate and
Architect your Strategy.
Dunning developed the KED Rate Ladder© as a visual tool to
help depict actual law firm rates from TyMetrix’s Real Rate
Report and enables quick analytical understanding of rate
relationships. Using the KED Rate Ladder© focused conversations with outside counsel by managing and reducing
legal spend with top firms. Understanding how Motorola
benchmarks to other corporations, combined with their
own data, drove data-driven negotiations and decisions that
improved results to the bottom line.
The Finalists
The Litigation Management Professional of the Year award
program recognizes one individual in each of the following
categories: insurance/TPA, corporate, and outside defense
counsel. Three finalists in each category were selected and
then the CLM Advisory Board members selected the winner
in each category. The finalists in each category were:
Insurance/TPA
K Ken Carter, Corporate Casualty Claims Manager,
Merchants Insurance Group
K Michelle Newman, Claims Litigation Consultant,
Connecticut Medical Insurance Company
K Lori Doyle-Place, Assistant General Counsel,
Liberty Mutual Insurance Company
Corporate
K Ron del Pino, National Claims Manager, Verizon
K Karen Dunning, Senior Director of Legal Operations,
K Matthew Steinberg, Vice President and Litigation
Counsel, Kindred Healthcare
K John Browning, Managing Partner, Lewis Brisbois
Bisgaard & Smith
K Michael Caspino, Founding Partner, Brady,
K Karen Painter Randall, Equity Partner, Connell Foley
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From Voir Dire
to “Voir Google”
Using Social Media in Jury Selection and Jury Monitoring
By John G. Browning and Carol Kreiling
I
n today’s digital age, in which 65 percent of
all adult Americans have at least one presence on a social networking site, social
media has become seemingly inescapable
— even in the jury box. With 850 million
worldwide users on Facebook and over 300 million
Twitter accounts, people are putting more and more
information about themselves online, and that can
be good news for enterprising defense counsel, risk
managers and claims professionals striving to keep
“bad” jurors out and “good” jurors in. Voir dire is
becoming “voir Google,” as more and more lawyers turn to researching a prospective juror’s online
presence and social media activity as part of jury
selection in the 21st century.
The online searches of prospective jurors were
explored in high profile cases like the Barry Bonds
perjury trial and the first corruption trial of former Illinois governor Rod Blagojevich. In the most
notorious example to date, the murder trial of Casey
Anthony in Florida, both sides used social media to
vet and monitor the jury. Prosecutors armed with
Internet information on prospective jurors used
challenges to dismiss an individual who allegedly
posted the jury instructions on his Facebook page
and joked about a book deal, along with one panelist who tweeted, “Cops in Florida are idiots and
completely useless.”
Facebooking the Jury
“Facebooking the jury” isn’t just for high profile
cases. Civil and criminal attorneys on both sides
of the bar are realizing the wealth of information
that is only a few mouse clicks away. As jury consultant Jason Bloom of Dallas-based Bloom Strategic
Consulting explains, “Jurors are like icebergs —
only 10 percent of them is what you see in court.
But you go online and sometimes you can see the
rest of the juror iceberg that’s below the water line.”
In civil cases, what you can find out about a prospective juror can be critical. In a Florida products
case involving an industrial accident that occurred
in a tight, confined space, the plaintiff ’s jury consultant researched the social media pages of the potential jurors. One had on his MySpace page the fact
that he belonged to a support group for claustrophobics. Sensing an empathetic juror in the making, they kept him on the panel; he wound up being
the foreman of the jury that delivered a significant
verdict. In another products case, lawyers for food
giant Conagra were defending a case brought by a
woman who alleged that she had contracted a rare
lung disease caused by ingesting large amounts of
microwave popcorn containing the chemical diacetyl, made by Conagra. After the jury was sworn in,
Conagra’s lawyer discovered that one juror had a
Facebook page filled with anti-corporate rants and
links to websites critical of large corporations like
BP and McDonald’s. They argued that he had been
deceptive during voir dire about his anti-company
bias, and the judge agreed, dismissing the juror.
Conagra later won a defense verdict.
Given the importance of the information gleaned
from a prospective juror’s social networking profile, courts
around the country are gradually warming to the concept
of technology-aided voir dire. In a 2009 medical malpractice case in New Jersey, plaintiff ’s counsel was on his laptop doing online research on members of the jury pool. The
judge ordered the attorney to stop, saying “it’s my courtroom and I control it.” After a defense verdict, plaintiff ’s
counsel appealed, arguing that the court erred by prohibiting him from doing online research as part of jury selection.
The appellate court agreed that banning web searches during voir dire was unreasonable, stating that the trial judge’s
concerns over disruption or maintaining a level playing field
in his courtroom were unfounded. As the appellate justices
put it, “The ‘playing field’ was, in fact, already ‘level’ because
Internet access was open to both counsel, even if only one of
them chose to utilize it.”
The Missouri Supreme Court took things a step farther,
ruling that investigating a jury pool is not only permitted,
but that you might even have a duty to use such online
tools. In a medical malpractice suit, counsel for the plaintiff asked the panel during voir dire about their civil litigation history. While various members of the panel answered
affirmatively, one — Ms. Mims — failed to respond. After
a defense verdict, plaintiff ’s counsel investigated Mims’
civil litigation history using Missouri’s Case.net automated service. He found there was good reason for Mims to
stay mum. The juror had been a defendant in a personal
injury case, as well as numerous debt collection matters.
Plaintiff ’s counsel filed a motion for new trial, arguing that
Mims had intentionally failed to disclose her prior litigation experience during voir dire. The trial court granted a
mistrial, and the defendant appealed.
Although the Missouri Supreme Court upheld the mistrial,
it had some choice words about the responsibility of attorneys to discover information about jurors. It observed,
“In light of advances in technology allowing greater
access to information … it is appropriate to place a
greater burden on the parties to bring such matters
to the court’s attention at an earlier stage. Litigants
should not be allowed to wait until a verdict has been
rendered to perform a Case.net search for jurors’
prior litigation history when, in many instances, the
search also could have been done in the final stages of
jury selection or after the jury was selected but prior
to the jury being empanelled … a party must use reasonable efforts to examine the litigation history on
Case.net of those jurors selected but not empanelled
“Jurors are like icebergs —
only 10 percent of them is
what you see in court. But
you go online and sometimes
you can see the rest of the
juror iceberg that’s below the
water line.”
— Jason Bloom,
Bloom Strategic Consulting
and present to the trial court any relevant information prior to the trial.”
In an age in which a few clicks of a mouse can reveal an abundance of information about prospective jurors (sometimes
too much information) and in which people are revealing
more than ever about themselves online, doing social media
research during voir dire makes more sense than ever. Not
only can you avoid having a juror with a hidden agenda sitting on your panel, but you might actually prevent a mistrial
or overturned verdict on appeal.
Trial Monitoring
Jury selection, of course, is just part of the battle. Monitoring
social media has become an increasingly important part
of the modern trial. First of all, monitoring for any online
activity by the jurors themselves can be the first indication
of who is abiding by the court’s rules and who isn’t. In most
instances of online misconduct, offending jurors have been
turned in by fellow panel members, but there is no reason
why a vigilant trial team cannot discover this as well.
Second, monitoring of social media in connection with a trial
can help a lawyer gauge the effectiveness of trial strategy and
When
Experience
Counts
make any necessary adaptations, as well as gain updated
information that may assist in witness examination. In a
high profile perjury trial of baseball pitcher Roger Clemens,
Judge Reggie Walton issued a gag order to prevent participants from talking about the case, but she was “disturbed” by
what audience members — including members of Clemens’
family — were saying about witnesses via social media. Janet
Johnson, Clemens’ sister, tweeted repeatedly, attacking the
credibility of one of the chief witnesses against her brother,
Tom Pettitte. Others disparaged Clemens’ accuser, Brian
McNamee, online as a “drug dealer.”
Perhaps the best example comes from the Casey Anthony
trial. Trial consultant Amy Singer described the whole trial
as “social-media driven,” and bluntly stated, “Social media
was the difference between winning and losing.” The case —
which began, appropriately enough, with Cindy Anthony’s
distraught July 3, 2008, MySpace post wondering why
she couldn’t see her granddaughter — resulted in 325,283
Twitter posts by the time the verdict was returned. During
the trial itself, Singer and a team of consultants monitored
over 40,000 Internet sites and pages, giving them a glimpse
into the public’s pro-prosecution thinking. Such use of
what may have been, in effect, the world’s largest shadow
jury, provided Singer and the defense team with invaluable
insight that enabled them to form more persuasive arguments by keeping track of such things as important negative
comments that they had isolated and analyzed. Researching
how trial strategy, witnesses and evidence were being perceived in the court of public opinion helped the defense
team address such issues more effectively and proactively in
the courtroom.
Embrace Technology
In both jury selection and jury monitoring, use every tool
at your disposal. There are a growing number of iPad apps
that can be very helpful if you’re conducting a “trial by
iPad.” Applications like iJuror or JuryTracker can assist the
trial team in juror observation, including making notes on
each juror. And while Google is great for an initial search,
consider search engines like Social Mention as well, which
“scrapes” status updates, recognizes the code associated with
user names and can also be used to set up “social alerts” (like
Google alerts) to monitor jurors’ social media habits. You
can also track jurors by taking note of their “likes,” group
memberships on Facebook or hashtags in tweets. After all, if
you were defending a dramshop liability case, wouldn’t you
want to know about a prospective juror’s tweets at “#MADD”
(Mothers Against Drunk Driving) or that she was a Facebook
fan of SADD (Students Against Drunk Driving)?
But what about the ethical issues involved in monitoring the
social networking activities of jurors and prospective jurors?
To date, only one ethics opinion has addressed this question. In New York County Lawyers’ Association Committee
on Professional Ethics Formal Opinion 743 (May 18, 2011),
the Committee held that “passive monitoring of jurors,
such as viewing a publicly available blog or Facebook page”
is permissible so long as lawyers have no direct or indirect
contact with jurors during trial. Significantly, the NYCLA
cautioned lawyers to “not act in any way by which the juror
becomes aware of the monitoring.” The Committee, perhaps
cognizant of the fact that sites like Twitter and LinkedIn
allow users to view who has recently accessed their profile,
reminded attorneys that access that a juror becomes aware
of may very well constitute “an impermissible communication, as it might tend to influence the juror’s conduct with
respect to the trial.” In addition, the Committee took note of
the prevalence of online misconduct by jurors. It concluded
that if, during monitoring of jurors’ social networking sites,
a lawyer learns of juror misconduct, “the lawyer may not
unilaterally act upon such knowledge to benefit the lawyer’s
client, but must … bring such misconduct to the attention of
the court, before engaging in any further significant activity
in the case.”
Of course, there are ways to avoid making jurors aware
that they are being followed on Twitter. Companies like
X1 Social Discovery, for example, offer a specialized public
follow feature that enables access to all the past tweets of a
specific user (up to 3,200 past tweets) and any new tweets
in real-time without generating a formal follow request
that results in a notification to the juror you’re following.
As far as concerns for jurors’ privacy go, it’s good to keep
in mind that virtually all social networking sites remind
their users of the public nature of what they’re sharing.
As Twitter’s own Terms of Service state, “What you say on
Twitter may be viewed all around the world instantly. You
are what you Tweet!”
Just as social media can be a useful tool in yielding potentially game-changing information for lawyers, risk managers
and claims professionals during the pre-suit and discovery
phases of a case, it can also provide valuable insight when
selecting jurors and monitoring online discussions about a
case. Also, don’t forget that social networking is not a oneway street; your insureds and even your trial team should be
cautious about what, if anything, they post as well. LM
John Browning is a partner in the Dallas office of Lewis Brisbois Bisgaard &
Smith. Carol Kreiling is a Vice President with Swiss Re.
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Getting to Yes
The Do’s and Don’ts of Mediation
T
he growth, popularity and success of mediation as a settlement vehicle is revolutionizing
how many professionals conduct their postnegotiation risk analysis. Lawyers and their
clients are successfully incorporating mediation into their resolution processes. More insurers are also
embracing the value of mediation for all types of cases from
simple tort to more complex commercial matters.
To better understand the mediation process, a panel of
experts was assembled to address some key questions about
mediation. Their collective responses will give you a clear
picture of the Do’s and Don’ts of mediation — a proven process that is often your best opportunity available for the disposal of disputed cases.
Alex Goodrich, Vice President of ADR Systems’ Risk
Management Services: What’s your opinion regarding when
to commence mediation? If you do it early on in the case, what
information is needed at a minimum?
Hon. Daniel J. Kelley (Ret.): Generally speaking, the sooner your case gets to mediation, the greater the economic
benefits to the parties (fewer depositions, experts, etc.). On
the other hand, as a mediator, I have a better understanding
of the case with more discovery and fuller disclosure. One
thing is certain — the case should not be mediated until the
attorney and the client have sufficient information to properly evaluate it.
Louis Cairo, Senior Partner, Goldberg Weisman Cairo: I
think Judge Kelley is correct, when you agree to mediate,
everyone should know what the pros and cons are regarding going to trial. However, I think it is often wise to consider mediation at a much earlier stage if parties agree on
the liability facts and damage aspects of the case. The main
physicians may need to be deposed to establish evidence of
permanency, future medical treatment and/or loss of trade
or diminished earning capacity. Nonetheless, if the parties
have a handle on the facts and damages, then a successful
mediation can be accomplished without taking that last fact
deposition or final expert on vocational rehabilitation.
Rich Lenkov, Bryce Downey & Lenkov: The earlier you
start mediation the better. I generally know about 80 percent of what I need to know about a case when I receive
the assignment. Remember, I often receive these cases when
the statute is about to expire, meaning that the case has
been around for at least two years, sometimes longer. The
name of the game for me as a defense attorney is to close
the case as quickly and as economically as possible, rather
than spend a lot of time and money on costly discovery and
litigation. However, there are many cases where you have to
go through some initial discovery before mediation.
Goodrich: Once you agree to mediate, how do you select
a mediator?
Lenkov: I have mediated with judges who have a spectacular
resume, but were not very effective in persuading the parties
to settle. What really distinguishes the best mediators are
their people skills. The top mediators are able to deal with a
diverse mix of personalities from all walks of the socioeconomic spectrum, and ensure that they all feel as though the
process is working for them. This is a rare skill, but one that
is crucial to successful mediation.
Cairo: As a gregarious Italian and plaintiff ’s attorney, I like
mediators with a pleasant personality who can discuss the
complex issues associated with a case as easily as current
events and sports. Once the negotiations start, I insist on
a mediator who is willing to discuss the positions of the
adverse party, and to take back responses. The best mediators are very effective in presenting the pros and cons of
either side’s arguments and making recommendations and
expressing opinions on the probable efficacy of my positions
as well as the defendant’s.
Goodrich: How do you actually make the selection of a mediator?
Judge Kelley: An attorney and client should select a mediator whose style and background matches what they are
seeking. It is essential that you do your homework before
making a selection. Inquire about a prospective mediator’s
background and training. Ask for biographies, and do not
be afraid to make inquiries with other attorneys regarding
the mediator’s knowledge of your case type. One way to condense the mediator selection process is to utilize a mediation vendor. Most, if not all, of the information you will be
looking for can be provided by the vendor.
Goodrich: Why do negotiations break down in mediation?
How do you avoid an unsuccessful mediation?
Cairo: Sometimes the expectations of the parties, when
unreasonable, will be a major impediment to a successful
mediation. If a plaintiff demands that the case settle for jury
verdict value, it will often result in an unsuccessful mediation. Additionally, if a defendant remains steadfast with a
defense, then mediation is doomed before it begins. The
bottom line is that both sides have to keep an open mind
and be willing to concede that their case may not be as rock
solid as they have claimed in their submission briefs.
Lenkov: I agree with Lou that unrealistic expectations are
a major obstacle. The reason mediations fail is due to one
simple concept — ego. Backing down from your position
of strength is difficult, especially when you are dealing with
mediators, clients and attorneys who have worked with you
before and will work with you again. Successful mediation
inherently involves putting aside your ego.
Goodrich: Last question: Why is mediation such a big success
and why does it continue to grow in usage?
Judge Kelley: It is true that unrealistic expectations often
prevent a successful mediation. I see a few other reasons for
mediation breakdown, and these include: non-commitment
by one or more of the parties; the individuals essential for
the settlement, such as a party, an adjuster with sufficient
authority, or an attorney, are not at the table; the case is not
ready for mediation; one or more attorneys are not prepared; and the wrong mediator was selected.
Lenkov: Litigation is now more time-consuming and
expensive than ever. The satisfaction of presenting your case
to a jury is tempered by its cost and risk.
Goodrich: When and how do you give authority to a mediator?
Cairo: Conveying authority to the mediator is a major decision based on three principles: trust, trust and trust! I am
quite wary about conveying ultimate authority to a mediator unless I have an established rapport with him or her. If
either party commits too early, it can have huge repercussions on the overall process. Unfortunately, mediations are a
process somewhat similar to making wine. Time is a necessary prerequisite in order to achieve the goal.
Lenkov: Since I generally select mediators I know and trust,
I am confident that they will not misuse the authority by
giving up too much too soon. It is sometimes frustrating
to spend hours going back and forth, but like Lou said, the
ends justify the means.
Goodrich: What are your top three tips for a successful
mediation?
Judge Kelley: Do not be afraid of re-evaluating your position from time to time. Remain patient; let the mediator do
his or her job and let the process work. Choose the right
mediator for your case.
Cairo: My three tips revolve around preparation. Counsel
must prepare a solid, compelling submission brief with
photographs, jury instructions, deposition excerpts, medical reports, etc., to present at the mediation. It is equally
important to prepare the clients for the process and ensure
that they have reasonable expectations for the process. In
addition, mediators should do a reality check with opposing counsel so that they do the right thing for their client.
In many cases, a decent settlement is the right thing for the
client. All too often, cases get tried to fulfill the egos of counsel who want to score a big verdict or get a not guilty on a
case. In many of these same cases, however, eliminating the
risk, uncertainty and expense of trial through an amicable
settlement in mediation would have better served everyone’s
interests.
Lenkov: Be confident in the strengths of your case. Do not
fear walking away. Recognize your leverage and use it wisely.
Leverage is everything in negotiation!
Cairo: I feel the same way as Rich. Mediation is such a success because it allows the parties to express their views of
their case, make their big demands, proffer their defenses
and ultimately do what they can never do in a court room
— exercise control over their case. Once the case goes to
trial, all the uncertainty, risks, expenses, anxieties and fears
associated with a jury trial hit the litigants smack in the face.
Having tried a considerable number of cases, I can honestly
say that no litigant really wants to go to trial. And if you have
tried enough cases, you certainly know that it is not simply
all about the facts of your case when it comes to getting a
fair jury verdict. Attorneys are recognizing the benefits of
mediation over the risks of proceeding to trial.
Judge Kelley: More people have come to understand mediation and trust the process. There are a high percentage of
settlements — it is a tried and true dispute resolution method that achieves results. That is why mediation is such a success and will grow in importance in the years ahead. LM
Our Panel
Alex Goodrich is Vice President of ADR Systems’ Risk
Management Services. He has been involved on the client side
of ADR as well as working from the service provider side for
more than 20 years.
Hon. Daniel J. Kelley (Ret.) served 24 years as a circuit
court judge in Chicago where he was assigned to the commercial litigation and jury sections of the Law Division as well
as the felony trial section of the Criminal Division. Judge Kelley
has been a mediator and arbitrator since he retired from the
bench in 2008.
Rich Lenkov is an attorney with Bryce Downey & Lenkov. He
represents organizations ranging from Fortune 100 corporations to small businesses across the civil litigation spectrum.
He concentrates his practice in premises liability and personal
injury, along with workers’ compensation.
Louis Cairo is Senior Partner of Goldberg Weisman Cairo.
As a personal injury trial lawyer, his practice focuses on
construction negligence, product liability, trucking accident
fatalities, Federal Employer Liability Act cases, automobile
accidents, slip and falls and other types of catastrophic injuries
and general tort liability.
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Certified Litigation Management
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Alternative Fee Arrangements
Client Relations, Expectations
and Confidentiality
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Evaluation and Assessment,
Impact Reporting and Reserving
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Reserving and Data Management
from an Actuarial Perspective
Resolution Strategies
K
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K
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Management, AlixPartners, LLP
K
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Marriott International, Inc.
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Zurich North America
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Claim and Litigation Management Unit, Chubb
K
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Market Liability Claims, Liberty Mutual Group
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Best Practices, Chartis
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Consultant, XL Specialty Insurance Company
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Fireman’s Fund Insurance Company
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Chief Claims Officer, Arrowpoint Capital
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Enterprise Legal Services, Liberty Mutual Group
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Register today at www.theclm.org/lmi.
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Pay
Day
Get Your Legal Bill Approved and Paid Quickly
By Brian Brown and Paul D. Larimore
Y
ou’ve done a good job for your client. A great job, really — you
won the case and saved them a lot of money. You submit your bill
with the expectation that your client will gratefully pay for the outstanding service you’ve provided. Granted, you didn’t pay much
attention to the client’s billing guidelines, and you didn’t waste time
reviewing or editing your bill. After all, they are paying you to be a lawyer, not a
billing clerk, right? Your focus is on delivering quality representation and results.
That’s what the client really wants.
You are taken by surprise when your client rejects the bill.
But should you have been surprised? As a lawyer you take
pride in your communication skills, but what message did
you send when you submitted a sloppy bill that ignored your
client’s billing preferences?
Your fee bill is just one of many ways you communicate with
your client, and it merits the same care you put into an opinion letter or trial summary. Your bill is not just a summary of
charges — it is a crucial mode of communication that validates your professional skill in your client’s eyes.
Here are some suggestions that will help your bills send the
right message about your legal work — and why your client
should pay for it — so that they will be quickly approved and
paid in full.
1 Know the Rules — And Follow Them
Your client spent considerable time developing billing
guidelines, and they expect you to follow them. Many lawyers bill the same way for every client, assuming that since
most guidelines are similar, every bill will be mostly correct.
The problem with this approach is that every bill will also be
partly wrong.
Since each client’s billing requirements will be different from
another’s, it can certainly be a challenge to recall the distinctions. Have copies of all of your clients’ readily accessible.
Make notes that highlight and help you remember especially important requirements or unique characteristics.
2 Be Specific
You provide your client with regular case status updates,
but your bill is the only place where your client sees what
they are paying you to do for them on a daily basis. If your
time entries are so vague that the client can’t tell what you’ve
done — or more importantly, why they should pay for what
you’ve done — can you really expect them to pay the bill?
everything you’ve done than to submit a separate entry for
each activity.
Take a common example: “Travel to court, attend hearing,
meet with counsel, letter to client, 3.0 hours.” This lawyer
spent 3 hours on four activities, but how much of that time
was spent traveling? How long was the hearing? Did the letter take just a few minutes to draft or 2.5 hours? Your client
may also ask whether the sum of your activities truly took 3
hours, and whether your charges would have been less had
the activities been billed individually.
Your bill is not just a
summary of charges
— it is a crucial mode
of communication that
validates your professional
skill in your client’s eyes.
When you submit a blocked billing entry, it’s fair for your
client to assume you didn’t read their guidelines, or that
you don’t care about wasting their time by forcing them to
decipher your confusing bill. Assigning time to the separate
tasks you’ve performed will alleviate client confusion — and
will avoid your client’s dreaded red pen.
4 Use the Minimum Billable Unit
Nearly all modern billing guidelines set the minimum unit for
billing at one-tenth of an hour. Although that number sounds
small, many receipt/review activities and phone calls take less
than six minutes, so most bills have at least a few .1 entries.
Entries like “phone call” or even “phone call with client” are
too vague. If you want to be paid for an activity, you should
specifically explain what you did and with whom. An essay
isn’t necessary, but you do have to include the key data —
who, what and why —for each activity.
Before you submit a bill without any .1 entries, ask yourself
a couple of questions:
When you submit a bill with vacuous line items like “File
Review” without any additional detail, the message you
send to your client is that you don’t feel the need to tell them
everything you do. You shouldn’t be surprised if they don’t
feel the need to pay for everything you do.
u If not, are you just slower than everyone else, or does your
computer lack a .1 key?
3 Be Distinct
“Block billing” is the practice of lumping several billable
activities into a single time entry. It’s prohibited by virtually all client billing guidelines. So why do lawyers keep
doing it? Because it’s easier to submit one entry that records
u Did each action you billed for really take more than six
minutes for you to accomplish?
If you rarely or never use the minimum billable unit, it will
raise a red flag. Your client may even suspect that if the
smallest activity is billed at .2 or more, then the larger activities may be padded as well.
The minimum billable unit can be overused as well as underused. Some billers have hit upon the idea of “unbundling”
their billing into multiple tasks, such as reviewing five
documents to prepare for a deposition and billing each at
.1, even though reviewing all five took only 15 minutes.
This practice has been called “malicious compliance” by one
observer, and if done intentionally may be viewed as unethical.
5 Bill Support Functions Appropriately
Twenty years ago only the largest firms employed paralegals.
The situation is now reversed — most firms have a paralegal
staff, and most clients’ billing policies anticipate a paralegal’s
availability to efficiently and cost-effectively perform work
under attorney oversight.
Paralegal rate activities usually include drafting routine
subpoenas and notices, indexing, standard discovery,
Shepardizing, cite-checking references to case law, statutes
and regulations, preparing page-line summaries of deposi-
The goal is for your bill
to be clear, compliant,
detailed and accurate.
And, of course, paid.
tions, and organizing trial binders. Of course, there is no
rule that says your law firm has to employ a paralegal, but
understand that paralegal-rate activity does not become
lawyer-rate activity just because a lawyer does it. Expect to
be paid at paralegal rates for these types of tasks.
There are also some tasks that just can’t be billed for, whether by an attorney or a paralegal. Many clerical and administrative activities constitute overhead and are considered
part of the hourly fee structure. You don’t need a long list
of what activities are considered clerical, though. One key
question will tell you whether a particular activity is billable:
Is legal training or skill necessary to complete the task? If
the answer is yes, the activity is billable. If the answer is no,
no matter how necessary the task may be, no professional
should bill for it.
6 Bill for Lawyer’s Time Appropriately
“A lawyer’s time is his stock in trade.” So goes the mantra that
senior partners have hectored associates with since the first
law firm was founded. Your business depends on you being
fairly paid for the time you spend on your client’s behalf, and
your bill should contain every hour that was reasonable and
necessary. Here, though, are a few caveats:
u Multiple attendances: Most billing guidelines allow more
than one biller at an event only if the client approves in
advance. If you need your associate or paralegal at a trial
or deposition with you, make sure you get permission —
and make sure that permission is reflected in your invoice.
u Inter-office conferences: In general, conferences are billable only where the specific expertise of another attorney
is utilized to advance the litigation in an efficient and
cost-effective manner. Make sure your description provides sufficient detail to demonstrate that the in-firm
discussion is not administrative, instructional or supervisory in nature.
u Clients understand that sometimes your partners or associates will have to cover for you, but time spent getting a
“pinch hitting” lawyer up to speed on the entire file (unless
the use of another lawyer is at the client’s request) is a law
firm expense and should not be billed to the client.
7 Review Your Bill Before Sending It
Your bill should be in fairly good shape if you follow these
suggestions as you record your time. But that doesn’t mean
it’s ready to send out. You don’t send letters or other key
forms of communication without proofreading them. Why
should this crucial piece of communication be any different?
A basic edit before submitting the bill will catch common
mistakes like double billing. This is almost never intentional,
but creates a headache for the client while simultaneously
making the lawyer look unprofessional. Your editing process can also serve as a final opportunity to ensure your bill
fully complies with the client’s billing requirements.
Practicing law is a client-centered activity, and you should
treat your legal services invoice as an important form of client communication. In fact, it may be the only piece of communication that gives the client a full picture of what you
did on the client’s behalf to achieve a result.
The goal is for your bill to be clear, compliant, detailed and
accurate. And, of course, paid. LM
Brian Brown is a Senior Litigation Attorney with Missouri Employers
Mutual Insurance Company. Paul D. Larimore is a Program Director
with Stuart Maue, a legal expense management firm.
| WHAT’s At Risk|
Reputational Risk:
Are You Protected
G
By Patricia Kagerer
rowing up in El Paso, Texas, I often referred
to the social aspect of the city as a fish bowl.
Everyone knew everyone. Even though
El Paso has more than 800,000 residents,
the business community always felt like a
much smaller town. My mother always told me to “never
burn a bridge.” Mom’s advice served me well throughout
the years by protecting my personal reputation as well as
my professional one.
Corporations have a similar risk when it comes to protecting
maintaining and developing their own unique brand image.
Just a decade ago, when a catastrophic or public interest event
occurred, corporations had to worry about what would be on
the evening news and in the newspaper. Now, however, the
stakes are much higher. Through the advances of technology,
every bystander is a videographer — and every video can be
posted to the Internet in seconds. The voice and opinions of
any community member can reach potentially millions of
people with a simple tweet or a Facebook post. The evening
news has taken a back seat to what is communicated via social
networking channels.
A public obsession with news combined with advanced technology has created a big risk for corporations, both large and
small. The public is not fond of cheaters, supporters of sweatshops, safety violators or environment polluters. At the same
time, the public simply cannot get enough of a good story.
Learn from Others
In the last couple of years, we have witnessed the demise of
companies and individuals due to missteps in communica-
tion and poor public perception on how they have responded and handled difficult events. Take a look at BP, Toyota,
Goldman Sachs and Tiger Woods. All were instantaneously
judged — fairly or unfairly — on their actions and responses (or lack of) to the scandal affecting them. Taking a quick
glance at these examples, we are reminded that it takes years
to build up brand recognition and reputation and just a split
second to destroy it.
Most risk management professionals complete comprehensive assessments to determine the risk exposure to a company.
We focus on third-party liability risk, property, auto, human
capital, etc. Yet how corporations handle and respond to any
event that is made public has the potential to make or break a
company. According to Brandt D. Beal, CEO of the Gibraltar
Group, “Reputation is a company’s greatest asset and has the
potential to be a company’s greatest liability. Often middle
market and national accounts do not have a specific brand
management component in place.” As a result, Gibraltar partnered with Blake D. Lewis of Lewis Public Relations to ensure
that reputational risk is incorporated and addressed as part of
an overall comprehensive risk assessment.
Beal explains, “Many risk managers are cerebral. They think dollars and cents, tangible assets and liabilities. They plan for their
exit strategy and crisis management after a loss. They know their
crisis management procedures like the back of their hand. Yet the
exit strategy for what to do to (protect the image of a company
after a reputational risk event) is difficult to quantify.”
In the past, silence was often considered the best option. In
today’s social media-crazed world, silence may be the ruin
of a company. Risk managers must create a plan for how to
get out in front of a bad rumor and how to tell and control
their story. Lewis recommends that companies establish an
image protection team comprised of leaders in several key
disciplines who can address the who, what, when, where, why
and how of navigating away from potential reputation risk
and addressing head on any identified real or potential image
issue. He recommends that the team have expertise related to
operational, facilities, community, financial and legal knowledge. Just as in any safety and risk management plan senior
leadership must buy in and be accountable for creating, connecting and supporting the program.
Step by Step
There are three key steps to being handling reputational risks.
Step 1: Assess and Prepare — Similar to a risk and
safety assessment, the assessment and preparation for reputational risk must address intangible costs related to potential
risk exposure. Reputation management is largely based on
the ability to anticipate the types of incidents the organization
may sustain that would call their ethics and values in question. It begins with identifying what events could cause harm
to customers, employees, suppliers or neighbors. The harm
could come from events such as supply chain failure in products or services, safety violations or injuries, environmental
concerns or employee dishonesty just to name a few.
Step 2: Implement — Utilizing the image protection team
to review the risk analysis and corrective measures taken to
proactively create a working image protection plan is key. The
goal is create an accurate document that is measured in quality not quantity. For years the philosophy was that the more
pages a crisis management plan contained, the more prepared
a company would be. The reality is that a clear, concise, welldefined plan that is communicated and practiced well in
advance of any crisis is essential. Periodic review, actual drills
and training are critical to enhance the quality and value of
the plan in the future.
Step 3: Establish Cultural Awareness — The entire
organization must be aware of the importance of image protection to the organization. All employees can provide an
early warning for the potential issues or crises that can derail
a company. Employees can either enhance or detract for the
reputation management initiatives. Culture does not happen
overnight. It requires a clear definition of core values and a
commitment to walking the talk. This leads to an overall commitment from everyone in the organization to do the next
right thing.
Risk Transfer Options
Prevention and planning for potential reputational risk exposure is of paramount importance in this day and age. Also
addressing the loss exposure when things do occur through
risk transfer techniques is important as well. Beal recommends discussing reputational risk transfer options at length
with your insurance broker. “There are many ways to manage
this exposure in the insurance market today. Some are costeffective. For example, adding a reputational risk endorsement
to the first layer umbrella coverage can provide coverage for
managing the reputational exposure that is often overlooked.”
It is important to determine the potential exposure that can
be catastrophic and make an educated business decision as to
how your organization wants to handle the exposure.
Seventy percent of companies that have reputational catastrophe are not in business two years later. Have a plan. Share
it with key team members. And most, importantly, don’t
create it, stick it in a binder and then never look at it again.
Make sure you review it regularly. Every time there is a
national crisis, pull out your own plan. Go through it, using
the crisis currently being played out to determine if anything needs to be re-evaluated. Learn from the experiences
of others. Having a plan that is a living document will ensure
that it is always relevant, which will help you not become
part of the 70 percent. LM
Patricia Kagerer is the Vice President of Risk and Safety Management for
CF Jordan Construction, a Texas-based construction company.
the alternative |
AFA
Budgeting for Alternative Fee
Arrangements under Complex Matters
By James A. Loeffler and Ernest Aliseda
T
he myth persists that alternative fee arrangements (AFAs) cannot be used for complex
matters. Certainly, the prevailing association
of AFAs with flat-fees precludes clients and
firms from introducing unfamiliar managerial mechanisms into matters that present in a complex manner. One of the challenges is how to successfully budget for
the dynamics of a risk collar, holdback-bonus or other such
AFA. When properly aligned with effective early case assessment and a clear, mutually agreed-upon win, AFA budgets
are a powerful tool.
and counsel can also envision an $800,000 settlement within
a year. See Table 1 below.
Effective early case assessment is paramount. The client and
counsel must collaborate by examining prior similar cases
for approach and strategy, evaluating all known facts and
researching prior rulings. This not only helps to identify
phase objectives, but also adds credibility to the win definition. It also provides the tools and data necessary to measure
progress and track successful strategies and solutions. More
importantly, it allows for more predictability from both the
client’s and firm’s perspective.
For example, consider a holdback-bonus AFA for a complex
matter whose exposure is $5 million — clearly not a flat fee
Two components critical to any win definition are settlement
proposition. The client withholds 20 percent of the firm’s
amount and matter duration. Specific values for each should
billings (on a reduced-rate basis). If the firm achieves mutube the result of early case assessment, and the firm should
ally agreed-upon objectives, the client will pay the remainbe incented for achieving positive results for both. Mutually
ing 20 percent plus a bonus for superior results. Properly
agreed-upon objectives or success points could be defined in
structuring this AFA incents the law firm to bring the litivarious ways. In the example, the client and counsel expect
gation to a swift and favorable conTable 1 Settlement Scenarios
clusion and provides the client with
Expected
SettlementSettlementDuration Expected
cost reduction and predictability.
Early case assessment yields three
scenarios. On the low end, an opportunity exists to settle the matter for
$200,000 within six months. On
the high end, the matter is expected
to settle for $2.5 million after 18
months, just prior to trial. The client
Scenario Probability Amount Amount (months)Duration
High
25%
$2,500,000
$625,000
18
4.5
Medium
30%
$800,000
$240,000
12
3.6
Low
45%$200,000
$90,000
6
2.7
Expected settlement
and case duration
100%
$955,000
10.8
to settle the matter for $955,000 within 11 months. The firm
will receive a bonus if it settles for less within that timeframe,
or sooner. Another possibility is a higher settlement within a
shorter timeframe, but this additional cost must be weighed
against the cost to defend. The client is interested in total litigation cost, not just the cost of and time to settlement. Just as
the firm is incented on the win, it should also be rewarded
for optimizing defense costs toward achieving that win. The
performance bonus can be given throughout different phases
during the litigation. An accurate budget will help achieve
this goal by aligning overall strategy, phase objectives and
resources. It will also allow the client to make an informed
decision tailored to its business prerogatives.
The parties should price hours (at AFA-reduced rates),
expenses and third party costs across the following phases,
as applicable:
1 Pleadings and Motions
2Discovery
3 Pre-Trial Motions, Submissions and Trial Preparation
4Trial
Each applicable phase should be budgeted with the objective of
increasing settlement leverage at minimal cost. Given all information known at this point, it is logical to assume that nearterm tasks and activities involving pleadings and motions can
be budgeted with more accuracy than future efforts in pre-trial
motions and submissions. Because the near-term will inform
the long-term, the budget should be revisited every 90 days or
so to measure matter progress and cost.
Assume that as a result of the early case assessment, the parties set the overall budget at $300,000. This covers the next
11 months, as shown below, with the budget represented by
the gray line:
This budget should be divided into a series of 90-day
forecasts, each with its own dynamics and objectives.
Each forecast should be aligned with a clear expectation of increased settlement leverage. For example, the
first three months are forecasted in detail (in blue). The
parties must decide how much of the budget should be
spent here, by applying holdback rates to hours, estimating expenses and third party costs for those tasks and
activities deemed necessary for achieving objectives. For
example, if depositions play a big factor in the costs of
litigation, the firm and the client should identify which
depositions might be critical in achieving the desired
result at lower costs, and options involving other witnesses. At the end of May, the client and counsel should
evaluate the following:
u Level of settlement leverage achieved
u Actual cost of achieving that leverage
u Whether that cost is under or over budget
u Whether the path to settlement has significantly changed
course and why
u Whether the overall budget should be altered based on
new or unforeseen circumstances
Note that any changes to the overall budget should be
rare if early case assessment was conducted properly.
The firm receives a bonus if it comes in under budget; it
splits the loss with the client if total costs are over budget.
Accordingly, both the client’s and the firm’s interests are
fully aligned. Future quarters would be addressed in the
same manner.
Defense Budget
AFA Holdback-Bonus
Win: Settle for less than $995k within 11 months
Total Defense & Third Party Costs ($000)
$45
$40
$35
$30
$25
$20
$15
$10
$5
$0
3/31/2012
6/30/2012
9/30/2012
Detailed forecast
Budget Based on ECA
Forecast checkpoint and AFA holdback/bonus evaluation
12/31/2012
Applying an AFA to a complex case can
result in greater predictability and a mutually beneficial opportunity for the client and
the firm. Effective early case assessment, a
clearly-defined win and active budget and
forecast management are critical. Incentives
can be built in for achieving desired objectives, thereby allowing the client to obtain a
desired result in a timely and efficient manner. In turn, the law firm will be rewarded
for sharing the risk of a potential unfavorable
outcome and in securing a good result. LM
James A. Loeffler, CPA, CFE, Certified Six Sigma Black
Belt, is President of LegalEye Inc., a legal management
software and consulting company. Ernest Aliseda,
Board Certified, Personal Injury Trial Law, Texas
Board of Legal Specialization and Certified Litigation
Management Professional, is Managing Attorney for
Fred Loya Insurance.
the alternative |
aDR
A Win-Win
Strategy
Embracing Planned
Early Dispute Resolutions
By Deborah Masucci and
Abbie Eliasberg Fuchs
E
ffective litigation management programs
include strategies for managing disputes that
reduce legal expenses without compromising the outcome. The overall strategy values a
partnership between a lawyer and the client to
meet the client’s business objectives in tandem with obtaining a favorable resolution.
Settlement discussions frequently take place late in the life
cycle of a case after lawyers engage in adversarial jousting.
The result can frequently deteriorate the parties’ relationship
and end potentially profitable future business endeavors.
Litigation management strategies can alleviate this problem,
while simultaneously monitoring other relevant issues, such
as costs and settlement options.
Among the perceived impediments to using early dispute
resolution litigation management strategies are the reputation trial lawyers have for enjoying the tactics and the atmosphere of litigation, along with the accompanying concern
that the suggestion of settlement negotiations is a sign of
weakness. However, today most lawyers, their clients and
litigation management professionals are seeking a more
constructive and cost-effective path to achieving a favorable
resolution that leverages trial lawyers’ skills and advances
settlement without signaling weakness.
Planned Early Dispute Resolution (PEDR) assesses the benefits and risks of negotiation and considers which dispute
resolution tool will produce the best outcome. A cornerstone of the concept is communicating both a willingness to
settle, as well as to litigate, if necessary. The strategy focuses
on early planning with more client involvement.
PEDR starts with early case assessment, consisting of internal assessment and discussion. Key facts about the dispute
are collected and the business goals and concerns are determined. A team is created to consider a legal and resolution
cost/benefit analysis. The team creates a preliminary litigation plan covering settlement strategy, value and proposed
paths, including whether to consider alternative dispute resolution (ADR) techniques such as mediation or arbitration.
An example of where PEDR can assist is discovery — notoriously one of the most expensive parts of litigation. Under
a PEDR process, the team identifies documents or information required to proceed and assesses alternatives to secure
the information short of engaging in protracted discovery or
motion practice. For example, the parties may hire an independent site inspector to secure information at a lower cost
rather than obtain the same information through interrogatories. Additionally, the parties might agree to a stand still
agreement so that certain information can be exchanged
and negotiations commenced.
Another early settlement option to consider at this juncture is settlement counsel. Detractors say that engaging
settlement counsel is an expensive approach with limited
applicability. Supporters counter that engaging settlement
counsel for a limited period and purpose seizes a settlement
opportunity. Further, supporters note that there are returns
to scale — if engaged for a stream of cases, there is a built
in benchmark already in place to support settlement offers.
Regardless of whether settlement counsel is employed, or
the trial lawyer commences negotiations, assessing settlement at an early stage must involve a consideration of what
a settlement seeks to achieve. Fundamentally, litigation can
either settle, whether through negotiation or ADR, or proceed to trial, and the best outcome must balance competing
interests. On the one hand, trials are expensive, as legal fees,
expert fees and other costs continue to accrue. An important consideration in balancing these costs must involve
an assessment of the long-term effects of a settlement. For
instance, in a one-off case where similar litigation is unlikely
to follow, settlement may prevent incurrence of trial costs.
However, where a particular case may be the start of an
incoming line of similar actions, settlement value must be
monitored to avoid setting dangerous precedent of expressing a willingness not to fight.
Similarly, lawyers or others engaging in settlement negotiations must consider the true settlement value of a claim.
While the parties will frequently disagree over the true value of a case, a case is worth what an adversary will accept.
Although unreasonable, such valuation may ultimately be
the cost necessary to avoid further litigation. The important
point is that when engaging in settlement negotiations, it is
crucial to consider the big picture and not to evaluate costs
in a vacuum of the single claim or one party’s own valuation.
Another option the team might consider is engaging a
mediator to assist the parties in managing a large complex
case. The mediator convenes the parties and discusses the
dispute, offering case management suggestions. Engaging a
mediator can reduce adversarial tension, reassure the parties about the fairness of the process, manage procedural
issues before the ultimate dispute resolution process and
allows both parties to share the case management costs.
Before hiring settlement counsel, a mediator or an arbitrator, know the strengths and weaknesses of the individual
you intend to hire. Smart litigation management professionals have a list of ADR professionals, the types of cases
they handle, their approach to dispute resolution and their
strengths and weaknesses.
Though PEDR is a viable option, there are many reasons
some trial lawyers do not recommend these approaches.
They may be concerned about the client losing confidence
in the lawyer, loss of income or simply appearing weak.
Lawyers can overcome these fears by reassuring the client
that the lawyer is a strong advocate working in the client’s
best interest. Lawyers can also discuss the benefits of PEDR
with the client. Additionally, help the client understand that
the up front costs of early case assessment will reduce the
overall litigation management costs. Further, give clients a
choice of billing systems.
Though it is crucial to convince the client about the benefits
of PEDR, it is equally important to convince opposing counsel that PEDR is an effective strategy while maintaining that
the attorney is still a forceful advocate for the client. Start by
developing a personal relationship with opposing counsel.
Offer the other side the option of proceeding down an easier
path or doing it the hard way. The lawyer should express a
preference for the easy way, but continue to communicate
that the difficult path is an option if necessary. With these
strategies, PEDR can be an effective tool in reducing costs
and settlement amounts, while remaining a helpful dispute
resolution tool for all parties involved. LM
Deborah Masucci is a Vice President in the Office of Dispute Resolution
for Chartis. Abbie Eliasberg Fuchs is a member of Harris Beach.
ounce of prevention |
Fraud
The Ethical
Investigation of Claims
The Attorney Perspective
By Matthew J. Smith and Frank T. Zeigon
I
n reality is there is very little material to guide an
insurance law attorney specializing in fraud investigation along the correct pathway of ethical considerations. Though times have changed, insurance
fraud law practitioners universally confront the same
ethical dilemmas and with sparse guidance. These dilemmas
manifest themselves in various contexts including claim
analysis, dealing with unrepresented parties, examinations
under oath and rendering opinions to insurance carriers.
To protect the integrity and vitality of both the insurance
and legal professions, it is increasingly necessary to ensure
adherence to a high standard of ethical conduct. Ethical
guidelines not only promote a strong business model, but
also provide crucial safeguards against liability in potential
bad-faith claims.
Ethical considerations often arise in first-party claim investigations as a consequence of a lawyer’s natural inclinations
to advance the insurer’s interests. Though attorneys often
take the approach it is their job to win for clients, victory
cannot come at any cost. An insurance company owes a
fiduciary duty to investigate the claim fairly and impartially and to pay the claim unless there is sufficient evidence
to support a denial. This is especially true as courts routinely consider insurance policies inherently unfair to the
insured because the consumer cannot truly bargain for the
terms and conditions of the policy outside basic parameters. Attorneys who view an investigation as an opportunity to win for the insurance company and thus primarily
pursue evidence for the claim’s denial, violate professional
ethics because such activity compromises the carrier’s duty
to its insured. An attorney who analyzes claims on this
basis is not serving his or her client’s best interests and is
likely violating ethical standards.
Law firms handling insurance claim investigations must
remember attorneys are ethically responsible for ensuring
a proper and thorough investigation occurs in a forthright
manner and all evidence is considered fairly and completely.
The duty the attorney owes to the insurance carrier is to
make certain a proper and thorough investigation is done
so an informed and correct decision will be made. This
requires providing advice to the insurance carrier regarding how to proceed with a fair and impartial investigation.
Generally, this requires an insured be given every opportunity to document his or her claim and present their claim
fully and completely under the policy terms. This practice
will help avoid later allegations the attorney was not providing independent legal advice but was actually adjusting the
claim as an agent of the insurer. Attorneys who are not careful in drawing this line may find themselves embroiled in a
subsequent bad faith claim.
Unrepresented Claimants
Dealing with unrepresented parties frequently creates ethics concerns for an insurance attorney and firms should
take care to properly apprise unrepresented parties of their
right to counsel. Claimants are often not represented by
legal counsel, especially during the early phases of the
investigation. Under these circumstances, communication
with the claimant presents perhaps the greatest cause for
ethical concern. Attorneys should identify any duty they
or the insurer has to provide the claimant status reports
of the investigation process and what duties the unrepresented person may have to assist the investigation.
Communication with the insured should be in writing and
clearly notify the insured that the attorney represents only
the insurance carrier’s interests. There is no privilege associated with any communications between the attorney and
the claimant and often poorly written or overly aggressive
communications may be the subject of evidence of bad
faith should the claim become litigated.
Ethical considerations arise from striking a balance
between simply gathering factual data and the need to
confront the insured with key facts of the loss investigation. Unrepresented claimants are uniquely susceptible
to later alleging they were mistreated or taken advantage
of by the insurance company lawyer. The purpose of the
Examination Under Oath is to gather all relevant data for
the claim’s investigation and secure the truth though relevant testimony. Every claims person and attorney should
be cautious to avoid jumping to a conclusion of fraud.
Such responsibility is balanced by the duty an attorney
has to push questioning to the acceptable limit to obtain
information or even a confession from the claimant when
necessary.
When the Examination Under Oath is done properly, the
court reporter’s transcript is your best friend to combat
ethical allegations provided the lawyer strikes the proper
probative balance during questioning. To protect both the
insurer and the attorney it is vital to consider each word said
is potentially the basis for a bad faith claim against the insurance carrier.
Legal Opinions
Ethical considerations also arise when the insurer requests
a final legal opinion regarding acceptance or denial of the
claim. Attorneys must make certain to not allow their own
thoughts and opinions regarding the claimant or the loss
to cloud their ability to provide independent counsel to
the carrier. Some questionable claims should be paid even
when strong concern or doubt regarding the claimant or
the loss remain.
One of the worst things an attorney can do from an ethical perspective is to continue to defend his or her opinion
to the insurance carrier when existing or new evidence
comes to light that should cause the attorney to change his
or her opinion. Most states recognize an ongoing duty of
good faith in both the claim and litigation process. The goal
should be to make a proper decision regarding the claim at
any phase. Sticking to a position that is wrong or incorrect
will likely lead to a substantial bad faith punitive damage
award, which is certainly no way to build a future attorneyclient relationship.
Attorneys who handle insurance claim investigations are
ethically responsible for making certain a proper and thorough investigation of the claim is conducted fairly and completely. Adhering to ethical principles is essential for keeping these professions in high regard and protecting against
potential bad faith litigation. LM
Matthew J. Smith, Esq. is the founder and President of Smith, Rolfes
& Skavdahl Company, L.P.A. an insurance services law firm based in
Cincinnati. Frank T. Zeigon RPA CCLA PLCS CLCS PCLA FCLA, is
Commercial Property Claim Manager for CNA Financial Corporation.
Ian D. Mitchell is Editor-in-Chief of the Northern Kentucky Law Review,
Salmon P. Chase College of Law and a law clerk for Smith, Rolfes &
Skavdahl Company, L.P.A.
Mini Conferences
Maximum Learning
Throughout 2012, the CLM will
present a series of topic-specific
mini-conferences. Each conference is
a valuable educational and networking
opportunity. Mini-conferences are
scheduled the day after free, local
CLM events, so participants can
maximize their time. CLE and CE
credits are provided.
Registration fees for each
mini-conference are $49 for Fellows
and $99 for Members.
To learn more, visit
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save the dates
Date
Location
Topic
June 8
Columbus, OH
Workers’ Compensation
June 15
Dallas
Transportation
July 13
Chicago
Professional Liability
Sept. 14
Boston
Insurance Bad Faith and Coverage
Sept. 21
Philadelphia
ADR/AFA
Oct. 19
Orange City, CA
Insurance Fraud
Nov. 9
Nashville
Construction and Environmental
| Who Knew|
George Woolverton, Managing Partner of
Stockwell, Harris, Widom & Woolverton & Muehl
Get to know…
F
rom surfing to skiing to hitting up the
red carpet and the courtroom, George
Woolverton certainly lives a wellrounded life.
Q. Tell me about your childhood?
A. I grew up in Redondo Beach, Calif.,
and I’ve been surfing and skiing since
I was 12. I was on my high school surf
team. I also worked at Kinney shoes from
my junior year of high school to my second
year of law school. It was a commission
sales job, which taught me so much about
selling and customer service.
Q. Are you politically active?
A. I’ve been active in both parties my
whole life. When I was 9 I worked as a
volunteer in a governor’s race. I ran for
congress in 1986. I lost that race, but
have continued to be politically active. I
also chaired the California Fair Housing
Commission from 1999 to 2011. I was
first appointed to the Commission by
Governor Gray Davis. I learned a lot from
that position about discrimination and
equality. I was also recently appointed
to the California Insurance Guarantee
Association (CIGA) Board of Governors.
Outside of the courtroom, George Woolverton leads a full life skiing, surfing, being
politically active and keeping up with his wife Katrina’s singing career. The duo were
recently in London where Katrina opened for Annie Lennox.
Q. I hear your wife Katrina is a singer.
A. She started her career as a child. She was the Star
Search Junior Vocalist champion when she was 12. But
she left singing and decided to go to college and then
law school. After practicing law for several years, she
returned to singing and is now
doing really well. We were
recently in London where she
opened for Annie Lennox. She’s
tremendously talented. Check
her out at her website www.
katrinamusic.com.
Q. How did you two meet?
A. She used to work for one of my
competitors back when she was
practicing law. She was a friend of
the wife of one of the attorneys with
my firm. We met through them and
ran into each other off and on for
a few years. Then one night at a
retirement party, we started talking
more and things just clicked. We
got married in August of 2009.
| Who Knew|
Cindy Khin, Chief Claims Officer,
Medmarc Insurance Group
Get to know…
Q. How did you first get into the insurance industry?
A. My first job was as a clerk at an insurance agency that
handled personal lines and small business insurance. I was
a single mom going to college and working at the same
time. I loved the work right away and still love it. After that
first job, I went to GEICO where I handled personal line
claims. Then I moved to Medmarc, and have been here in a
variety of claims roles for the past 24 years.
I love claims work; it’s like putting together a puzzle.
Claims is not about getting the smallest settlement possible,
it’s about solving problems. I’m a problem solver, not a
problem identifier.
Q. How many children do you have?
A. I have one daughter and four grandchildren, who range
in age from 2 to 14 years old. They live just 15 miles from
me, so I get to spend time with them often. In fact, my whole
family lives in this same Northern Virginia area. I have three
sisters and they all live nearby, so every family gathering is a
large event.
Q. Did you grow up in Virginia?
A. Yes. I grew up in Manassas and went to Stonewall
Jackson High School — I’m a real Virginian! My dad was in
the Marines and worked at the Washington Navy Yard for
most of his career. My mom was a stay-at-home mom until
my youngest sister went to high school. Then she went back
to school and started a career in accounting.
Q. How do you spend your free time?
A. I’m a gym rat and have been forever. I go to the gym
every day. I lift weights with a trainer, work out on the
elliptical or take spin classes. I love the energy in the room
of a spin class. It’s a great way to start the day. I also love to
cycle outdoors. One day I hope to take several months off
work and cycle across the country. Right now, I’m considering
doing a ride with a friend from Seattle to San Francisco.
A self-described gym rat, Cindy Khin loves to be active and is
an avid cyclist. She one day hopes to cycle across the country.
I also love to camp. I’ve traveled to many places, including
Paris and Prague, but my favorite vacation is biking and
camping in Cape Hatteras. I always find myself going
back there.
Know someone we should interview for Who Knew? Send your suggestion to susan.wisbey-smith@theclm.org.
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Fighting Workers` Compensation Fraud

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