August 14, 2022

Archives for November 2014

Recap of last week’s ACI “Bad Faith Claims & Litigation” Conference

On November 18th and 19th, I ventured to Orlando, Florida to attend ACI’s 29th National Forum bad faith claims and litigation at the Hyatt Regency. Approximately 40- 50 attendees heard two full days packed with interesting perspectives on bad faith litigation, viewpoints drawing predominantly from the defense bar.


Included on day two of the program was a fascinating colloquy by a panel of six judges, a mix of state and federal court judges, regarding their perspectives on bad-faith litigation. Most of the audience was comprised of private practice attorneys defending bad-faith cases. Mixed into the attendance list were in-house counsel for major insurance carriers and claim executives.

What follows is a list of random nuggets, thoughts and observations gleaned from the ACI program. This doesn’t do justice to the program, and names have been omitted to protect the innocent:

1. Texas pro-business pendulum may be swinging back toward plaintiffs. Since the early 1990s, Texas has “gone red” politically, but the pendulum may be swinging back in favor of plaintiffs.

2. Curbs on institutional bad faith discovery (TX). A recent Texas case involving Lloyd’s constrains the extent of discovery plaintiffs can impose on institutional bad-faith claims. The claim involved producing tons of claim files for two TPAs who adjusted claims for an

insurer. The plaintiff’s bar is trying to narrow the scope of this case.

3. No need to breach policy to find Florida bad faith. A growing trend in Florida is courts saying that insurers need not be in violation of the policy contract to be in bad faith, especially in disputes over appraisal.

4. Assess appeal options in light of adverse impact on whole industry. When deciding whether or not to appeal a bad trial results, consider the risk to the industry that the appeal is lost. You could win for your company, but create that wall for the rest of the insurance industry.

5. Build a second-look process into bad faith appeal decisions. Local defense counsel and the adjuster who handled the “lost” trial may be so invested in that case but they want to “right a wrong.” These cases need

a second look process to make sure an objective decision is reached.

6. Cultivate a Devil’s Advocate inside the company. Claim departments need an internal devil’s advocate. “There’s a lot of Kool-Aid drinking that goes on when evaluating cases,” according to one in-house counsel for an insurance carrier.

7. Be careful in welding a carrier’s practice to an entire industry practice, especially when a court repudiates the practices, for example defense in juniors changing their opinion 180° because of an internal “peer review.”

8. Be careful in asserting the defense of “advice of counsel.” If you plead that, you often waive attorney-client privilege. If you don’t have a clean claim file, be careful in asserting the advice of counsel defense, which can waive privilege. For example, are there documents in the claim file that the defense may not want the plaintiff to see?

9. Careful on using in-house counsel for coverage opinions. In assessing use of staff counsel for coverage opinions, consider the potential issue of bias and arguments that plaintiff’s and policyholders can make.

10. It should be hard to deny a claim. Denying a claim is a big deal in the decision not to defend is one not to be taken lightly. It should not be easy to deny coverage.

11. Adjuster problems are really supervisory problems. According to one in-house claim executive: “I don’t have an adjuster problem, I have a supervisor problem. These the people I’ve entrusted to make quality assurance runs smoothly.”

12. Written protocols — good or bad? On the issue of whether or not to have written guidelines, one claim exec said, “a guideline is never an excuse for doing the wrong thing.” Another in-house counsel cautioned companies to “avoid a checklist mentality.”

13. “Florida bad faith set-ups? Watchya’ talking about?” A plaintiff attorney from Florida insisted, “they set up case is the quickest way for me to find another thing to do for a living. I don’t take set up cases.”

14. Bad faith attorneys can be pickier about what cases to accept. According to a plaintiff’s attorney from California, “unlike defense attorneys, we get to choose our cases. Defense lawyers have their cases assigned to them.”

15. Perspectives from the Bench. Observations from a panel of six judges:
Most jurists are resolution oriented, often due to docket backlog. (Surprise!!)
“There are cases that have to be tried, but those are few and far between.”
“There’s a reason why only about 2% of all cases filed in federal court go to trial.”
“Jurors tend to be predisposed against insurance companies.” (Surprise #2!!)
Ask yourself, “Does your trial theory match up with public opinion?”

16. Washington state is starting to run a close second to Florida in terms of being a challenging bad-faith environment.

If you have a chance to attend any future American Conference Institute forums on bad-faith, I highly recommend you do so. They are packed with engaging speakers, useful information and substantive handouts. There are also breakfasts and lunches that provide networking opportunities.

Coincidentally, the next ACI Bad Faith Claims & Litigation Conference will be in Philadelphia on March 16th – 17th at The Union League and yours truly will be speaking there.

Hope to see you in the City of Brotherly Love (and bad-faith litigation)!

Insurance Defense Lawyers – Defuse Adjuster “Hot Buttons” Up Front for Better Service

Every client has hot buttons.

Hot buttons have good and bad features.

Good features are things that clients like.

Some may like defense counsel who give them detailed reports. They are voracious consumers of information. They want a complete analysis of liability, damages and case value.

Other claim managers and adjusters hate slogging through multi-page reports and prefer short “executive summaries” or phone updates. Time pressed, they want to cut to the chase, to the

bottom line. They want the option of going back to fill in the analysis that they need. They may also resist paying for the time it takes to prepare lengthy reports, suspecting “padding.”

Others don’t like to take phone calls. They have enough interruptions in their busy work day in the claims department then to be fielding incoming calls from defense counsel, especially when the message does not convey time-sensitive information.

One thing that drove me crazy when working in the claims office was a defense attorney who would call, spend 20 minutes on the phone updating me about a case and then close by saying, “I’ll be putting this into a report for you.” WTF?!?! Why duplicate information in that way, unless it is to goose up a bill?

Some clients may want advice. They hire defense counsel to make recommendations. This is a big part of the value that they see in retaining outside lawyers.
Other clients view this as over-reaching and want your advice only if they explicitly ask you for it. They will make the decisions, thank you.

The moral: when it comes to insurance defense work and customizing your services to claim departments or third-party claim administrators, one size doesn’t fit all. Before stepping on landmines, best to first know where the tripwires are buried.

Often they’re veiled, so you have to tease them to get them out into the open. At the courtship, getting to know you stage, ask about these issues. You never know until you ask. Then, tailor your legal services accordingly.

Question: Adjusters, what other hot buttons do you have defense counsel would ask about at the front-end of the relationship?

5 Ways to Handle the Irate Insured/Claimant/Attorney Who Wants to go “Over Your Head”

One source of adjuster frustration and time “leakage” in the adjuster’s daily schedule is dealing with people — usually disgruntled insureds or third-party claimants — who “want to talk to the supervisor.” These are complaints from claimants or others who want to go “over my head” to appeal to a manager.

Complaint Dept

In one way, cialis generique this does not compound any time management problem. Put aside the annoyance factor. If the claimant goes around you or over your head to appeal to your boss, that’s time that you are not spending haggling with the claimant.

Of course, any time “savings” captured this way may be offset by the colloquy that you will necessarily have to have with the boss to explain the situation and to provide context.
Doubtlessly, the claimant will describe a litany of woes with regard to how you’re handling (or allegedly, mishandling) the claim: delays, false promises, wrongful claim denial, etc. Hopefully, you have a boss who will back you up, but that is not a given in today’s work setting. Just remember, “The flattest pancake has two sides.”

If you try to block or discourage the complainer from going around you, that only motivates them further to try the “end run.” They may perceive that you are afraid of this option, that you have something to hide. Therefore, discouraging them from going over your head is probably not a wise choice.
On the other hand, blithely encouraging them to do so does a disservice to your boss, who probably has better things to do than to field complaints from irate policyholders or insureds. There is a fine line and balance here.

Here are five tips:

1. Keep them happy. Deliver great service. Be ultra-responsive. Return phone calls. Reply to e-mails or letters. Be proactive in communicating, whether it’s with the policyholder or a claimant. Exercise emotional self-control. Be unfailingly polite. Make sure your stance on the claim has a firm foundation. None of these are failsafe tactics, but they lower the odds that you will have an irate person demand to speak to your supervisor.

2. Relay the message. Do not embargo the request or attempt to block a person from contacting your boss/supervisor. This will only incense them and incentivize them to try harder to go around you and over your head to appeal to a higher power. Let them know that you will relay the message to your supervisor, who may or may not be in the office or available at the very minute the irate person demands an audience.

3. Give the boss a heads-up. It’s best if you can alert the supervisor or boss as to what is coming, whether it is a phone call, e-mail, fax or letter. Explain the situation and the reasons why you have done which you have done, or not done. Ideally, you can get buy-in from the boss in advance of the dialogue with the claimant. It’s always preferable if you can avoid a situation where your boss is hit “cold” with the complaint about some file that you’re handling.

4. Establish a protocol before these situations arise. Proactively approach your boss about these situations. Different supervisors may have different perspectives and philosophies. Explain that, despite the best efforts, there’ll always be a few difficult claimants or policyholders who want to speak with the supervisor. Asked the boss, “How would you like me to handle these?” Having a claimant or policyholder go over your

head to the boss is not a sign of shame. The risk and practice is inherent in the adjuster’s job, which unfortunately involves the risk of making somebody profoundly unhappy, regardless of the adjuster’s decision. Don’t take it personally.

Of course, if these situations start recurring disproportionately and you hit the boss’s Ridge radar screen because of repeated or similar complaints, then you may have a problem and something to worry about. In that case, the irate claimant or policyholder may not be the problem. You may be the problem!

5. Determine if the boss “has your back.” After the exchange and the disgruntled person has said his or her piece with the supervisor, decide whether or not the boss supported you and back you up. Hopefully, he or she did. If not, engage in some introspection as to whether or not there something you can learn from the situation. If you strongly feel that you are in the right and that the boss repudiated or overruled your decision — throwing you under the bus — you have a different decision to make. Do you still want to work for that boss? If so, continue. If not, consider looking for another position.

None of these tactics are foolproof, but these five strategies provide a template response for dealing with the inevitable situations where unsatisfied customers or stakeholders – – policyholders, claimants, opposing attorneys, vendors, brokers or agents – – think they have a chance of overriding your decision by appealing to a higher authority.

Now, I please speak with your boss?

Q: What tactics and techniques have YOU found successful in dealing with the “appeal to higher authority” ploy?

Taming the Adjuster In-Box …Take Out the Trash!

When I was a kid, one of my household chores was taking out the trash. At that time, there were no rolling trash bins equipped with wheels. These aluminum behemoths had a handle at each end and you had to muscle the full can down the driveway to the curved. I hated it and used to joke that, until the age of twelve, I thought my name was “Garbage,” because so often my parents would turn to me and yell, “GARBAGE!!!” on certain nights of the week, just before trash pickup.

Delete Key

Despite the fact that I hated the job, taking out the trash was – – and is – – a necessary function for a household. It is also a necessary function for claim professionals in taming their e-mail and their inbox. Sometimes when it comes to taming adjuster e-mail, we are our own worst enemies. One tactic to tame this beast is to get reacquainted with the.

Liberally use the “DEL’ key! Get reacquainted with this key! As you get an email, ask yourself:

• “Do I need to do anything in response?”
• “Should I save it?”
• “Is this task to delegate to someone else?”

If the answers are “no,” hit DEL.

Be done with it.

Were you copied in as a “CYA” gesture?

So much of what goes on in the claims office is to cover the backside in case there is a decision made big goes awry. In the interest of being kept “in the loop” we end up being bombarded with extraneous e-mail is not necessary for our job.

Put your inbox on Slim-Fast and … “When in doubt, delete it out.”
Make taking out the trash a regular feature of your e-mail in inbox management.

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