Litigation Management

LitigationManagement Magazine

summer 2011

Defining Litigation Management

It’s Not As Easy As It Sounds

is Litigation t a h W m e e nt ? g a n a M

What

Embracing

Metrics Matter

p. 22

Diversity

p. 34

p. 28

The Fallout from Japan p.

8

28

Diversity Today

Three different organizations offer a look into their approaches to diversity.

34

22

34

What Metrics Matter

Senior executives discuss what metrics they use to manage their business.

28

What is Litigation Management?

Industry experts weigh in to help craft a definition for the modern practice of litigation management.

contents |

summer 2011

DEPARTMENTS

in every issue

Specifically Speaking Fallout from Japan Additive Manufacturing Rewrites Rules Legislating the Meaning of “Occurrence” Impact of Proposed Hours of Service Rule Controlling Litigation through Account Instructions Extending Title VII Handling Section 1983 Claims Complying with Medicare’s Secondary Payer Act

8 10 12 13 14 16 18 20

ounce of Prevention Fighting Back Against Fraud Avoiding Bad Faith

37 38

Publisher’s Letter The Brief Events

5 6 7

Who Knew?

Kristin K. Seabrook, General Counsel, Pilot Flying J

45

Hamp Moody, Attorney at Law, Quilling, Selander, Lownds, Winslett & Moser, P.C.

46

The Alternative The Argument for ADR Managing AFA Expectations

40 42 LitigationManagement | 3

Claims Management with a

TWIST

NARS doesn’t provide cookie cutter claims management services. Our services stand out from the crowd with our combination of expertise, technology and customer service. NARS staff members specialize in specific industries. They don’t dabble from specialty to specialty, so you can be confident they understand your claims and will manage them to the best outcome possible.

We provide comprehensive claims management services for insurers, brokerages, managing general agencies, reinsurers, liquidation bureaus and self-insured funds. Regardless of the type of loss, our professionals manage your claims with quality you can trust.

Our Internet-based claims management system will keep you apprised of the progress of each and every claim. But we’re much more than some software and a computer screen. We believe in old-fashion customer service — the kind where you get to know your business partner and where you can build rapport and trust.

Let one of our exceptional staff members demonstrate for you our proprietary claims management system.

While we’re at it, we’ll also give you a free analysis of how NARS can save you money.

Contact Jamie Bernardo at 321-441-1336 or jbernardo@narisk.com.

Claims Management. Redefined.

LitigationManagement

publisher’s letTer

Summer 2011 Vol. 1, Issue 1

Welcome to the inaugural issue of Litigation Management.

I’ve long had a vision of creating a magazine that brings together the thought leadership of the incredibly talented and dedicated professionals who manage litigation — those working in-house, risk and insurance professionals, outside counsel and the third parties providing valuable services. This magazine does all that and more.

For all of you iPad, tablet and smartphone toting professionals, Litigation Management is also available in an electronic version. Simply go to the App Store and search for “Litigation Management.” You can download our app for free. The magazine app works on the iPad, iPhone and Android platforms.

Fitting for this inaugural issue, I want our magazine to our cover story explores how to define litigation management be a place to come for in today’s world. A simple “we manage lawsuits” might seem industry insight, for like the straight-forward answer, education and for articles but all of us in the industry know it’s much more than that. that make you think.

In the article and throughout the magazine, we delve into topics that explore specific claim types, trends in the industry, the impact of worldwide events on our industry and take some time to get to know a few of our colleagues.

When I first developed the idea of creating this magazine, I knew very little about magazine publishing. With a great deal of research, the assistance of some industry experts and more than a little help from my friends and colleagues, my vision is now a reality. Taking on this project is not unlike what many of you in the industry did when you first started down your career path. Let’s face it, not many kids focus on growing up to become involved with the litigation management industry. But those of us who do choose this career path realize what an exciting and dynamic field it is. Never a boring day and always plenty to do.

I want our magazine — and I say “our” because this magazine belongs not just to those of us working to put it together, but to all of our readers and advertisers — to be a place you come for industry insight, for education and for articles that make you think. You’ll find that every article is co-authored and developed with input from litigation managers and attorneys. This team effort allows us bring together different perspectives on each topic.

Publisher Adam Potter Managing Editor Susan Wisbey-Smith Art Director Stephanie Biddle

Advertising Direct all advertising inquiries to Adam Potter at adam.potter@continuelearn.com or 212-724-2345.

Editorial Direct all editorial inquiries to Susan Wisbey-Smith at susan@swizzlecommunications.com or 847-317-9103.

Reprints Direct all reprint requests to Adam Potter at adam.potter@continuelearn.com or 212-724-2345.

LitigationManagement is published quarterly and covers news and topics of interest to litigation management professionals and the attorneys with whom they work.

Copyright © 2011 by Continuelearn. 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 Continuelearn.

The views expressed in the articles are solely those of the authors and do not necessarily reflect the view or opinions of Continuelearn or the companies by whom the authors are employed.

I welcome your feedback on this inaugural issue and your ideas for topics you’d like to see us cover in future issues.

Adam Potter Publisher adam.potter@continuelearn.com LitigationManagement | 5

the brief

Survey Says The Council on Litigation Management’s comprehensive national litigation management study has been released. Conducted over a five-month period by Revere Advisory, the Study is believed to be largest study of its type ever conducted with data collected across 160 questions from 47 senior litigation executives.

Among the findings: Seventy-four percent of study participants rated the quality of their litigation metrics as “Fair,” “Poor” or “Very Poor” in terms of measuring the overall effectiveness of their programs. This represents a significant opportunity for improvement for the industry and for litigation executives generally.

When considering all the resources we have invested, I believe my organizations sees ~ _____ in return for every $1 we have invested. $10.35 Average

How effective are your metrics in measuring the effectiveness of your litigation management program?

74% rated their metrics as “fair” or worse 38% Fair 13% Very Effective

$2.75 Median

Respondents were also asked to quantify all aspects of the litigation management-related resources in which they have invested. They were then asked to quantify the financial return they are achieving. The median rate of return for all participants was $2.75 for each $1 invested, for an annualized return of 175%.

34% Poor

13% Effective 3% Very Poor

Read more about the study in the Fall 2011 issue of Litigation Management, scheduled for publication in late August. Request a copy of the study by writing to report@revereadvisory.com.

There’s an App for That!

LitigationManagement Magazine

is available in a digital version on your iPad, iPhone or Android device. Simply visit the app store and search for “Litigation Management.” You can download the app for FREE. The digital version allows you to easily click on the web links. You’ll also be automatically be notified every time a new issue is published so you’ll be sure to never miss an issue.

6 | LitigationManagement | summer 2011

Annualized Rate of Return of 175%

events June 9

Milwaukee 3 pm Marquette Law School 5 pm Brewers Game and Dinner

June 22

Dallas 3 pm Panel Discussion – Texas Rangers Stadium 5 pm Dinner and Rangers vs.

Astros Game

June 24

Omaha 3:30 pm Panel Discussion 6 pm College World Series

July 12

Minnesota 4 pm Entertaining Ethics Program 6 pm Networking Reception, Windows on Minnesota

July 14

Chicago 3 pm Education Program at CNA 6 pm Lake Michigan Boat Cruise

July 29 Cleveland

4 pm Dynamic Presentation, Progressive Field 6 pm Dinner and Indians Game

September 14

Hartford 2 pm Interactive Panel Discussion 4 pm Networking Cruise – Connecticut River

September 15

Boston 4 pm “Wow” Presentation 6 pm Spectacular Reception, Museum of Science

All events are free for CLM Members and Fellows. For more information or to register, visit litmgmt.org/events

Save The Date July 20

Denver 3:30 pm Women’s Forum and Education Program, Downtown Aquarium 6 pm Networking Event, Downtown Aquarium

March 28-30, 2012 Council on Litigation Management 2012 Annual Conference San Diego

LitigationManagement | 7

Specifically Speaking |

environmental

Fallout from

Japan

A Foreseeable, Yet Unforeseen, Catastrophe?

Some Lessons for the United States

By Joshua S. Lichtenstein and John T. Carty

T

he catastrophic events in Japan have created the world’s gravest nuclear crisis since Chernobyl 25 years ago. Although the full extent of the environmental damage may not be known for years, Japan is already experiencing a variety of potentially detrimental consequences — including heightened radiation levels detected in food supplies, in the Tokyo water supply and in the seawater near the Fukushima complex.

Could the Tokyo Electric Power Company (TEPCO) have been better prepared for this natural disaster? News articles have reported that TEPCO officials knowingly

8 | LitigationManagement | summer 2011

discounted the potential risk of, and the resulting damage from, a magnitude 9.0 earthquake and the resulting tsunami despite prior analysis that showed it was a real possibility. In a 2001 analysis of the Jogan tsunami that occurred in the year 869, scientists estimated that the Jogan tsunami caused waves as high as 26 feet to crash ashore only 25 miles north of where the Fukushima facility is situated. The 2001 analysis also documented two additional tsunamis comparable in size to Jogan that occurred within the past 3,000 years and consequently concluded that this reoccurrence interval of approximately 1,000 years and the passage of more than 1,100 years since the Jogan tsunami indicated that “the

possibility of a large tsunami striking the Sendai plain is high.” Yet a more recent TEPCO analysis postulated that the largest tsunami that could threaten the area of the Fukushima facility would not exceed 18 feet in height.

News reports have also indicated that TEPCO officials based their plant safety analysis on an assumption that the strongest earthquake that could strike the region would not exceed 8.6 in magnitude.

TEPCO’s assumption appears to have ignored known data documenting the occurrence of earthquakes at least 9.0 in magnitude within the past 50 years in subduction zones located in Chile, Indonesia and

Alaska, as well as data that the Fukushima facility is located within a similar subduction zone. If accurate, TEPCO’s apparent decision to exclude this historical data from its plant safety analysis probably prevented both TEPCO officials and Japanese nuclear safety regulators from being as fully prepared as they should have been.

In the United States, government regulators and the nuclear power industry should be focused on heeding the lessons of the crisis in Japan and immediately implementing some of those lessons learned. Although it would be understandable for the industry to focus a re-evaluation on the relative risks U.S. nuclear power facilities face from earthquakes and tsunamis, that would be the wrong lesson to derive from the recent disasters. The location of nuclear power facilities in the United States places them at substantially smaller risk for damage from a large earthquake and tsunami. But the Fukushima disaster has revealed substantial deficiencies in certain reactor designs that can be minimized. In light of the sheer number of U.S. nuclear facilities that are substantially similar, if not identical, to the design of the Fukushima facility, and given the advanced age of so many nuclear facilities currently operating in the United States, it is especially appropriate to engage in a comprehensive re-evaluation of the potential risks that these reactors present, the relative likelihood of those risks occurring, and the costs required to avoid or minimize those risks.

Reducing Risks

In addition to this comprehensive re-evaluation, the following concrete steps are similarly recommended in order to reduce the risk of an environmental catastrophe both in the short-term and the long-term: l Mandatory changeover from the use of spent fuel pools that rely on continuous cooling of water for efficacy to the more modern dry-cask method of spent-fuel storage that does not depend upon continuously-operational water-cooling systems for efficacy. At a minimum, the amount of time that spent fuel rods are stored in pools should be reduced, and, at the same time, the transfer of spent fuel rods from cooling pools to dry cask storage needs to be accelerated.

l Mandating immediate upgrades to existing facilities that will enable the critical safety functions of these facilities to operate normally for at least 48 hours in the event that the main power supply and the primary back-up power supply are interrupted.

The vast majority of reactors in the U.S. are currently designed to cope for only four hours — an amount of time that the current crisis in Japan has starkly revealed to be woefully inadequate. The Fukushima reactors were designed to cope for eight hours. l A comprehensive re-evaluation of the Price-Anderson Nuclear Industries Indemnity Act, including: (1) an examination of the relative sufficiency of the current level of financial contribution required of each nuclear facility owner; (2) an analysis of whether the Price-Anderson Act creates disincentives for the nuclear power industry to develop and implement the best-available safety features and to incorporate those features into the older facilities that are probably more vulnerable to failure; and (3) an evaluation of the extent to which removing a portion of the indemnity from liability that nuclear facility owners currently possess would encourage the development and incorporation of feasible safety features consistent with the state of the art.

The crisis in Japan presents countries around the world with an invaluable opportunity to evaluate and adjust current risk management tools and techniques in a manner that will increase safety incentives and improve safety strategies — thereby reducing the chance that such a catastrophe (or one even worse) might occur elsewhere. Given the advanced age of many nuclear reactors currently operating in the United States, government and industry leaders are urged to quickly seize this opportunity. LM Joshua S. Lichtenstein, Esq., is an attorney with O’Toole Fernandez Weiner Van Lieu. John T. Carty is Vice President of Claims and Risk Management for Berkley Environmental.

l Shortening the re-licensing period for existing facilities to 10 years. l As a condition of the re-licensing of existing facilities, regulators should mandate the retrofitting of all operating facilities with state-of-the-art safety features and impose a strict limitation on the percentage of costs associated with retrofitting that nuclear facility owners are authorized to pass on to consumers.

LitigationManagement | 9

Specifically Speaking |

products liability

Rewriting the Rules Additive Manufacturing Creates New Rules for Products Liability

A

By Ian Stewart and Terry Wohlers

new technology has the potential to rewrite the rules for how we think of product liability. Additive manufacturing, also known as 3-D printing, is the process of joining materials layer by layer to make objects from a 3-D model, as opposed to traditional subtractive manufacturing through the use of machining, turning, drilling, injection molding, casting, etc. A 3-D printer uses a computer file to make a series of horizontal cross-sectional slices to create the 3-D object.

rupts this traditional structure by blurring the roles of those in the traditional supply chain, and by potentially creating a role for the consumer in that chain. Traditional manufacturing typically involves a refined design process prior to manufacturing, followed by downstream efforts to market, distribute, sell and support the product.

Additive manufacturing upends this system by allowing everyday consumers to get involved in the design process. What’s more, almost anyone, located almost anywhere, can now become a manufacturer.

The technology was originally used to build prototypes, not finished products, but that is now changing. Today, additive manufacturing is used to create a wide array of products such as furniture, jewelry, home and personal accessories, automotive and aerospace parts, jigs, fixtures and tooling for manufacturing, hearing aids, orthopedic implants, and dental crowns and bridges. Machines currently in use can produce complex products with moving parts such as a clock or a gearbox without the need for assembly. They can produce products made of a wide range of plastics, composites, metals and alloys.

Consider the scenario of a small web-based company that sells an electronic design for a new product to an intermediary that changes the design and sells it to the ultimate con-

Additive manufacturing has proven to cut time and cost, reduce waste and promote innovation by removing barriers for entry to the market. Each product can be created individually so design changes are easily made from one “printing” to the next.

Open source product designs made available on the Internet allow consumers to download products, make changes if they wish and then print them.

Additive manufacturing has the potential to force changes to the product liability system, which is currently premised on the existence of a discrete chain of distribution that typically includes an identifiable product designer, manufacturer, distributor and retailer. Additive manufacturing dis10 | LitigationManagement | summer 2011

can undergo design changes with such a low level of cost and difficulty. Determining what warranties may attach to the product may also be a challenge with additive manufacturing. One may expect the upstream designer to disclaim any warranty for downstream design changes. In addition, there are significant implications for international product liability issues for product designs that can cross borders so easily.

Similar questions also arise from an insurance perspective. For example, how does one underwrite liability for the designer of an open source electronic design that may be changed at will once it leaves the designer’s control? Conversely, how does one underwrite liability for a company that pur-

The intellectual property implications are also important for those in the business of additive manufacturing. sumer, who then performs some additional “tweaks” to the design before printing it.

Under this scenario, who can properly be characterized as the designer, manufacturer or distributor of the product in the event of injury or loss? Where multiple persons can easily change the design, tracing the product’s design history may be difficult. Each distributor may also be difficult to identify for a product that can be bought and sold as easily as a smart phone application or MP3 music file. Conversely, the manufacturer may simply be the consumer who pushes print on a 3-D printing machine.

Additive manufacturing may also complicate the ability to prove the existence of a defect under traditional product liability principles. For example, how can one prove the expectations of an “ordinary” consumer when the design can be modified to fit the needs of each consumer individually?

Imagine the hurdles presented in trying to defend against an “alternative feasible design” theory when faced with a product that

chases and uses designs that may have undergone untested changes? Insurance companies will be faced with these questions as this new technology and market develops.

The intellectual property implications are also important for those in the business of additive manufacturing. Coupled with 3-D scanning and software tools, existing designs can be quickly and inexpensively modified and produced. For example, it has become surprisingly easy to put a person’s head and face on the body of a Barbie Doll, Mickey Mouse or a number of other well-recognized figures.

These novel questions must be answered by the manufacturing and insurance industries and, ultimately, by the courts. It is nevertheless clear that this new technology has arrived and our legal system will have to adapt. LM Ian Stewart is an attorney with Wilson Elser Moskowitz Edelman & Dicker in Los Angeles. Terry Wohlers is a consultant on additive manufacturing technology and the President of Wohlers Associates, Inc.

1-800-467-9181 www.keais.com

Records Retrieval, Our #1 Focus!

UNDER PRESSURE

to Save Time and Money?

KEAIS has been here all along. Think of us as the elephant in the room.

• Fast Turnaround Time • Responsive Team • Easy Ordering • Industry Leading Web Storage • Organized Bookmarked Records • Paperless Nurse Reviews • Nationwide Claims & Legal Expertise

Call Today to Get a Free ROI Analysis

Specifically Speaking |

construction

Legislating

the

Meaning of “Occurrence”

Why Can’t We Just Fight the Common Enemy?

By Jack Levy, Roy Leeds and Micaela Isler

R

ecent court decisions holding that construction defects do not constitute an “occurrence” under commercial general liability (CGL) policies have been met with legislative response in Colorado, South Carolina and Hawaii. Colorado’s legislation was passed into law, Hawaii’s legislation was deferred in its state Senate and the South Carolina bill passed the full Senate.

Industry groups for insurers and contractors have been opposing each other on these efforts, but because these two industries have channeled their energy into drawing lines in these debates, they have perhaps missed the opportunity to work together to defeat a common enemy — non-meritorious construction defect claims. Aside from the potential legal problems associated with legislating the meaning of insurance policy terms, it can’t be ignored that free market principles have and will continue to drive the insurance industry.

If construction defects are legislated to be covered under insurance policies, this will encourage more lawsuits.

When it becomes impracticable to write this risk in Colorado, South Carolina or wherever this kind of legislation may spread, contractors may be left alone to face a voraciously hungry plaintiffs’ bar.

The industry as a whole also needs to be more aggressive in defending some construction defect claims, even when settling them may be more cost effective. In the long run, settling those cases can lead to the filing of more cases as claimants see the company as an easy target.

In support of the bill in Hawaii, the Hawaiian Building Industry Association essentially argued that contractors have entered into contracts assuming that coverage exists for property damage resulting from construction defects, this risk is reflected in premiums and carriers had been providing coverage for such claims up until the Group Builders’ decision. The Hawaii Insurers Council opposed the bill as unnecessary and likely leading to additional market disruption and lawsuits. The Council was concerned that retroactive 12 | LitigationManagement | summer 2011

effect may not survive legal challenge and that the legislation intrudes on the prerogative of the judiciary by directing courts how to interpret policies. They also believe the free market responds to the needs of construction professionals — in fact, several insurers have already responded to the Group Builders decision by restoring coverage through endorsements While the Council’s concerns are legitimate, what is missing from the debate is any reference to the root cause of the problem — rampant, non-meritorious lawsuits against contractors by an organized, coverage savvy, plaintiff ’s bar. Insurance and contractor industry groups should use this opportunity to join forces, redefine the issues, and defeat this common foe.

The Texas Governor recently presented a package of civil justice reforms designed to discourage non-meritorious lawsuits and increase the efficiency of litigation. This includes imposing risk of cost on those who insist on pursuing frivolous lawsuits, providing for the prompt and fair resolution of lawsuits up to $100,000, so that litigants have a chance to have their cases resolved without excessive time and expense. The reforms also allow a pre-trial appeal of trial court rulings on issues of law that will determine the outcome of the lawsuit, rather than having the parties incur the expense and time of a full trial before the dispositive issues of law are resolved on appellate review.

For the good of the order, both insurance companies and contractors should unite and focus on treating the cause that has spurred these legislative enactments, rather than debating the symptoms. If this legislative trend continues, and if the underlying issues fail to be resolved, contractors and insurers alike will be in a world of hurt. LM Jack Levy is a shareholder with the Portland, Oregon, office of Smith, Freed & Eberhard, P.C. Micaela A. Isler is Regional Manager, State Government Relations for Property Casualty Insurers Association of America. Roy Leeds is Litigation Manager for Custard Insurance Adjusters.

Specifically Speaking |

transportation

On the Clock Proposed Hours of Service Rule Changes Put More Burdens on Commercial Drivers

T

By Kevin Foley, Nicole Norcia and AJ Sellers

he Federal Motor Carrier Safety Administration (FMSCA) is currently reviewing a proposed set of rule changes regarding Hours of Service (HOS), which will be issued in late July and go into effect several months later. While the stated reason behind the changes is to give drivers more flexibility, the proposed rules may have the unintended consequence of unnecessarily complicating driver logs and may lead to a reduction in hours.

One of the more controversial rule changes is the 34-hour restart timeframe, which restricts how a driver can use his or her time between a restart. Under the new rule, a driver must have two rest periods between midnight and 6 a.m. before restarting HOS..

This may have the unintended result of removing tractor trailors from the road at night and placing them on the road during the day when traffic is already heavy.

The mandatory midnight to 6 a.m. rest affects anyone with a workweek that begins before 6 a.m. For drivers who typically begin the workweek at 5 a.m., they would need to eliminate two days of their workweek or start the workday after 6 a.m. to comply with this new regulation.

This rule will also affect long haul drivers who will need to adjust their schedules and drive through the heavier traffic during the day or add extra evenings to their trip. For example, if a driver finishes work and arrives at a rest location on Monday at 1 a.m. he is penalized for beginning a 34-hour restart. If the rest break starts at 1 a.m., he will not have accumulated two consecutive midnight to 6 a.m. periods until Wednesday at 6 a.m. — 53 hours later.

Drivers can only use the restart provision once in 168 continuous hours (seven days).

They must designate which restart applies

if they have more than two, affecting how drivers account for their time after the restart. This can occur if the driver is at the end of the 70-hour cycle, uses a 34-hour restart, drives the next day and then uses another 34-hour restart.

The current proposed rules also allow a driver 11 hours of driving time after 10 consecutive hours off duty, but the FMCSA indicated they prefer to reduce it from 11 to 10 hours of driving time. This reduction in conjunction with the other changes will not only reduce the work day, but can also reduce a drivers’ work week.

attorneys can also use them as a separate cause of action directly against trucking companies that do not monitor their drivers’ logs when an accident is caused by fatigue. As a result, drivers and motor carriers must remain constantly vigilant in monitoring a driver’s on-duty, driving and off-duty time and record the same with precision and accuracy. LM Kevin Foley is a partner and Nicole Norcia is an associate at Reminger Co., a law firm with offices throughout Ohio and Kentucky. Athos J. Sellers, CDS, is the Director of Safety for Memphis-based Builders Transportation.

While the FMCSA’s says it is keeping the 14-hour rule, it effectively reduces it to 13 hours in a driving window by requiring one-hour rest break. The 14-hour driving window can be extended two times in a seven-day rolling period, but the 11- (or 10 hour if reduced) hour driving maximum remains. This simply means the driver can take a three-hour break instead of one-hour break if using the 16-hour window.

This proposal has the possibility of reducing a driver’s hours, increasing the number of drivers needed for comparable deliveries and ultimately increasing costs. If a driver makes a delivery and is unable to be relieved from all work responsibilities, he or she cannot use this time to satisfy the required break. The driver will then have to schedule the break either before or after arriving at the customer and further limit available work time.

These proposed changes will result in increased costs to trucking companies who will have to hire more drivers to comply with the new HOS regulations. Plaintiff

LitigationManagement | 13

Specifically Speaking |

workers’ compensation

Spell It Out Controlling Litigation through Account Instructions

I

By Rebecca A. Shafer and Nathan Hughes

f you don’t know what “account instructions” are you aren’t tion should be outlined. If a claimant is out of work for more than alone. Account instructions, also known as claim handling seven days, the claim may be referred to the medical advisor for instructions and special handling instructions, are written peer-to-peer discussion or phone contact. If there is an on-site ocinstructions to adjusters and claim offices specifying how cupational clinic, the adjuster should be aware of this. If a drug your claims must be handled. test is required at the on-site clinic, the Whether you have just changed your adjuster should follow up according to third party administrator (TPA) or are When it comes to client instructions. If the company has just not happy with the performance a not-for-profit return to work partner, investigations, spell of your current carrier, tuning up your mention it in the account instructions out the basics, including: claim handling instructions can make so adjusters understand implementayour claims run smoother. tion details. Include job descriptions as • Meaningful three-point contact on all an attachment in the instructions so adclaims within 24 hours A good set of claim handling instrucjusters can readily find them. tions should be very detailed. They • Recorded statement of the employee should include compliance with Best List every medical cost containment on all indemnity claims Practices for Worker’s Compensation. service. Specify medical intake pro• Written employee statements of how Also include the Best Practices for cedures. Identify what type of follow the injury occurred Litigation Management (either within up is needed on cases with triage. For • I

ndexing of the employee within the the instructions or as an addendum). instance, the triage nurse may recomfirst 14 days and every six months Specify who will select defense counmend self-care to an injured employee sel. Include how petitions, pleading, and the adjuster should follow up on the thereafter filings, etc. will be processed. Spell out • On-site investigations of serious injury suggested care. PPO Networks, physiyour right to select counsel. cal therapy and rehabilitation networks locations and subrogation possibilities should be listed in the account instrucYour account instructions should also • Copies of all investigation videos and tions so adjusters can identify the corclearly outline levels for settlement and reports sent to employer for review rect provider for employees. specify who should be notified for re• Who to notify if a claim is to be denied serve changes. State if subrogation is If you have parallel programs of wage to be handled by a special subrogation • Under what circumstances surveillance continuation, short-term and long-term is expected department. If the adjuster is also redisability, specify how that procedure sponsible for subrogation, it should be operates. Should indemnity payments stated. There may be additional chargstart after salary continuation ends? es for the use of special subrogation units; however, they may be Who will notify the adjuster that company-provided payments much more qualified to handle this type of recovery. Make sure to are being made? Coordination of these benefits is critical to avoid include that liens won’t be waived or compromised without your double-dipping. written consent. Before subrogation against your client is comThe lesson with account instructions? Put it all in writing. LM menced, have the adjuster contact you for approval.

Include in your instructions when an employee will be eligible for a transitional duty position. The time frame and contact informa-

Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc., is a national expert in the field of workers’ compensation. Nathan Hughes is the Manager of Risk and Claims for Safelite Glass.

Account instructions, also known as claim handling instructions and special handling instructions, are written instructions to adjusters and claim offices specifying how your claims must be handled.

14 | LitigationManagement | summer 2011

5IF 3JHIU 1BSUOFS GPS -JUJHBUJPO 4VQQPSU %SQUIRE#ONNECT 6IDEO#ONFERENCING

%SQUIRE6IEW

6IDEO $EPOSITION 3ERVICES

%SQUIRE3HARE

At Esquire we’ve brought together top professionals from across the litigation support industry to ensure we capture every element of our clients’ cases, then give them the tools to bring their arguments to life with maximum impact. We offer the widest range of litigation support services and software solutions in the country. The best people, innovative products and leading technology - that’s the Esquire Solutions difference.

WWW ESQUIRESOLUTIONS COM #/20/2!4% 3/,54)/.3

Specifically Speaking |

professional liability

Extending Title VII Unanimous Supreme Court Decision Announces Liability to Third Parties

By Rufus A. Jennings, John P. Morgenstern and Joe DePaul

T

he Supreme Court’s decision in Thompson v. North American Stainless, LP, held, for the first time, that an individual who has not engaged in any activity that would ordinarily be considered “protected” under Title VII still may maintain a claim under Title VII’s anti-retaliation provision as an “aggrieved person.” This case has the potential to change the face of employment litigation dramatically.

As background, Miriam Regalado and her fiancé, plaintiff Eric Thompson, both were employees of North American Stainless (NAS). In February 2003, the EEOC notified NAS that Regalado had filed a charge of gender discrimination. Three weeks later, her fiancé was fired. Subsequently, the plaintiff filed his own Charge of Discrimination with the EEOC, alleging that his termination was retaliation for Regalado’s complaint of discrimination.

The district court granted summary judgment, holding that Title VII does not permit third-party claims. After initially reversing, the Sixth Circuit affirmed this ruling. However, a unanimous Supreme Court reversed, holding that third parties can have standing to maintain claims for retaliation, even in the absence of their own protected activity.

First, the Court found that the plaintiff ’s termination would be considered retaliatory under the standard set forth in Burlington Northern v. White. Specifically, the Court held that “a reasonable worker might be dissuaded from engaging in protected activity if she knew that her fiancé would be fired.” However, the Court failed to set any bright-line standard as to the relationship between the parties and the level of reprisal required in order to implicate the Burlington Northern standard. The Court said, “We expect that firing a close family member will almost always meet the Burlington standard, and inflicting a milder reprisal on a mere acquaintance will almost never do so, but beyond that we are reluctant to generalize.”

The Court based its decision on the language of §2000e-5(f)(1), which states that “a civil action may be brought against the respondent named in the charge … by the person claiming to be aggrieved.” According to Justice Antonin Scalia, this section grants standing to a class of individuals far beyond those who have claimed to be victims of discrimination or harassment, or who have engaged in protected activity. Justice Scalia held that the text of Title VII did not limit the definition of “person to be aggrieved”

16 | LitigationManagement | summer 2011

to individuals who had, themselves, been the target of unlawful discrimination or harassment. Instead, the Court then held that, since plaintiff was an employee, and Title VII was enacted to protect employees, he was within the “zone of interests” of the statute.

Such a concept does not appear anywhere within the text of Title VII, and was not specifically defined by the Court.

In broadening the scope of Title VII to allow claims by individuals other than those whose claims are expressly permitted by the statute itself, the Court has opened the doors to a whole new class of lawsuits from friends and family members claiming to have been “aggrieved” by an employer’s actions. In order to protect themselves from this new class of claims, employers may be forced to take Draconian steps, including the strict enforcement of non-fraternization policies.

By prohibiting any and all personal, intimate relationships between co-workers, the result in Thompson could be avoided.

The Court also did not identify how this ruling would apply to other statutes. The Americans with Disabilities Act incorporates the enforcement procedures of Title VII, but seemingly limits such procedures to “any person alleging discrimination on the basis of disability in violation of any provision of this chapter.” The Family and Medical Leave Act permits only an “eligible employee” to maintain an action. The Fair Labor Standards Act limits recovery to “the employee or employees affected.” On the other hand, the Age Discrimination in Employment Act allows “any person aggrieved” to bring a civil action.

While this decision is likely to generate additional litigation under Employment Practices Liability Insurance policies, the message that must be taken by employers is the same. When an employee has made a good-faith claim of harassment or discrimination, regardless of the underlying merits, it is important to use additional care before engaging in any significant employment action. Make sure that supervisors have been trained to watch out for potential retaliation claims and that all employment decisions are properly supported by facts that will stand up if the decision is challenged.

While this is good practice under all circumstances, it is especially important when the spectre of litigation looms. LM Rufus A. Jennings, Esq. and John P. Morgenstern, Esq., are with the Philadelphiabased firm of Deasey, Mahoney, Valentini & North, Ltd. Joe DePaul is the Area Senior Vice President of Management and Professional Liability for Arthur J. Gallagher Risk Management Services, Inc.

Know the client.

Know the industry.

Know the law.

Legal Strategies. Business Solutions.

Introducing the attorneys of LeClairRyan.

330 strong with 240 dedicated to litigation.

What makes LeClairRyan different from other law firms? We not only understand the law, but we’ve also made it a point to understand the industries we serve. We’ve replaced the traditional law firm model of organizing a firm around common legal specialties with a model that groups attorneys from multiple practice areas and geographies together by the industries that we serve. This ensures our attorneys are more in tune with our clients’ needs and the business and legal issues they face.

INDUSTRIES WE SERVE Automotive

Energy

Manufacturing

Technology

Aviation

Entertainment

Media, Internet & E-Commerce

Telecommunications

Banking

Franchise

Pharmaceuticals & Life Sciences

Trucking & Transportation

Colleges & Universities

Healthcare

Real Estate

Wireless Telecommunications

Community Associations

Hospitality & Tourism

Retail

Construction

Insurance

Sports

CALIFORNIA

MASSACHUSETTS

NEW JERSEY

PENNSYLVANIA

CONNECTICUT

MICHIGAN

NEW YORK

VIRGINIA

LeClairRyan is a law firm providing business counsel and client representation in matters of corporate law and high-stakes litigation.

WASHINGTON, D.C.

W W W.LECL AIRRYAN.C OM

Specifically Speaking municipal

C

laims involving the alleged violation of an individual’s constitutional rights have become increasingly commonplace, resulting in more claims against municipalities and/or their employees. Section 1983 claims against a municipality or a public employee are not the same as a typical state law claim and should not be defended in the same manner. Civil rights claims differ significantly in the manner of pleading, standards of proof, available defenses and types of damages recoverable.

Section 1983 litigation can be costly to a municipality and/or its insurer because a prevailing plaintiff may be awarded attorney’s fees and costs. These claims can also be expensive to defend given the potentially extensive discovery and motion practice.

Therefore, it is important to properly evaluate them early to determine an appropriate resolution and defense strategy before mounting attorney’s fees and costs make the case too costly to pursue various options.

Congress provided the means for asserting violations of the U.S. Constitution through the Civil Rights Act of 1871. To establish a cause of action under Section 1983, the plaintiff must prove that the defendant while acting under color of state law deprived him or her of a right guaranteed in the U.S. Constitution or applicable Federal Law. There are several key issues to be aware of when assessing potential liability of defendants and determining litigation strategy.

First, vicarious liability and respondent superior are not at play in Section 1983 litigation. Plaintiff must prove that each named defendant violated his or her rights. For the governmental entity, the plaintiff must prove that a policy, practice or custom of the entity was the driving force resulting in the violation of the plaintiff ’s rights. For the individual defendants, the plaintiff must show that the named individual defendant’s actions violated the plaintiff ’s rights. Proving a civil rights violation by an individual police officer does not establish liability on the defendant officer’s employer. Given this, there may be conflicts between the entity and the 18 | LitigationManagement | summer 2011

Section 1983

Claim Not Your Typical State Law Claims

By Michael Delonay and William B. Oberts

ms

individual defendants, or between multiple individual defendants, requiring that separate defense counsel be retained for the defendants.

Second, Section 1983 claims are not state law negligence claims (although plaintiffs will usually plead state law claims in addition to the Section 1983 claims) and the standard of proof for the plaintiff is not negligence. Plaintiff must establish a violation in accordance with the standard of proof as set forth by the applicable case law.

This is a heightened standard that is different for, and specific to, the Constitutional right allegedly violated. Depending on the coverage provided, such allegations may raise coverage issues creating coverage conflicts that require retention of independent counsel by the insured(s).

Third, there are various immunities to which defendants are entitled depending on the specific allegations made by the plaintiff. In addition, individual defendants are entitled to “Qualified Immunity” from suit as long as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known. Any applicable immunity needs to be asserted as an affirmative defense and should be resolved as a matter of law via dispositive motion. Unlike dispositive motions in state court, motions based on immunity in Federal Court can be filed as soon as sufficient discovery is completed to establish the immunity as a viable defense.

Under 42 U.S.C. § 1988, a court has discretion to award the prevailing party (other than the United States) reasonable attorney’s fees and costs. Despite its neutral wording, the purpose of Section 1988 was to encourage meritorious civil rights litigation by allowing prevailing plaintiffs to obtain an award of attorney’s fees almost as a matter of course; however, prevailing defendants are not entitled to a recovery of attorney’s fees unless it is determined that the suit was frivolous. Therefore, the type of costs awarded to a prevailing party depends on whether the prevailing party is a plaintiff or defendant. Attorney’s fees and costs are often the largest dollar exposure in Section 1983 litigation and must be considered when evaluating the potential damage exposure in such cases.

While punitive damages are generally not allowed against governmental entities, they may

be awarded against individual defendants.

Punitive damages can represent a significant exposure in Section 1983 litigation that is difficult to assess where the cases involve such issues as excessive force, hot pursuits, and illegal searches and seizures. Because many policies exclude punitive damages and in some states punitive damages are not insurable, this raises potential coverage issues.

Those defending Section 1983 claims face mounting plaintiff ’s attorney’s fees and costs as well as significant attorney’s fees and expenses to defend the litigation. If a Section 1983 plaintiff prevails at trial, a municipal defendant could be responsible for a jury’s award for compensatory and punitive damages, plaintiff ’s “reasonable” attorney’s fees and costs, and attorney’s fees and costs of defending the litigation. Due to such exposure, a proper evaluation of the merits of the case and defense strategy must be implemented early.

Weighing the municipality’s potential exposure with the benefits of early settlement will always be considered. A Rule 68 Offer of Judgment is a good means to try to cap attorney’s fees and costs and force the plaintiff and his counsel to evaluate whether to proceed forward. Issuing an early Rule 68 offer or early settlement discussions are always options, but municipalities and/or their insurers must be cautious against establishing a pattern of settling claims that lack merit due to the expense of defending them.

Plaintiffs and their attorneys talk. If you are perceived as an easy target, that one cost-effective settlement could lead to 10 additional lawsuits from that same attorney. Taking a strong defensive stance and perhaps going to trial, although costly for that particular case, may prove to be more cost-effective in the long run. The City of Chicago, for instance, has taken a stronger defensive stance against these types of lawsuits and has seen the number of new lawsuits alleging police misconduct drop by 47 percent in 2010.

Regardless of your strategy of defense, please know that Section 1983 claims are not like typical state law claims and must be approached accordingly. LM Michael Delonay is Vice President of Claims for Swiss Re. William B. Oberts is a Director with the law firm Tribler Orpett & Meyer, P.C.

LitigationManagement | 19

Specifically Speaking |

premises liability

Medicare’s Secondary Payer Act

By Steven M. Brom and Nancy Collins

Best practices to ensure compliance and minimize exposure

I

nsurers and attorneys representing defendants in liability claims are well aware of the risks involved with a claimant who is a Medicare beneficiary. Medicare expects to be reimbursed for any payment it makes for injuries related to the incident creating a liability claim. Medicare will seek recovery from wherever it can get it. This may very well include any party paying for the injuries, even when the defendant or its insurer settles with and pays the claimant in full. Therefore, anyone making payment to a Medicare beneficiary for a related claim better guarantee that Medicare is fully reimbursed.

Check the claimant’s Medicare status upon the origination of the liability claim, during the pendency of the claim and prior to the payment of any settlement or award. While a claimant can easily determine his or her status as a Medicare beneficiary, defendants run a significant risk by relying on the claimant’s representation of his or her Medicare status. To personally determine a claimant’s Medicare status, run a query with Centers for Medicare & Medicaid Services (CMS). The exact procedures for running a query can be found in the MMSEA Section 111 Medicare Secondary Payer Mandatory Reporting: Liability Insurance (Including SelfInsurance), No-Fault Insurance, and Worker’s Compensation User Guide (located at https://www.cms.gov/MandatoryInsRep/ Downloads/NGHPUserGuideV3.1.pdf).

There is no indication that misrepresentations by the claimant or good faith errors in failing to determine a beneficiary’s Medicare status will shield a defendant from a claim for recovery

by Medicare. In fact, the User Guide states, “Medicare beneficiaries, attorneys, insurers, self-insured entities, third party administrators and their agents are always responsible for understanding when there is coverage primary to Medicare, notifying Medicare when applicable, and for paying appropriately.”

Upon determining that a claimant is a Medicare beneficiary, the defendant should take steps to comply with MMSEA Section

20 | LitigationManagement | summer 2011

111, which adds mandatory reporting requirements with respect to Medicare beneficiaries who have coverage under group health plan arrangements as well as for Medicare beneficiaries who receive settlements, judgments, awards or other payment from liability insurance (including self-insurance), no-fault insurance, or workers’ compensation. The Section 111 reporting responsibilities are an additional, more comprehensive method for obtaining information regarding situations where Medicare is appropriately a secondary payer. They do not replace or eliminate existing obligations under the Medicare Secondary Payer provisions for any entity. For example, Medicare beneficiaries who receive a liability settlement, judgment, award or other payment have an obligation to refund associated conditional payments within 60 days of receipt. The Section 111 reporting requirements do not eliminate this obligation.

Resolution of a liability claim involving a Medicare beneficiary should not rely on a settlement agreement stating that the claimant will be solely responsible for resolving Medicare claims. Such agreements are not enforceable. Medicare may seek reimbursement from a third party payer even when the Medicare beneficiary has been paid directly. In fact, Medicare may even be able to seek additional penalties for failure to protect Medicare’s interest. Defendants should seek an agreement with claimants that the settlement proceeds will be withheld until notice is provided of Medicare’s payment demand. Payment should then be made by separate checks to the claimant and Medicare.

Medicare’s reimbursement right is a rapidly developing area of the law in which affected parties may be unaware of their obligations.

Medicare’s recent actions make it clear that Medicare intends to aggressively seek reimbursement from wherever it can get it. The penalties for failure to comply with one’s obligations are absolute. At a minimum, practitioners should frequently consult the Centers for Medicare and Medicaid Services website and sign up for updates. LM Steven M. Brom is with The Brom Law Firm, based in Birmingham, Ala. Nancy Collins is Vice President of Risk Management for ABM Industries.

THE LEGAL AUDIT GROUP Meckler Bulger Tilson Marick & Pearson, LLP’s Legal Audit Group is a nationally recognized, full service practice concentrating in qualitative and quantitative reviews of professional services provided by attorneys and claims professionals.

Attorney Fees Disputes/Legal Bill Review and Legal Fee Auditing

Analyzing legal costs for reasonableness, allocation, exhaustion, success on the merits, billing judgment and litigation management best practices for: • direct client engagements • insurance reimbursement and indemnification • bankruptcy • prevailing party • common fund, and • contingency fee cases

Litigation Management/Quality of Service Audits and Reviews

Counseling and consulting with proactive clients in litigation and risk management, including: • creating and implementing legal cost controls • investigating and identifying the source of past problems • assessing quality of service and performance issues • negotiating budgets • drafting case-specific billing guidelines • eliciting and negotiating disposition plans, and • monitoring and enforcing compliance with accepted industry standards

123 North Wacker Drive, Suite 1800, Chicago, Illinois 60606 312.474.7900 | 312.474.7898 fax | www.mbtlaw.com Bruce R. Meckler, Managing Partner and Founder | bruce.meckler@mbtlaw.com Mari Henry Leigh, Partner and Chair | mari.henry.leigh@mbtlaw.com Jerome C. Studer, Partner | jerome.studer@mbtlaw.com

CHICAGO | DALLAS | PHOENIX | SAN FRANCISCO

What is

?

Litigation Management

W

While litigation management has been around for years, the concepts are relatively unknown to those who do not actively manage litigation.

Some might ask, “Why bother with figuring out a definition for litigation management? After all, litigation is inherently unpredictable and not capable of being effectively managed.”

The unpredictable nature of litigation is often used as an excuse by those who do not understand the importance companies place on taming the litigation beast. In today’s world, companies expect their litigation to be as tightly managed as their supply chain, operations and merchandising efforts. Companies expend hard-earned capital dollars to assist in making the management of litigation as predictable as possible. Budgets are set and are expected to be adhered to.

Financial predictability in litigation is no longer a luxury, but an expectation of those who engage in the profession.

Crafting a Definition

Imagine you are at a party and a friend introduces you to someone explaining that you have an important job doing something with litigation. “Really, what do you do?”

“I’m in Litigation Management.” Reacting to a blank stare, you rattle off programs and statistics to demonstrate the complexities of litigation management.

Uh huh.

Or imagine that you are in a corporate boardroom, seeking funding for your litigation management program. You have a few minutes to explain litigation management and have prepared 40 PowerPoint slides. Your audience begins Blackberry surfing by your second slide.

Litigation management could be defined quite simply as “Helping clients and lawyers work well together.” Nice for cocktail discussion, but not very helpful in the boardroom.

Continued on page 24

By Robert Peahl and Thomas E. Best 22 | LitigationManagement | summer 2011

LitigationManagement | 23

The definition needs to be a bit more informative and broader in scope. One could always focus on litigation management as the effective management of a case.

However, that seems a bit shortsighted in today’s world. Litigation management and the efforts behind it focus on the “macro” rather than the “micro.” Anyone can guess right on one case. It is how to effectively manage multiple cases that separates the wheat from the chaff.

Weighing In

Arnold D’Angelo, Chief Claims Counsel for Zurich North America, suggests …

“It starts with a corporate strategy — a vision of success — an understanding of the litigation risks to the company.

Different entities will have different strategies, based upon their particular risks.”

Corporate litigation management strategies (as opposed to individual case strategies) might include litigation avoidance, reducing the cost of litigation, limiting the complexity or expansion of litigation, or protecting corporate assets or reputations.

Joseph Pitstick, Corporate Counsel, BMW Financial Services NA, LLC Indicates …

“Protecting the brand is vitally important when determining a litigation management strategy.”

We might begin our definition as follows: Implementation of comprehensive strategies to reduce or eliminate litigation risks.

We’re getting there, but this definition leaves us asking how we “do” litigation management?

Christopher Carucci, Vice President, Litigation Management/Claims Technical Services, Everest National Insurance Company, explains …

“My job is to manage lawyers toward efficiency in the litigation process with a goal of favorable claims resolutions.”

Pitstick adds …

“Prior knowledge of litigation and how each individual case will likely turn out is critical. Knowing what works in the courtroom and what does not — that is a key component.”

So litigation management is a skill. It is also a process, and it is often a program.

24 | LitigationManagement | summer 2011

It Is a Skill

While our definition will focus on litigation management at the corporate level, we should be mindful of the roles of individual attorneys and case managers, who perform litigation management at the case level. In that regard, a key skill is collaboration — the ability to share experiences and insights toward the common goal of resolving litigation.

Litigation management encourages synergy between clients and attorneys who share their experiences and expertise. What is achieved? Better litigation outcomes. That benefit is magnified when individual collaborations are combined with corporate litigation management processes and programs.

D’Angelo suggests that …

“The end goal is to identify which strategies are more consistently effective either at winning cases or reducing overall economic exposure posed by litigation portfolios. When we can do this, we can enhance the capabilities of all of our attorneys and firms by syndicating the effective strategies.”

It Is a Program

When we speak about efficiency in the context of litigation, we consider who provides legal services and how those legal services are provided. For example, some clients will manage panels of approved attorneys or firms or in-house attorneys. These are attorneys who are versed in the client’s litigation needs and requirements and thus should be more efficient than attorneys who are not so informed.

Some companies have specific staffing requirements to ensure that legal services are provided by professionals with the most appropriate skill levels. Litigation management programs might also establish a preferred approach to litigation and case reporting. Some companies also include litigation support services (court reporters, e-discovery vendors, etc.) in their efficiency programs.

Corporate strategies that target litigation management efficiency might also consider how litigation is managed within the company, such as programs to reduce the cost of responding to discovery or dedicated staff to manage litigation decisions. The strategy might also focus on the transactions that occur in litigation — case

management systems and collaboration tools to make exchanges between clients and attorneys more efficient. These likely include e-billing systems for more efficient processing of legal expenses or for budget management.

Expanding our definition to include efficiency might look like this — The implementation of comprehensive strategies in order to achieve efficiency in the litigation process.

Dan Winkler, Leader of Claims Legal, Westfield Insurance, notes that …

“The end goal of these strategies is to clarify objectives and expectations, merge innovation and value, and ensure that true collaboration takes place to allow for repetitive best practices and results.”

It Is a Process

Our definition includes the concept of litigation as a process. The process of litigation management is usually expressed via litigation guidelines — a suggested approach to collaboration. Simply put, we will exchange ideas at critical points in the litigation and we will determine how best to use that information to get the litigation resolved.

How does the process of litigation management differ from the process of litigation itself? Don’t our court rules and rules of procedure define the process for us? Sort of.

Litigation management procedures work in conjunction with court rules.

Court rules tell us what is acceptable and unacceptable in terms of litigation activity. They also tell us the right ways and wrong ways to proceed with litigation activities — if we decide to proceed.

Litigation management processes, on the other hand, help us make the decisions about whether or not to proceed. Whether or not we can do something is determined by court rules. Whether or not we should do something is determined by litigation management processes.

Corporate litigation management strategies aren’t just about efficiency. We also want good outcomes. For most corporate clients, the outcomes are financial. It is wise to consider efficiency in the context of results. We acknowledge that some litigation results cannot be easily quantified in financial terms. In some litigation, the good result is not always the most economical result. These are the cases where many clients will say, “I don’t care how much it Continued on page 26

Our strength is your best defense.

Wilson Elser is one of the United Statesโ largest

LQVXUDQFH ODZ ยฟUPV ZLWK QHDUO\ DWWRUQH\V UHSUHVHQWLQJ SUDFWLFH DUHDV LQ RIยฟFHV QDWLRQZLGH 2XU LQVXUDQFH DWWRUQH\V DUH DPRQJ WKH PRVW H[SHULHQFHG LQ WKH FRXQWU\ LI QRW WKH ZRUOG :H DUH SURXG RI RXU DELOLW\ WR PHHW RXU FOLHQWVยถ LQGLYLGXDO LQVXUDQFH GHIHQVH QHHGV E\ DSSO\LQJ WKH GLVFLSOLQHV DQG KLJK VWDQGDUGV GHPDQGHG RI OLWLJDWLRQ WR DOO OHJDO PDWWHUV

$W :LOVRQ (OVHU OLWLJDWLRQ PDQDJHPHQW LV QRW MXVW D FDWFKSKUDVH 2XU DWWRUQH\V XQGHUVWDQG WKH FRQFHSWV SUDFWLFHV DQG LQWHQW RI HIIHFWLYH OLWLJDWLRQ PDQDJHPHQW 6WDIIHG ZLWK GHGLFDWHG SURIHVVLRQDOV RXU /LWLJDWLRQ 0DQDJHPHQW *URXS SURYLGHV H[SHULHQFHG WUDLQLQJ DQG RYHUVLJKW RI RXU OLWLJDWLRQ SUDFWLFHV :H WDNH JUHDW SULGH LQ PHHWLQJ DQG H[FHHGLQJ RXU FOLHQWVยถ VHUYLFH H[SHFWDWLRQV

$OEDQ\ รท %DOWLPRUH รท %RVWRQ รท &KLFDJR รท &RQQHFWLFXW รท 'DOODV รท *DUGHQ &LW\ รท +RXVWRQ รท /DV 9HJDV รท /RQGRQ รท /RV $QJHOHV รท /RXLVYLOOH รท 0F/HDQ 0LDPL รท 1HZ -HUVH\ รท 1HZ <RUN รท 2UODQGR รท 3KLODGHOSKLD รท 6DQ 'LHJR รท 6DQ )UDQFLVFR รท :DVKLQJWRQ '& รท :KLWH 3ODLQV $IรฐOLDWHV %HUOLQ รท &RORJQH รท )UDQNIXUW รท 0XQLFK รท 0H[LFR &LW\ รท 3DULV

wilsonelser.com

costs; it is the principle that matters.” While that may all be well and good, fighting too many cases on principle can find the good litigation manager looking for a new job.

The vast majority of litigation can be, and should be, quantified in financial terms. Most litigation management programs take a comprehensive approach to financial results, considering such items as legal spend, indemnity or claim payments, internal staffing costs or revenue impact from litigation.

Most litigation will resolve, with or without effort, but unlike a fine wine, the age of a particular case does not often make it better. A common goal of litigation

siderably in the past few years. Clients and law firms have had transactional data for quite a while. Clients know what they spend and law firms know what they receive.

But knowing how and why legal expenses are incurred is a relatively new area of data analysis.

A common dilemma/frustration is that the available data are from transactional processing systems, thus data capture is limited to that necessary to complete the transaction. To know how and why legal expenses occur, one needs to drill into the expense itself and put the expense in context with the cases that incurred the expense.

on relationships with clients. That day has come and gone. Most (if not all) of the litigation management programs implemented during the past 30 years were responses to data. Data is, and will continue to be, a dominant factor.

Law firms, equipped with the right resources, can perform the same, or similar data analyses as their clients. Some clients will readily admit that at times, the firm’s data is more accurate (or precise) than their own.

The real issue for law firms and for clients is how the data will be used. As Carucci points out, “Having a relationship built on trust and transparency is key. If

The implementation of comprehensive strategies in order to achieve favorable

claim resolutions and efficiency in the litigation process, or pre-litigation dispute resolution. Effective litigation management will yield measurable data aimed toward providing fiscal predictability in the litigation process.

management programs is to influence the litigation process so that results are favorable and often achieved faster than what the normal leisurely process of litigation provides us.

So our definition should include dispute resolution and capture the element of success.

The implementation of comprehensive strategies in order to achieve favorable claim resolutions and efficiency in the litigation process, or pre-litigation dispute resolution.

Bring on the Data

The latest evolution in litigation management is the use of data to influence the litigation process. Each of our colleagues makes substantial use of litigation data.

D’Angelo says,“Ultimately, one must ensure that the business intelligence developed in the context of a claim, suit or investigation is fed back into a loop of continuous learning within the client company. My overarching goal is to reduce the company’s susceptibility to claims by improving the company’s product or service, or the record of how it diligently develops either.”

Litigation data itself has evolved con-

26 | LitigationManagement | summer 2011

Corporate litigation management strategies that seek to learn from their history will invest in systems and staff to conduct these deep analyses. They will also invest in training and systems to use their data to influence future case decisions.

Some will also use the data to establish alternative fee programs or to monitor law firm performance.

Winkler suggests that “the use of reliable data allows for the sharing of real business knowledge, moving relationship discussions from general anecdotal conversations to specific, performanceoriented coaching opportunities that highlight targeted areas for improvement.”

So our modern definition of litigation management should capture the role of data.

The implementation of comprehensive strategies in order to achieve favorable claim resolutions and efficiency in the litigation process, or pre-litigation dispute resolution.

Effective litigation management will yield measurable data aimed toward providing fiscal predictability in the litigation process.

Many law firms are concerned that data will have a predominant influence

you don’t trust me and I don’t trust you, we should not be doing business together.

I can’t achieve my goals unless I have a trusting, efficient business partner.”

If the data isn’t shared fully then the law firm is at a disadvantage. They will lack the ability to manage toward success, if success is comparative to other firms. However, successful law firms should be able to use their own data to monitor their own performance under the program. Those law firms will have the competitive edge.

Effective litigation management is part science and part art. The effective use of the management tools in just the right amount can lead to a successful litigation management program. There are no “one-size-fits-all” solutions. However, our definition of litigation management offers a context in which to evaluate and determine the litigation management programs that meet your particular needs and we hope that it assists others in understanding the value of your litigation management efforts. LM Robert H. Peahl is Chief Litigation Management Executive for Wilson Elser Moskowitz Edelman & Dicker LLP in Washington, D.C. Thomas E. Best is Senior Counsel for Atlanta-based Home Depot U.S.A. Inc.

MANAGE YOUR

LEGAL BILLS

WISELY

BUSINESS SOLUTIONS TECHNOLOGY OUTSOURCING

Simplify the billing process and speed payments – with CSC’s Legal Solutions Suite®. More than 7,000 law firms are currently using our software to submit invoices electronically for automated review. By ensuring that invoices meet agreed-upon guidelines, Legal Solutions Suite streamlines billing for faster turnaround. It’s a wiser approach to managing legal bills. CSC.COM/LSS

Diversity A Legal Industry Perspective

Wher e is d iversit in the y toda legal i ndustr y To tak y? e we lo a closer loo ok int k, o the and c i d eas h advan allenges o f cing d iversit three y in organ izatio Each ns. or thoug ganization htf has on the ul obser va tions state of div ersity.

28 | LitigationManagement | summer 2011

To

A Corporate Perspective Cisselon Nichols Hurd Senior Litigation Counsel Shell Oil Company

day

At Shell Oil Company, Diversity and Inclusiveness (D&I) has long been a company priority. Addressed and reinforced at the highest levels of the organization, D&I is a key part of the company’s corporate culture. Shell has a focused and mature program with the goal of continuing to make progress and create more opportunities to work with minority- and womenowned (MWBE) law firms.

Supporting the company’s longstanding value of working with MWBE firms, Curtis Frasier, newly appointed general counsel of Shell Legal US, embraces the company’s D&I goals and activities. In addition, the company’s Executive Committee recently made a commitment to refresh the company’s D&I efforts for 2011 and beyond. Shell further demonstrated its commitment to supporting MWBE firms by joining the National Association of Minority and Women Owned Law Firms’ (NAMWOLF) 2011 Inclusion Initiative, whose 17 members set a goal of collectively spending $70 million with MWBE law firms in 2011.

As one of the first major corporations to address the drop in the number of minority-owned law firms serving corporate America since the 1980s, Shell and other leading companies launched a spend effort that exceeded their combined goal of spending $16 million on minority-owned law firms. Shell and these companies saw the effort as a call to action to reverse the trend in the years ahead.

Relationship-building is one of the key elements of the company’s successful D&I program. Shell has established and strengthened strong, mutually beneficial working relationships with many MWBE firms over the years. The in-house corporate attorneys at Shell have robust relationships with MWBE law firms, which drive much of the external D&I efforts at Shell Legal.

Regardless of the size, complexity or location of the matter, Shell considers working with diverse firms because they are just as talented as their larger, majority-owned counterparts while offering competitive rates, Hurd says. The company has made it easy for its attorneys to connect with the right MWBE firm by providing an interactive website that features a U.S. map with vetted diverse firms. Currently, more than 50 MWBE law firms are in the company’s internal directory, and each firm is identified by the state in which it has offices, along with the firm’s capabilities.

In order to be considered for the MWBE program at Shell, firms must first be certified by the Women’s Business Enterprise National Council for women-owned firms and/or the National Minority Supplier Development Council for minority-owned firms.

To maintain the D&I program and ensure its success, Shell Legal hosts “MWBE Round Robin” events in which Shell inhouse counsel interview MWBE outside counsel with the goal of fostering relationships between the two. During the most recent event, 32 MWBE firms from across the country participated, and several reported an immediate increase in the number of Shell matters assigned to their firm.

“Diversity and inclusiveness are deeply held values and priorities at all levels of Shell,” Hurd says. “It’s what attracted many of us to join Shell, and it is necessary for successful growth and new partnerships.”

For its D&I efforts, Shell Legal US was awarded the 2010 Employer of Choice Award by the Minority Corporate Counsel Association, and the National Bar Association’s Corporate Counsel Section named Shell 2011 Corporation of the Year.

A Minority Firm Perspective

“Our company supports sustained progress,” says Cisselon Nichols Hurd, senior litigation counsel at Shell and chair of the D&I team for Shell Legal US. “We hope all corporations realize the value of working consistently and long-term with womenand minority-owned law firms to achieve their goals and to develop relationships.”

Martin Greene, Co-Managing Partner at the minority firm of Greene and Letts in Chicago observes firsthand that corporations Continued on page 31

Martin Greene Co-Managing Partner Greene and Letts

LitigationManagement | 29

Go Ahead....

JUMP It’s Time to Join the CLM The Council on Litigation Management is the largest fully inclusive defense organization, comprised of thousands of insurance companies, corporations, corporate counsel, risk managers, insurance professionals, claims adjusters and attorneys. Isn’t it time you join?

The CLM offers two types of membership — Fellows and Members. Fellows are individuals who participate in and manage litigation (Insurance and Claims professionals, Litigation

and Risk Managers, General and Corporate Counsel, service providers, etc.). For qualifying professionals, there is no cost to join the CLM as a Fellow. Members are defense attorneys and their firms.

Both Fellows and Members benefit from the education and collaboration provided by the CLM. With educational and networking events throughout the year, the CLM is an outstanding way to stay connected and make a difference in the industry.

To learn more about membership, visit litmgmt.org/membership

are adopting diversity as a business imperative, “It does appear that many corporations see diversity as a way to obtain and retain the best talent available; to get the best ideas on projects. A lot of corporations not only do that internally, but they appear to want their legal arms, or sometimes their insurance carriers, to do the same thing when it comes to hiring legal talent to provide service to the corporation.”

Greene noted that when it comes to the legal profession, it is very difficult to get lawyers to change the way they have been doing things for decades. He believes that many in the legal profession have not embraced diversity to the same extent as corporate America. “Some legal departments may tend to resist the change that the corporation itself may be fostering,” he says.

In Greene’s experience, law departments retain the decision-making responsibility for hiring counsel, and they do so without input from purchasing departments. He believes some corporate law departments, however, believe in the advantages of diversity and have a desire to affect the change needed to achieve diversity.

Law departments that have bought into it, are pushing their outside counsel to have more diverse legal staffs. “Law firms may contend there are challenges to finding and hiring diverse talent.

It somewhat becomes the mantra and people start to believe it. I don’t know anyone in business, who if they are told they ‘have to do X, Y and Z or you will lose the business,’ won’t find a way to do it. But the problem is that most law firms truly believe they will never lose business,” Greene comments.

To advance change, in Greene’s view, “Corporations have to let those law firms know that if they do not meet corporate diversity goals there will be a consequence, measured in dollars. Once you say that, they will be able to accomplish your goals.”

As he points out, one of the biggest obstacles for both firms and corporations is the convergence of firm resources. “Sometimes they call it convergence or a preferred provider program. The business-driven, well-intentioned motivations to streamline firm resources have an unintended consequence of decreasing opportunity for minority and small firms,” Greene says.

Where national law firms are engaged, diverse law firms often lose opportunity for business. Per Greene, “a number of law firms that have a deep understanding of the local judiciary, local bar and the jury pool will no longer have opportunities to do the work and to provide the diverse breadth of expertise and ideas to clients.”

Conv ergence ne

eds to b e of ideas balanced to ens ur and reso urces to e diversity b ideas to the fore ring those front.

Convergence needs to be balanced to ensure diversity of ideas and resources to bring those ideas to the forefront. In an effort to increase awareness of and access to minority legal resources, Greene serves as President of the National Minority Law Group (NLMG), a fully integrated group of certified minority-owned law firms devoted to delivering the highest quality of legal services on a national basis to corporate America.

A Regional Firm Perspective

Tom Brophy, Esq. President and Chief Executive Officer Marshall, Dennehey Tom Brophy, President and Chief Executive Officer, and Director, Casualty Department at the regional defense litigation law firm Marshall, Dennehey, Warner, Coleman & Goggin, with 19 offices throughout six states with 225 shareholders, recognizes the need to be proactive in promoting diversity. As Brophy suggests, law firms have changed over the years. Forty years ago, firms were often restricted on a religious and ethnic basis. That has changed. However, the diversity issues today involve women and racial and cultural minorities. In his opinion, law firms should promote diversity because it is the right thing to do. He says, “We owe it to one another to assist those who have not historically been provided with opportunities.”

“Change a lot of m takes uscle” “The stro nges more div t firms are far erse tha n they were 30 years ag o.”

Recruiting and retaining minority lawyers remains a continuing focus for the firm. According to Brophy, “If you don’t track the number of minority lawyers your firm hires and retains, you may not realize how many minority lawyers are leaving and you may find that your law firm, despite a sincere interest in becoming more diverse, in fact has made little progress. You have to track successes and failures to learn why minority lawyers leave or stay and then take steps to change those things that encourage minority lawyers to leave.”

Continued on page 33 LitigationManagement | 31

Stuart Maue When you are looking for the leader in legal bill review, superior cost savings, and proven legal cost management solutions.

With more than 26 years of experience, Stuart Maue offers cost management solutions for our clients in the areas of legal cost management, legal bill review audit and analysis, bankruptcy, and vendor invoice review.

To learn more about Stuart Maueâ&#x20AC;&#x2122;s services, visit us at: www.stuartmaue.com

To identify and attract minority candidates, the firm’s colleagues align themselves with minority bar associations as well as committees within majority bar associations to increase access to minority candidates. Additionally, the firm along with two other defense firms in the Philadelphia area sponsors a minority law student reception for students at local law schools.

Marshall, Dennehey has progressed significantly during its 50 year history. When Brophy joined the firm in 1979, the firm was predominantly Irish Catholic and male. He has seen the firm diversify significantly, “I can’t imagine how much weaker our firm would be if not for the Jewish, female, African-American, Hispanic and other minority lawyers who have joined us. A number of them have been here for a long time, are in significant management and supervisory positions, provide quality lawyering and are instrumental to making this a good place to work.”

As part of its recruitment philosophy, when Marshall, Dennehey identifies a student who brings something extra to the firm, it will hire that student even if there is not an immediate need for that hire. The firm believes that this gives them an edge over the com- While Brophy has seen clients discuss insisting the use of a more petition as they have the person on board when the need arises diverse group of attorneys, he has not seen it practiced consistently. and do not have to hire someone He believes infrastructure issues get in who may not measure up to a candithe way. Additionally, the infrastrucdate who was passed over previously. ture in law firms influences the way This philosophy enables Marshall, attorneys are hired, the way attorneys Dennehey to hire strong minority are trained and mentored, and the way candidates when the firm sees them work is assigned. This infrastructure whether or not there is an immediis not necessarily hospitable to young ate need for that candidate. This has lawyers, so young minority lawyers can resulted in the firm being able to hire be doubly disadvantaged.

Litigation Management’s more entry-level minority lawyers.

Giving work to a lawyer with whom focus on diversity is a continuing For the foreseeable future “even if a client has not historically worked dialogue. The magazine we improve every year, we will not has an element of risk to it, which can recognizes the challenges be diverse enough. We hire a numdisadvantage minority attorneys. Law presented by diversity and ber of minority candidates, but do firms are content to allow clients to not retain them all,” says Brophy. select lawyers at the firm with whom inclusion, and is investing energy “Consequently, we continue to look they are comfortable rather than jeopand focus in this important area. aggressively for strong minority ardizing that client relationship in any Litigation Management will continue candidates knowing that it will take way by pressing the client to use lawmore effort to find and retain these yers other than the client’s preferred to address the topic in future issues. minority candidates because if we do lawyers. If clients and law firms are not, we will find that the diversity of going to increase opportunities for miour firm is not increasing but remains status quo.” nority attorneys, the clients and the law firms have to be willing to take some risk. The risk is not in giving work to minority lawyers.

One of the advantages the firm has in retaining minority candiThe risk is giving the work to someone with whom the client has dates is that it does not compensate attorneys based on business not historically worked. However, if clients are going to promote origination. While business development is certainly an important diversity, they have to be willing to do it and if law firms are going to factor in compensation at Marshall, Dennehey, the firm places an promote diversity, they have to be willing to give new attorneys an emphasis on the development of legal talent. This view encouropportunity to participate in existing client relationships. ages shareholders at the firm to share business opportunities with minority lawyers and encourages them to participate in training “Change takes a lot of muscle,” says Brophy, who practicand mentoring. Individuals who are particularly good at develop- es in Philadelphia. He notes that over the last 30 years a lot of ing younger talent are recognized and compensated for it.

Pennsylvania firms have disappeared because they did not change.

The strongest firms are far more diverse than they were 30 years According to Brophy, compensation systems that are based primarily ago. How these firms have been strengthened as the attorney pool on business origination encourage lawyers to hoard business and not changed is proof that, aside from being the right thing to do, proto share opportunities. Unfortunately, this affects minority lawyers moting diversity enhances the quality of the law firm as a law firm disproportionately because they tend to be newer to their firms and and as an employer. Marshall, Dennehey’s commitment, effort have not previously participated in the firm’s business relationships. and focus on diversity and inclusion will continue. LM

Commitment to Diversity

LitigationManagement | 33

A Discussion with Senior Executives

By Dan Ruderman

What Metrics Matter

O

ver the past several decades, we’ve experienced a sea change in the way in-house legal and claims departments think about contracting with outside counsel for legal services. Once upon a time, hiring a law firm basically consisted of meeting with a lawyer and asking for his or her help. Then the bill came and you paid it when you could.

In time, corporate customers learned to ask how much it would cost to hire a

lawyer or firm, and the answer was generally a function of some hourly rate times the number of hours needed to do the work. As a result, clients began to compare law firms by their hourly rate. If it was a small matter, you wanted a low hourly rate. For a large, bet the house matter, paying top dollar was a badge of honor because — so went the thinking — it showed that you cared enough to spend the very most. In both cases, the metric was the lawyer’s hourly rate and it was easily tracked by both the firm and the client.

In recent years, however, more and more companies further embraced the fact that they have significant buying power when it comes to securing outside legal services. They’re increasingly using that buying power to negotiate lower rates, establish Alternative Fee Arrangements (AFAs) and revisit the metrics used to evaluate outside counsel performance.

So in this brave new world, what new metrics are needed? During the Council on Litigation Management conference, a small group set out to begin a discussion around Continued on page 36

34 | LitigationManagement | summer 2011

What Leaders Want Results from the National Litigation Management Study Study participants in the recent litigation management study conducted by Revere Advisory and commissioned by the Council on Litigation Management identified several metrics that they rely upon as primary indicators of litigation management effectiveness. Those fall generally into the five following categories: Category

Sample Detail

Inventory Counting of matters, closures, firms Time

Speed of resolution

Cost Both outcome and expense Quality As rated by stakeholders, insureds, internal staff Predictability Anticipated versus realized (budget, outcome) measurement and metrics, offering up some thoughts on how we can work together to determine which metrics are the ones that matter most. Excerpts from that roundtable are included in the box to the right.

The litigation management industry is abuzz with talk about metric-driven organizations, alternative fee arrangements and creative law firm pricing, but are law firms and their clients looking at the right metrics?

What has changed, what hasn’t? How do firms and clients share information with each other for mutual gain? These are some of the fundamental questions the industry needs to ask in order to arrive at the kinds of metrics that help build trusted partnerships between clients and their outside counsel. What is the one thing that all roundtable participants agreed upon? If the goal is a successful longterm relationship between law firms and clients, having some transparency around the metrics by which success is measured is a good way to establish the necessary trust and communication. LM Dan Ruderman is responsible for consulting alliances and the insurance sector at the LexisNexis CounselLink business unit.

36 | LitigationManagement | summer 2011

Roundtable Participants Thomas Anderson, Senior Counsel, CSX Corporation Scott Rowe, General Counsel, Tower Hill Insurance Group Dan Ruderman, Account Executive, LexisNexis CounselLink Mark Vorder-Bruegge, Attorney, Wyatt, Tarrant & Combs LLP Russ Haskin, Director Consulting and Services, LexisNexis (moderator) Haskin: What metrics does your company use to judge your department? If your CEO walks through the door, what is the number one metric he will want to know?

Rowe: What did we spend and what were our results? How many cases did we win? How many went to trial?

Anderson: Things like, how did we do in our spending performance versus our expectations? We are working our ability to refine our forecasting and budgeting processes.

Vorder-Bruegge: We find that the answer has changed. Law firms are the last industry to catch up with modern information science, so the answer was different a few years ago. For example, in 1980, we put in a system, but the lawyers used pencil and paper to figure out how much a case was going to cost. What will we need to do? How long? Who will do what? There was no practice of looking back at what was done in similar matters.

Haskin: How about with respect to measuring outside counsel? What do you use?

Rowe: To judge outside counsel on commodity type cases, such as sinkholes, we look at the number of cases and divide by the total dollars spent to get an average. Then we compare the firm to the average and come up with some sort of assessment.

Vorder-Bruegge: Inside our firm, we measure several things: profitability versus gross revenue; age of accounts receivable; market value versus realization; partner hours versus associates and paralegals. We are very aggressive in measuring these things and managing them toward our targets. For example, we might review our data and find out something like, of the past 50 product liability cases, what was the average cost to get to a motion for a summary judgment?

Rowe: On defense cases, we also look at dismissals on merits, motions for summary judgment, etc. If we go to trial, is it a bench trial? For us, metrics are all about greater efficiency, and the reward for our outside counsel is more files. Simply put, less efficient firms get less or no more work from us.

Anderson: We also measure outcomes in litigation matters, including trial verdicts and summary judgments.

Haskin: What do you use to measure results? A simple dashboard or something else?

Rowe: We’re just dabbling with this now. So far, these measurement tools look great. I especially like the average cost per firm spreadsheet view we have available.

Vorder-Bruegge: As a law firm, we want to be able to demonstrate value to clients. We subscribe to some market value data by respected researchers and we are transparent about market data on fees with our clients. We know the other firms with whom we are being compared. We don’t want to be the highest priced firm, nor the lowest, overall. We also use this kind of data to better answer internal questions such as, “If I do this deal, what percentage of optimal value will I realize for my people’s time?”

Anderson: We use a dashboard report for individual matters, which we find very useful as a way to track all of the relevant metrics over the lifecycle of a matter.

I use the data we get from our system. The dashboard is formatted to provide a quick view of charges on the matter over its life, how that compares to the budget we established, the number of invoices we’ve paid, the number of timekeepers working on the matter and the effective hourly rate we’re paying. It’s a very useful measurement tool and I can produce it on one page.

Fighting Back

ounce of prevention |

fraud

How Detection and Prevention Can Avoid the High Cost of Insurance Fraud

By Robert Horst, Dan W. Webb and David Rioux

A

ccording to the Insurance Information Institute, approximately 10 percent of the property/casualty insurance industry’s incurred losses and loss adjustment expenses may be attributed to fraud. Not surprisingly, insurance fraud claims have increased as the American economy has declined. In 2009, the National Insurance Claims Bureau reported a 14 percent increase in the number of claims referred to the NICB for investigation of potential fraud. In the same year, 68 percent of states surveyed by the Coalition Against Insurance Fraud reported an increase in automobile “give-ups,” in which policyholders (often behind on vehicle payments) falsely report vehicles as stolen or destroyed.

Insurance fraud has significant implications not only for the insurance industry, but also for policyholders. Researchers have estimated that American households pay an average of $200 to $300 per year in increased premiums due to fraudulent claims.

The rise in fraudulent insurance claims highlights the need for insurance professionals to redouble their efforts to identify these claims. Twenty states have mandated that insurers develop and follow detailed anti-fraud plans. Anti-fraud plans frequently include the following features: • Extensive training programs for claims and underwriting personnel • Periodic audits of claim files by anti-fraud teams • Procedures in which files containing certain “red flag” indicators of potential fraud are identified and referred to anti-fraud personnel for further investigation In addition, many insurers take advantage of claims databases to assist in obtaining prior loss histories and recognizing claims patterns, both of which may be crucial to the identification of fraudulent claims. A growing number of insurers also utilize sophisticated data mining programs to help make accurate predictions as to the likelihood that a particular claim is fraudulent.

Fraud technology can significantly expand the ability to identify and investigate potential fraud over manual methods, yet technology is not a solution by and of itself. A quality fraud investigator is essential to ensure that technology and knowledge/experience are used in conjunction for maximum advantage.

Aggressively combating insurance fraud makes good business sense because it affects the bottom line, competitive position in the marketplace and the policyholders. A strong anti-fraud program can serve as a deterrent against those looking to commit fraud.

Even small changes in the fraud identification and investigation process can have a large impact to the fraud mitigation rate.

Today, an effective fraud solution requires a holistic approach to the problem, including support at all levels of the organization, as well

as a skillful blend and integration of technology, people and the right business processes. Using the right types and mix of technologies in concert with human talent like claims adjusters, investigators, analysts and legal counsel is critical to a successful fraud program.

The identification of suspected fraudulent claims is only half the battle. Insurers’ use of experienced professionals within special investigation units to investigate such claims has become vital.

Moreover, attorneys retained by insurers often play an important role in the investigative process.

The Council on Litigation Management offers a seminar entitled “Fraudulent Claims: Identification, Investigation and Litigation.” This course will be offered at multiple sites during 2011 and will provide information that will facilitate the recognition of fraud, the investigation necessitated by that recognition, the decision to deny or litigate proactively, and the issues faced by the company and each member of the team at the various stages in the process. For more information on the seminar dates or to learn how you can host a presentation of the seminar at your company, visit litmgmt.org/training.

As insurers have increased their efforts in identifying and investigating potentially fraudulent insurance claims, litigation regarding such claims has inevitably ensued. Whether participating in the investigative process or representing an insurer in subsequent litigation, attorneys must investigate the potential existence of insurance fraud with the same diligence as their clients. Such investigation should include careful review of the claims file to analyze whether the insurer’s determination of fraud has a reasonable basis; follow-up interviews with claims personnel and investigators to confirm the basis for the insurer’s conclusion and assess the strength of the case; and a detailed review of agent files and underwriting files/material, including reviews of information related to the claims, the issuance of policies, and other information that may be related to defense of the claim denial.

Proactive prevention of insurance fraud may prove as valuable as the identification and investigation of fraudulent claims. Careful attention must be paid in the underwriting process to ascertain whether an applicant has a history of submitting fraudulent claims and to identify other factors increasing the likelihood that an applicant will commit fraud. LM Robert T. Horst is with the law firm of Nelson Levine de Luca and Horst LLC. Dan W. Webb is with the law firm Webb Sanders & Williams PLLC. David J. Rioux is Vice President of the Corporate Security Department for Erie Insurance and President of the International Association of Special Investigation Units.

LitigationManagement | 37

ounce of prevention |

bad faith

Avoiding Bad Faith Involving the Insured in the Claim Process

By P. Ted Colquett

s

n tio

Ac % 20

80% Results

Pareto’s Principle states the 80 percent of the effects or results come from 20 percent of the causes or actions. Keep this principle in mind when managing claims, since many bad faith claims are filed based on a seemingly small detail.

T

he adjustment of an adversarial third-party insurance claim is a closing window of opportunity. From the moment a claim is reported or a lawsuit filed, time is running on the opportunity for the claim professional to successfully adjust the matter without committing some act or encountering a behavior later coupled to an allegation of bad faith.

Thus, it is often found that bad faith in claim handling arises not from one mistake or deviation from a preferred course of conduct, but rather from a series of small mistakes or omissions made in a critical and short period of time.

Pareto’s Principle, or the 80/20 rule, states that for many events 80 percent of the effects or results come from 20 percent of the causes or actions. The value of the principle for a claim professional is to recognize that a high number of bad faith cases arise from a seemingly minor or innocuous cause. For example, the failure to follow-up on a medical report never received, overlooking a witness whose information would drive value and outcome or neglecting timely and relevant communication with the insured.

Beyond measures to ensure a thorough investigation of underlying facts and coverage, appropriate communication with the insured is a key component of most, if not all, best practices. Much has been written on the correlation of an informed insured and the diminishing propensity to later allege bad faith, but the importance of communication notwithstanding, a neglected part of the relationship between insurer and insured is involvement by the insured in the adjustment of a third-party claim.

This is not to suggest shifting of company responsibilities to the insured; rather, it is to defeat the perception that company interests predominate.

Claim professionals are comfortable with the process of receiving and adjusting an adversarial claim. For the insured, however, an adversarial third-party claim or lawsuit is a challenging and new experience. This makes managing the insured’s experience vitally important. While involving the insured may seem anathema to the insurer’s thinking in most situations since the company has the contractual right to control the course and outcome of the claim, there are definite benefits. It’s much harder and less likely for the insured to cry foul over the claim handling process if he or she was involved and informed at its important stages.

Practical application of insured involvement in a core of best practices is not as daunting as theory would suggest. For example, rather than only communicating developments, go further and invite the insured to respond with questions and suggestions. Actively solicit comments from the insured regarding his or her thoughts on settlement or strategy. Explain at the outset the goals of the claim investigation and ask for participation in achieving them, Always communicate the company’s processes and decisions and seek agreement or consensus. If the insured disagrees or expresses reluctance or doubt, address their concerns without delay.

Involving the insured in the claim and decision process can go a long way toward eliminating or mitigating a bad faith claim. If Pareto is correct, a renewed recognition of the importance of insured involvement in 20 percent of the company’s efforts in claim adjustment may lead to an 80 percent optimal result in avoiding bad faith. LM P. Ted Colquett, a seasoned litigator with Wilson & Berryhill, P.C., in Birmingham, Ala., developed this article with input from senior claim executives and CLM Fellows.

38 | LitigationManagement | summer 2011

When Experience Counts

the alternative |

adr

The Argument for ADR Using Customized Procedural Stipulations

By Richard Righi, Richard Tarangelo and Ann Carvalho

A

confluence of circumstances and events, such as the economic downturn, rising defense costs and unpredictable verdicts, have caused carriers to re-evaluate that perennially present quiver in their cost reduction arsenal — Alternative Dispute Resolution (ADR).

Despite the increased use of ADR in recent years, the crisis in American courts remains acute. Presiding Federal District Court Judge John Roll from Tucson lived the crisis every day. His mission to secure additional court resources was long standing, and by now, well documented in the wake of his tragic shooting. And while the crisis might be more dramatic in Arizona than other parts of the country, an ever-growing populous, combined with the recent economic downturn, foreshadows a chronic problem.

Codes and Restrictions “CC&Rs” and Purchase Contracts. By the time a mass action ripens, a significant portion of the homes have been sold to subsequent purchasers. The original homeowners are subject to a contractual ADR process, but subsequent purchasers can maintain independent implied warranty claims in the court system. These dispute resolution mechanisms may provide inconsistent results and often provide differing rights to recover costs and attorneys’ fees, and as a result, different incentives.

To solve the problem, lawyers have created a comprehensive, customized procedure that takes the form of an “Arbitration Agreement” or “Submission Agreement.” The goals of the agreement are four-fold: 1) Combine multiple plaintiffs with different procedural rights into one binding arbitration process; 2) Limit

To solve the problem, lawyers have created a comprehensive, customized procedure that takes the form of an “Arbitration Agreement” or “Submission Agreement.”

ADR is a healthy alternative to the court system, and therefore a critical component of any program designed to reduce the burden on courts. The reasons are fairly obvious — ADR provides a more efficient means to resolve disputes by reducing the length and complexity of the process. And when efficiency is achieved, expense is reduced. But perhaps more importantly, ADR provides litigants better access to the system and control over the outcome.

Instead of waiting many months, and sometimes years, for their voice to be heard, a litigant can participate in one of many procedures designed to allow an expedited, streamlined presentation of their position. ADR allows the parties to customize the process, which promotes direct involvement and control. ADR reduces risk and provides more certainty. And, ADR can promote a more cooperative and less adversarial process, which discourages escalation of conflict and allows the preservation of relationships.

Disputants have found that resolution options available through ADR are more broad and satisfying than a court decision.

While there are many commonly accepted methods of ADR in use today, a creative, newer method in complex, multi-party actions may be unfamiliar to many. Complex, multi-party “mass” actions can present unique procedural problems, and are the greatest opportunities for ADR. In Arizona for example, construction defect claims involving multiple plaintiffs and varying contractual provisions often require different forums. In recent years, national homebuilders have employed ADR provisions in Covenants, 40 | LitigationManagement | summer 2011

discovery to only that which is necessary; 3) Stipulate to a meaningful fee shifting mechanism that merges contractual ADR provisions with applicable fee and cost statutes; and, 4) Allow sufficient time for initial investigation and mediation prior to the commencement of fee shifting.

The process contemplates binding arbitration within one year of the submission agreement. Each agreement incorporates a provision requiring each party to bear its own fees and costs in the investigative stage. Three or four months are normally set aside from the date the agreement is executed to allow the parties to exchange documents, finalize claims and perform site inspections. Mediation is scheduled at the end of the initial investigative stage.

Each party enters the mediation in good faith with enough knowledge to understand the nature of the dispute, but in advance of formal discovery. The goal at mediation is obviously to resolve the case, but if that does not occur, formal offers can be made that can later be used to determine the prevailing party in post-arbitration proceedings. While it takes some effort to craft an effective agreement acceptable to the parties, it’s proven successful by streamlining the process and creating significant cost savings. LM Richard Righi is an attorney with the Righi Hernandez Law Firm based in Phoenix.

New York-based Richard Tarangelo is Director, Complex Claim Unit with CNA. Ann Carvalho is the Executive General Adjuster with McLarens Young International.

We’re Changing the Way You Pay for Legal Services...

Like no other firm, we have successfully resolved thousands of litigated disputes under alternative fee arrangements. We provide the highest level of legal services, with total defense cost predictability. Along the way, we dramatically reduce file cycle times and resolution costs.

For information, contact Michael Caspino at 714-703-2111.

Arizona

California

Colorado

bvrclaw.com

Nevada

the alternative |

afa

Great AFA Expectations are Manageable

By Jeffrey A. Vanderpool and James A. Loeffler

M

ention alternative fee arrangements (AFA) to outside counsel and many are likely to put their hands to their ears, not because theyâ&#x20AC;&#x2122;re unwilling to change, but because of the perceived financial risk they are asked to assume in the face of unclear client expectations. But when both client and outside counsel expectations are clearly communicated, client cost predictability and law firm profitability are not mutually exclusive.

Companies want results-driven predictability in their legal spend and will reward efficiency. They also want an open and transparent environment that caters to flexibility. Companies also want their law firms to be profitable. After all, a mutually beneficial arrangement is the only way an AFA will work.

Predictability and Profitability

For maximized predictability, a pure flat fee AFA that pays a certain periodic amount, regardless of results and of the time and resources expended can work well for both parties in some situations, but may be detrimental to the firm in others. While the company gets the desired predictability, the law firm may assume financial risk without upside reward. Therefore, clients with successful AFAs expect to shift both risks and rewards to the law firm.

Defining a Win

The client and outside counsel must agree on how a win is defined.

Perhaps a win occurs when the settlement amount is below a certain threshold or a claim is settled within a certain timeframe of being filed. A win should consider both the acceptable settlement threshold (effectiveness) and the time to resolution (efficiency) within the confines of the quality of representation and other ethical standards. The firm should expect to benefit from such valuedriven results, such as a percentage of the settlement savings and/ or a resolution time bonus. In any case, all details of this valuereward structure must be clearly articulated.

42 | LitigationManagement | summer 2011

In addition, the firm should expect the client to provide the anticipated level of volume for those claims fitting a relatively routine or homogeneous profile. The company should also clearly specify the scope of work, particularly in the context of litigation details and transactional details. If the purpose of an AFA is to bring more predictability to the client, does it not follow that any uncertainty or ambiguity in the agreement dampens the level of predictability? Defining these parameters takes clear consistent communication â&#x20AC;&#x201D; which is another expectation.

Open and Transparent Communication

Consider the level of communication clients and counsel have regarding the legal aspects of claims. Both sides are constantly discussing claim documentation, discovery, case evaluations and resolution plans. Clients with successful AFAs expect defense counsel to expand communications beyond the practice of law to the business of law. This is where trust comes into play, particularly for those clients and defense counsel with longstanding relationships. Defense counsel has to be willing to support its profitability requirements, while the client must be willing to provide insight into its financial goals and objectives.

have focused on the legal aspects of cases. However, law firms are now expected to take a program management approach so that they are able to profitably sell value-driven results, not time. This comes back to merging the practice of law with the business of law, and having the people, process and system capabilities required to effectively exchange information with client managers.

Setting and managing AFA expectations can be quite manageable if both parties view the arrangement in the context of business justification. To carriers and corporations: Would you like to achieve predictability of your legal spend with results that add value to your organization? To law firms: Would you like to maximize profit margins by spending less time delivering more value to your clients? LM Jeffrey A. Vanderpool, CPCU, ARM, AIC, is Senior Vice President and Chief Claims Officer of Sunshine State Insurance Company in Florida. James A. Loeffler, CPA, CFE, Certified Six Sigma Black Belt, is President of LegalEye Inc., a legal management software and consulting company with offices in Pennsylvania and Delaware.

Effective communication between clients and counsel will also include the sharing of their respective oversight results.

This process of monitoring and evaluating results should consist of key metrics, analysis, progress meetings and implementation of identified improvements.

Flexibility

Clearly, companies expect law firms to be flexible. The mere fact that a firm is willing to enter into an AFA demonstrates that it is ready to challenge the way it does business. However, both clients and firms should also expect AFAs themselves to be flexible. No one has a crystal ball, and clients understand that it is unrealistic to expect law firms to enter into an agreement with no safety valves for unforeseen circumstances.

A Program Management Approach

Perhaps the most overlooked client expectation is their desire for the law firm to approach claims and cases from a program management standpoint. Insurers and corporations are much more capable of managing several similar projects (cases) under a program (portfolio), just as they do with other areas of their business. Defense counsel are subject matter experts, and historically (and correctly)

LitigationManagement | 43

35

Different Training Courses

More than

5,000 $0

Annual Participants to participate

The Council on Litigation Management offers amazing training opportunities across the country at absolutely no cost to participants or hosts. The hands-on courses, which provide adjuster CE credits in all requiring states, have been developed by hundreds of experienced professionals and reviewed by the CLMâ&#x20AC;&#x2122;s Education Committee.

Courses are available for those new to litigation management and those with years of experience under their belts. Topics range from the basics of litigation management to hands-on mock trials to mediation strategies.

You provide the conference room, the CLM provides the content, the instructors and the adjuster CE credit. Learn more about CLMâ&#x20AC;&#x2122;s educational offerings by visiting www.litmgmt.org/training. Or, contact Mesha King at 954-587-2488 or mesha.king@litmgmt.org.

who knew?

Kristin Seabrook, General Counsel & Secretary, Pilot Flying J Travel Centers Get to know…

F

rom a summer interning with Alan Greenspan to District Attorney in Las Vegas to General Counsel at Pilot Travel Centers, Kristin Seabrook has had an interesting and varied career for such a young professional. She opens up to Litigation Management about some of her experiences and how she got to her current role.

Q. What was your college experience like?

A. I went to Virginia Tech and obtained a double degree — BA in economics and BS in political science. I also had the opportunity during the summer between my junior and senior years to do an internship with Alan Greenspan. He was really interesting, downto-earth guy. It was a great experience. I also got to sit in on some Federal Reserve meetings.

Q. What did you do after graduation?

A. My first summer, I was in London interning for a Member of Parliament for the Shadow Cabinet. That was a great experience.

My office was actually inside Big Ben. Q. And then what?

A. I went to the University of Richmond for law school — well, actually, I received both my JD and MBA at the same time. When I graduated from law school, I took a job as a district attorney in Las Vegas. I was there from 2002 through 2005. I loved it. During my time there, I worked on many different cases. I did 22 jury trials and prosecuted five murder cases.

Q. I bet you get some interesting cases in Las Vegas?

A. Yes. Actually, a couple of cases I was involved with ended up being used on television. One was featured on the show Snapped. That case involved the murder of Las Vegas real estate investor Ron Rudin.

His wife, Margaret, was convicted of his murder. I came in on the appeal and argued before the Supreme Court of Nevada where they held up the conviction.

Back in early days of the television show CSI, the writers would come to the DA’s office and ask for general ideas. One case I worked on made it to CSI. That case involved a man who had checked into a hotel, called up the chambermaid and she was never seen again until they found her dismembered body in several suitcases floating in a pond in a park.

Q. Sounds like an interesting job. So what led you to Knoxville, Tenn.?

A. Well, I met my husband while I was living in Las Vegas and he got a job offer in Knoxville. So I moved with him. When I first moved, I worked for the law firm Butler, Vines and Babb. Then, I heard about an opening at Pilot Travel Centers LLC. I was pregnant with my first daughter at the time and actually went in for my first interview when I was 32 weeks pregnant. They offered me the job when I was 37 weeks pregnant. I gave two weeks notice to my firm, worked two weeks at Pilot, had my daughter and was off for six weeks before I really jumped into my new job.

Q. That’s amazing. How many children do you have?

A. I have two daughters, Elizabeth and Kathryn.

Q. So how was the transition from DA to in-house counsel?

A. Pilot has a small law department, so I have had the opportunity to do many different things. I do environmental law, employment law, contract review and drafting, and have worked on four mergers and acquisitions. I manage all litigation, except for premises liability and workers’ compensation. I’m also the company’s Corporate Secretary, so it’s a busy job.

Q. Sounds like there’s not much time for sleep. What do you do for fun?

A. I spend my free time with my daughters and husband. I take my older daughter to dance, gymnastics and ice skating lessons. I grew up playing sports like softball and tennis. Now I’m involving my daughters in all the things I didn’t do but wanted to do.

I’m also really active in the community and serve on several boards.

who knew?

Hamp Moody, a shareholder at Quilling, Selander, Lownds, Winslett & Moser, P.C., in Dallas, Texas.

Get to know…

F

or nearly 35 years, Hamp Moody has been an attorney representing insurance companies and their insureds in personal injury and insurance coverage matters. With two children in college and one in a private high school, he’s not looking at slowing down any time soon.

Q. Hamp is an unusual name. Is it a nickname?

A. It is a nickname, but it’s the only name I’ve ever known. My full name is James Hamilton Moody, III. In the small east Texas town where I was born, my grandfather was called Big Jim and my dad was Little Jim.

My mom didn’t want me to be Baby Jim, so they came up with Hamp.

I always thought it was my real name. My dad used to call me Ham Bone, and I thought that was my nickname. Then one day a neighborhood boy came to our front door and asked if Ham Bone could come out and play. My mom put an end to that nickname right away.

Q. Where did you start your career?

A. After I graduated law school from Southern Methodist University (SMU), I worked with Strasburger & Price for 25 years. That firm started to focus on more

corporate work, so in 2003, a group of us left and went to my present firm. I kept my clients and am now basically doing the same work for the same people, just at a different firm.

Q. Tell me about your kids.

A. My oldest son is a junior at SMU, my daughter is a sophomore at the University of Texas in Austin, and my youngest son is a sophomore at Jesuit College Preparatory School of Dallas. None of my kids are interested in being an attorney. My oldest is studying theater, though, and I’ve always said that lawyers are like frustrated actors.

So, instead of going the law route, he decided to go the theatre route. He hopes to go to Broadway and work in musical theater. He’s very talented in a lot of different ways — he can do choregraphy, lighting, set design, singing, dancing, acting — just about anything. So if anyone out there has any theater connections, let me know.

Q. What do you like to do in your spare time?

A. Well, right now with my three kids in school, it’s eat, sleep and work. Long-term, though, I want to learn to fly, I’d like to travel around the world in a small boat, and I’d like to do some woodworking. Unfortunately, my wife doesn’t enjoy flying, and being in the middle of an ocean on a small boat is not her idea of a good time. Therefore, it looks like I’ll be doing some woodworking. I have a space in my home to do the work. All I need now is to find the time.

Know someone we should interview for Who Knew? Send your suggestion to susan@ swizzlecommunications.com.

directory of advertisers Brady, Vorwerck, Ryder & Caspino. . . . . . . . . . . . . . . . . . . . . . . 41 CSC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Council on Litigation Management. . . . . . . . . . . . . . . . . . . . 30, 44 Esquire Corporate Solutions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 KEAIS Records Services, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Koeller Nebeker Carlson Haluck . . . . . . . . . . . . . . . . . Back Cover LeClairRyan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 46 | LitigationManagement | summer 2011

LexisNexis CounselLink. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 North American Risk Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Meckler Bulger Tilson Marick & Pearson. . . . . . . . . . . . . . . . . . 21 Mound Cotton Wollan & Greengrass. . . . . . . . . . . . . . . . . . . . . 39 SEA Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inside Front Cover Stuart Maue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 TyMetrix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inside Back Cover Wilson Elser Moskowitz Edelman & Dicker . . . . . . . . . . . . . . . 25

4658452$4058612%049507612004$0908%7665%298007400%593002157600895310485083$9728%5619584785439287515043$01$ 87465 12%049507612004$0908%7665%298007400%593002157600895310485083$9728%5619584785439287515043$01$ 874658452$4058612% 004$0908%7665%298007400%593002157600895310485083$9728%5619584785439287515043$01$ 874658452$4058612%049507612004 5%298007400%593002157600895310485083$9728%5619584785439287515043$01$874658452$4058612%049507612004$0908%7665%2 93002157600895310485083$9728%561958478485083$9728%5619584785439287515043$01$ 874658452$4058612%049507612004$090 8007400%593002157600895310485083$9728%5619584785439287515043$01$ 874658452$4058612%049507612004$0908%7665%29800 02157600895310485083$9728%5619584785439287515043$01$ 874658452$4058612%0400%593002157600895310485083$9728%56195 7515043$01$ 874658452$4058612%049507612004$0908%7665%298007400%593002157600895310485083$9728%5619584785 8746584 %049507612004$0908%7665%298007400%593002157600895310485083$9728%5619584785439287515043$01$874658452$4058612%04 $0908%7665%298007400%593002157600895310485083$9728%5619584785439287515043$01$ 874658452$4058612%049507612004$09 98007400%593002157600895310485083$9728%5619584785439287515043$01$ 874658452$4058612%049507612004$0908%7665%298 002157600895310485083$9728%5619584785439287515043$01$ 874658452$4058612%049507612004$0908%7665%298007400%593002 10485083$9728%561958478485083$9728%5619584785439287515043$01$ 874658452$4058612%049507612004$0908%7665%29800740 57600895310485083$9728%5619584785439287515043$01$ 874658452$4058612%049507612004$0908%7665%298007400%5930021576 5083$9728%5619584785439287515043$01$ 874658452$4058612%0400%593002157600895310485083$9728%561958478543928751504 8452$4058612%049507612004$0908%7665%298007400%593002157600895310485083$9728%5619584785 874658452$4058612%04950 08%7665%298007400%593002157600895310485083$9728%5619584785439287515043$01$ 874658452$4058612%049507612004$0908% 07400%593002157600895310485083$9728%5619584785439287515043$01$874658452$4058612%049507612004$0908%7665%2980074 5 7 6 0 0 8 9 5 3 1 0 4 8 5 0 8 3 $ 9 7 2 8 % 5 6 1 9 5 8 4 7 8 5 4 3 9 2 8 7 5 1 5 0 4 3 $ 0 1 $ 8 7 4 6 5 8 4 5 2 $ 4 5 8 $ 2150% % 0 4 9 5 0 7 6 1 2 0 0 4 $ 0 9 0 8 % 7 6 6 5 % 2 9 8 0 0 7 4 0 0 % 5 9 3 0 0 2 1 5 7 6 0 0 8 9 5 310 4 8 5 0 8 3 $ 9 72 8%516 584785439287515043$01$874658452$4058612%049507612004$09 08%7665 % 2980

Visibility

to reduce cost

TyMetrix 360° for Claims & Risk

SHINE SOME LIGHT ON THE SITUATION. TyMetrix 360° Claims & Risk solutions consolidate all your legal management data onto a single, integrated platform. This enlightening view empowers claims departments to control costs, gain process transparency and act on data-driven insight. Designed by seasoned industry experts, it offers just the clarity you need to improve case management, reduce defense costs and boost indemnity performance.

TyMetrix’s unique value platform helps you use your data and gives you the visibility you need to lower your legal costs.

cttymetrix.com

b u i l t ARIZONA

3200 North Central Ave., Suite 2300 Phoenix, AZ 85012 602-256-0000 CALIFORNIA

3 Park Plaza, Suite 1500 Irvine, CA 92614

949-864-3400

225 Broadway, 21st Floor San Diego, CA 92101

619-233-1600

1478 Stone Point Drive, Suite 400 Roseville, CA 95661 916-724-5700 N E VA D A

300 South 4th St., Suite 500 Las Vegas, NV 89101 702-853-5500

f o r

s u c c e s s

Dedicated to service and leading with integrity and courage, KNCH is the law firm you want on your side. KNCH is a premier civil litigation firm with over 75 lawyers and offices

in California, Arizona and Nevada. Our broad spectrum of practice areas includes litigation defense, business law, employment law, insurance coverage and bad faith, environmental law and most types of general practice areas. Our success has been built upon a formula of properly managing litigation, risks and costs that benefit our clients.

From left to right: Mark Newcomb, Member of Firm Executive Committee; Robert Carlson, AV rated by Martindale Hubbell and listed in 2011 San Diego Super Lawyers®; Megan Dorsey, AV rated

by Martindale Hubbell and current Managing Partner; William Haluck AV rated by Martindale Hubbell and listed in 2005, 2007, 2008 Southern California Super Lawyers and Corporate Counsel Super Lawyers in 2008, 2009; Keith Koeller AV rated by Martindale Hubbell and listed in 2011 Southern California Super Lawyers; William Nebeker AV rated by Martindale Hubbell, Fellow of the Litigation Counsel of America, Trial Lawyer Honorary Society, listed in 2011 Southwest Super Lawyers, Arizona State Chairman of the Council on Litigation Management and Certified Specialist in Personal Injury and Wrongful Death by the Arizona Bar Association.

William Nebeker, Robert Carlson and William Haluck are all members of the American Board of Trial Advocates.

www.knchlaw.com

Complex Litigation – Insurance Coverage – Business Law Employment Law – Construction Law – Environmental Law