2013.3 Spring Litigation Mgt

spring 2013

LitigationManagementMagazine

Raising the Bar Collaborative Performance Management p. 50

OMG?!The Impact of Social Media on the Tripartite Relationship

p. 54

Runaway JurorsRouting Out Rogue Jurors Before Trial

p. 56

What’s hotCurrent Trends and the Future of Litigation Management p. 46

LM Spring 2013.indd 1 3/1/13 1:51 PM

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S-E-A’s bio-mechanical engineers have the formal

education, training and experience to bridge the gap

between engineering and medicine to analyze the

effects of applied forces and motion on the human

body. S-E-A’s researchers have investigated

injury-causing vehicular accidents of every sort

as well as job-related injuries across the

spectrum of business and industry, providing

scientifically sound rationale for the postulated causes

of the injuries sustained. S-E-A’s more than forty years

of investigative expertise can bring clarity into situations

clouded with emotion and colliding agendas.

Visit www.SEAlimited.com

or call Jason Baker at

800-782-6851 for more details.




S-E-A’s bio-mechanical engineers have the formaleducation, training and experience to bridge the gapbetween engineering and medicine to analyze theeffects of applied forces and motion on the humanbody. S-E-A’s researchers have investigatedinjury-causing vehicular accidents of every sort as well as job-related injuries across the spectrum of business and industry, providing

scientifically sound rationale for the postulated causes of the injuries sustained. S-E-A’s more than forty years of investigative expertise can bring clarity into situations clouded with emotion and colliding agendas.

For more information please visit us at sealimited.com/biomechanical.html or call Douglas Morr at 800-782-6851.

SEA Spring 2013.indd 1 3/1/13 1:49 PM

DEPARTMENTSFROM THE TOPSharpen your networking skills at industry events 10Developing and mentoring the new insurance defense attorney 12

SPECIFICally SPEakInGDelegating jobsite safety responsibilities 16Preventing the spread of pollution in urban areas 18How broad is the duty to aid business invitees 20Rising impact of motor carrier CSa scores 22insured contract and additional insured tenders 24The cedent-reinsurer relationship 28Leading the way 30Workers’ compensation benefits outside the workplace 32Legal project management picks up speed 34Using transactional insurance 36end of the med mal cap era 38navigating broker exposure and ai endorsements 40Reducing exposure to insurer liability 44

RISk ManaGEMEnTCreating and implementing a crisis communications plan 58

OUnCE OF PREVEnTIOnFighting fraudulent theft claims 60Who controls a fraud investigation? 62

WHO knEW?

Frank Chang, Lead actuary, google 65

adrianne Baumgartner, Managing Partner, Porteous, Hainkel & Johnson 66

iN EvERy iSSuEPublisher’s Letter 5events 8

54 OMG?!The Impact of Social Media on the Tripartite Relationship

56 Runaway JurorsRouting Out Rogue Jurors Before Trial

46 What’s HotCurrent Trends and the Future of Litigation Management

50 Raising the BarCollaborative Performance Management

54

56

contents | spring 2013

OMG?!

LM Spring 2013.indd 3 3/1/13 1:51 PM

Bottomline is chosen

more than any other legal spend management vendor

Legal Spend Management Solutions to Meet Your Every NeedTechnology · Expert Legal Bill Review · Expert Independent Adjuster Bill Review

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an EVEnTFUl yEaR It’s a new year and spring is quickly approaching. At the CLM, that means we’re in Annual Conference overdrive. We’re planning great educational sessions and amazing networking events — including the first-ever CLM rodeo. Our keynote speaker is George Neale, Executive Vice President and Chief Claims Officer, Commercial Insurance, for Liberty Mutual. George oversees a staff of more than 5,000 and has been in the industry for more than three decades, giving him a tremendous perspective on the industry and what it takes to succeed.

The Annual Conference also features more than 80 roundtable sessions on a wide range of topics. The roundtable format allows everyone in the room to get involved, ask questions and share knowledge. For our opening session on Thursday, a panel of leading industry executives will address what’s new in claims and litigation management. We spoke with some of the session panelists to preview the topic in this issue’s cover story.

If you’re not coming to the Annual Conference, there are plenty of other CLM events being planned for 2013. With the advent of our local chapters — we have more than 30 local chapters, with more on the way — there are many more opportunities to attend an event near you. We’re also conducting our

second year of topic-specific Mini-Conferences. Be sure to check out the CLM website Events page for a full list of upcoming events.

Events are not the only way to engage with the CLM. We’re happy to have introduced a new feature on our website this past month — the Member/Fellow News page. Now you have an opportunity to share your news with other CLM Members and Fellows. Changing jobs, got a promotion, opened a new office, resolved a big case? All these events are great material for the page.

Looking forward to seeing you (in person or virtually) in 2013!

adaM POTTERExecutive Director, CLM

[email protected]

|ExECUTIVE dIRECTOR’S lETTER| LitigationManagementSpring 2013Vol. 3, issue 2

PublisherHarry Rosenthal

associate PublisherBryan Pifer

Managing EditorSusan Wisbey-Smith

art directorJason T. Williams

advertisingDirect all advertising inquiries to:

Harry Rosenthal at [email protected] or 859-261-1256.

Bryan Pifer at [email protected] or 513-444-4560.

EditorialDirect all editorial inquiries to Susan Wisbey-Smith at [email protected] or 847-317-9103.

ReprintsDirect all reprint requests to Susan Wisbey-Smith at [email protected] or 847-317-9103.

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

Copyright © 2013 by the Claims and Litigation Management alliance. all rights reserved. no part of this publication may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the Claims and Litigation Management alliance.

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

AwArd of ExcEllEncE — nEw MAgAzinEs And JournAls

Bottomline is chosen

more than any other legal spend management vendor

Legal Spend Management Solutions to Meet Your Every NeedTechnology · Expert Legal Bill Review · Expert Independent Adjuster Bill Review

Find out why at www.bottomline.com/3X

Be sure to check out the ClM website Events page for a full list of upcoming events — www.theclm.org/events

LM Spring 2013.indd 5 3/1/13 1:51 PM

http://www.theclm.org/events

mailto:[email protected]





6 | LitigationManagement | spring 2013

MaRTIn H alPERT President and CEO, Environmental and General Liability Consulting Group

adRIannE BaUMGaRTnER Managing Partner, Porteous, Hainkel & Johnson

laRRy BEEMER National Claim Director, Fireman’s Fund Insurance Company

TRICIa BEllICH Attorney, Kopka, Pinkus, Dolin & Eads

ROBERT J. BERGSOn Partner, Abrams Garfinkel Margolis Bergson, LLP

FRank J. BRIER, ESq. Litigation Counsel, Geisinger Health System

JEFF BRInkER Attorney, Brinker & Doyen, LLP

GUy E. “Sandy” BURnETTE, JR. Attorney, Guy E. Burnette, Jr. P.A

lynETTE CaldWEll Special Investigator, Liberty Mutual Insurance

FRank CHanG Lead Actuary, Google

JERRy CRaIG Excess Claims Supervisor, Baldwin and Lyons

MaRCy CROFT Partner, Forman, Perry, Watkins, Krutz & Tardy

MICHaEl CROnIn Senior Claims Counsel, Westfield Insurance

MIkE daly Global Practice Leader, Liability Claims, XL Insurance Company

JOSEPH dePaUl Senior Vice President, Management & Professional Liability, Arthur J. Gallagher

dOMEnICk diCICCO Head of Legal Strategy, AIG

laURa FaRJadIan Senior Intellectual Property Manager, Navico

ElIzaBETH GanIERE General Counsel, Gulf Stream Coach, Inc.

MaRTa GaRRETT Claims Specialist, ProAssurance

kRISTa GlEnn Senior Vice President, ACE North American Claims

laURa GOOdSOn Partner, Forman, Perry, Watkins, Krutz & Tardy

J. MaTTHEW HaynES, JR. Attorney, McCandlish Holton

BRIan HEERManCE Partner, Morrison Mahoney LLP

GREGORy HIRTzEl Principal, Post & Schell P.C.

kIM HOllaEndER, ESq. Attorney, Langsam Stevens Silver & Hollaender LLP

ROBERT JOnES Global Head of Financial Lines, Specialty Claims, AIG

PaTRICIa kaGERER Risk Management Executive, American Contractors Insurance Group

MaTTHEW P. kERIS, ESq. Attorney, Marshall, Dennehey, Warner, Coleman & Goggin

BOB kOPka Managing Partner, Kopka, Pinkus, Dolin & Eads

nICOlE kOPPITCH, ESq. Attorney, Reminger

BRETT l. kUllER Associate, Abrams Garfinkel Margolis Bergson, LLP

MICHaEl lEaHy Senior Partner, Haight, Brown & Bonesteel

dR. JOSEPH J. lIFRIERI President, Warren Professional Services, LLC

PaTRICIa MCCUllaGH Attorney, McCandlish Holton

JOHn McGann Partner, Wilson, Elser

PRESTOn McGOWan Vice President and Manager, Claim Litigation Management Unit, Chubb

ROB MOSCHET Attorney, McCollum, Crowley, Moschet, Miller & Laak, Ltd.

nICky MUkERJI CIO, Legalbill

BREnda k. RadMaCHER Partner, Wood Smith Henning & Berman, LLP

RICHaRd RandazzO President, Invision/Brownyard Claims Management, Inc.

lInda PRETzEl ROBERTS Claims Analyst, American Safety Claims Services, Inc.

CaRyn SIEBERT President/CEO, Carl Warren & Company

anTHOny R. SlIMOWICz Counsel, O’Toole Fernandez Weiner and Van Lieu, LLC.

MICHEllE STEGMann Assistant Vice President, Resolute Management, Inc.

THOMaS STORRER, ESq. Attorney, Langsam Stevens Silver & Hollaender LLP

GaRy TIPTOn General Liability Claims Adjuster, North American Risk Services

GEnE a. WEISBERG Partner, Gladstone Michel Weisberg Willner & Sloane, ALC

danIEl WInklER Leader, Claims Legal, Westfield Insurance

FRank zEIGOn Commercial Property Claims Manager, CNA

JOnaTHan zISS Partner, Goldberg Segalla LLP

lORI zOBlER Director of Claims, BerkleyNet

Thank you to the many outstanding professionals who have authored and contributed to articles in this issue of Litigation Management.

If you’d like to contribute to a future issue of Litigation Management, email Susan Wisbey-Smith at [email protected].

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Stuart Maue’s new DashCard Analytics:• Answers questions quickly and easily

• Allows for more accurate decision making • Increases effi ciency and productivity

www.stuartmaue.com

Don’t waste time searching for answers to your legal spend questions.

For a live demonstration or to learn more about how DashCard technology can help you increase response times, contact Stuart Maue at:

1-800-291-9940 or e-mail: [email protected].

We have the solution. Stuart Maue’s state-of-the-art DashCard™ Analytics allows you to make decisions more effi ciently and with greater confi dence.

With a new and innovative way to analyze data, fi nding the answer is almost as fast as thinking of the question.

Claims College Enrollment Opens on april 1

The CLM Claims College — the source for claims manage-ment continuing education — is coming this September. Created by and for claims professionals, Claims College participants will gain the knowledge necessary to do their current jobs better and prepare for higher-level positions. In this inaugural year, professionals may choose from education in one of the following areas:

u Claims Management

u Professional Lines

u Transportation

u Workers’ Compensation

The Claims College will be held Sept. 8 to 11 in Philadelphia. The registration fee is $499 for CLM Fellows and $999 for CLM Members.

Visit www.theclm.org/claimscollege for complete details.

THE BRIEF

EVENTS

May 13 Washington, DC Supreme Court Tour

May 16Dallas EventRangers Game

May 17 DallasProduct Liability Mini-ConferenceRenaissance Dallas Hotel

June 13 Cleveland EventCleveland Museum of Art

June 14 ClevelandTransportation Mini-ConferenceRenaissance Cleveland Hotel

June 20Omaha EventCollege World Series

July 11Chicago EventAnnual Boat Cruise

July 12ChicagoWorkers’ Compensation Mini-ConferenceDouble Tree by Hilton Hotel

July 24 Hartford EventBoat Cruise

July 25BostonEvent

July 26 BostonProfessional Liability Mini-ConferenceWestin Boston Waterfront

LM Spring 2013.indd 8 3/1/13 1:51 PM

http://www.theclm.org/claimscollege

Stuart Maue’s new DashCard Analytics:• Answers questions quickly and easily

• Allows for more accurate decision making • Increases effi ciency and productivity

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Don’t waste time searching for answers to your legal spend questions.

For a live demonstration or to learn more about how DashCard technology can help you increase response times, contact Stuart Maue at:

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With a new and innovative way to analyze data, fi nding the answer is almost as fast as thinking of the question.

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Learn more at datacert.com/insurance

Industry-leading insurance companies rely on Passport to drive down expense and loss

ratios and enable best practices for claims defense among staff and panel counsel.

Streamline litigation management

Reduce legal costs

Achieve better claims outcomes

Go Further with Passport®

FROM THE TOP | adVISORy BOaRd

CLM events are a tre-mendous opportunity to network with other industry professionals, vendors and service

providers, but are you making the most of each event? Working a crowd comes naturally to some. For others, it’s a challenge, one that even brings on a level of anxiety. With a good game plan and minimal preparation, you can make great connections at every event.

It might just be networking 101, but even the most experienced profes-sional forgets business cards once in a while. Before attending any event, check your business card inventory. “Bring your cards, bring enough cards, and make sure they are updated,” says Elizabeth Ganiere, General Counsel for Gulf Stream Coach, Inc. and a member of the CLM Advisory Board. “And in today’s world, business cards are so inexpensive, make sure they are completely updated with your title, email, credentials, etc.”

Ganiere also suggests having an ice breaking strategy. “By nature, I’m really shy. I get over that by being pre-pared,” says Ganiere. “I find it easy to break the ice by focusing on some-thing about the other person. If some-one has a nice hairstyle or an attractive outfit, I’ll comment. That tends to get a conversation started.”

CLM events are structured to maximize the networking opportunities. ““The Annual Conference provides a unique opportunity to network with industry thought leaders as well as current and

future business partners,” says Dan Winkler, Leader, Claims Legal.

Westfield Insurance and member of the CLM Advisory Board. “The arrange-ment of the conference events allows for various opportunities to meet indi-viduals who are dealing with common issues of interest that can spark new ideas and innovative solutions.”

“CLM events are unique in they pro-vide the perspective from a law firm, corporate counsel and insurance point of view,” says Ganiere. “It’s a great forum to share ideas and experiences. I especially enjoy the roundtable ses-sions at the Annual Conference. They are set up in a way that everyone in the room is encouraged to participate. The facilitators guide the conversation, but no one is there as the authority on the topic. It’s a room of industry profes-sionals sharing ideas, experiences and suggestions.”

Not all events are as interactive and dynamic. In those cases, Ganiere rec-ommends a wingman. “I once attend-ed an event that was really boring. I was with a friend and rather than just leaving, we set a goal to meet at least one new person before we left. It worked and we did meet some inter-esting people,” she says.

Post event, both Ganiere and Winkler recommend follow up to strengthen those new connections. “I use network-ing tools such as LinkedIn after the event to maintain a connection with a new contact. That allows for the creation of a strong ‘brain trust’ that is available with a few clicks of the mouse,” says Winkler.

Ganiere also adds her new contacts to her networking circle. “I’ve met several people who I have called after an event either to hire them as out-side counsel or to pick their brain on a topic. I recently needed counsel in a specific area and called someone I met at the Litigation Management Institute. We had that shared experi-ence, so working together was easy and something we both benefitted from,” she says. LM

Sharpen your Networking Skills at industry Events

Making Connections

nETWORkInG TIPSK listen. When you first meet

someone, get to know them, don’t focus on selling them anything.

K Share. Keep your business cards updated and handy.

K Stretch. Don’t just talk to people you know. Make an effort to meet new people.

K Plan. If possible, review the attendee list in advance and know who you want to seek out and meet.

K Follow up. Reach out to your new contacts after the event via email and LinkedIn.

LM Spring 2013.indd 10 3/1/13 1:51 PM

Learn more at datacert.com/insurance

Industry-leading insurance companies rely on Passport to drive down expense and loss

ratios and enable best practices for claims defense among staff and panel counsel.

Streamline litigation management

Reduce legal costs

Achieve better claims outcomes

Go Further with Passport®

LM Spring 2013.indd 11 3/1/13 1:51 PM

http://datacert.com/insurance


FROM THE TOP | naTIOnal COMMITTEE

Every good lawyer had a good mentor. Clarence Darrow’s was John Peter Altgeld. Richard “Racehorse” Haynes’

was Percy Foreman. Robert Shapiro’s was F. Lee Bailey. Lawyers serving the insurance and claim management industry constantly strive to provide excellent legal services in an economi-cal manner. Strong mentorship of the current generation of young lawyers will ensure that these lawyers have the necessary skills to meet both goals.

Having junior attorneys handle appropriate assignments in the liti-gation process is one way to achieve these goals. Today’s junior attorneys are bright, well-educated, eager and enthusiastic individuals. Their hour-ly rates are significantly lower than

most senior attorneys and partners. However, these young lawyers are still learning how to apply their academic skills to practicing law and need the mentorship of seasoned senior attor-neys to cultivate their practice and hone their talents. Mentorship, prop-er training, experience and opportu-nity will make these junior attorneys the next generation’s mentors. As industry veterans, senior attorneys and experienced claims professionals can help these junior lawyers develop.

Law Firm TrainingA new lawyer’s post-law school men-toring generally starts at the law firm. Law firms must first help junior law-yers learn how to apply their academic training to the concrete practice of law. While law schools teach students that negligence is the omission to do some-

thing that a reasonable man would do or doing something that a prudent and reasonable man would not do, law firms must teach new lawyers the practical aspects of defending against a negligence lawsuit. They need to learn about identifying and interview-ing key witnesses, litigation strategy, written discovery, depositions, vetting and retaining litigation savvy experts, motion practice, assessing and chal-lenging damages claims, preparing a case for trial and other related matters. Further, law students may have stud-ied contract law, but never analyzed an insurance contract or been asked to determine whether insurance coverage for a specific incident or damage exists.

Transferring a new lawyer’s skill set from the academic to the practical takes time and commitment. New

Developing and Mentoring the New insurance Defense Attorney

By J. Matthew Haynes, Jr., Patricia McCullagh and Caryn Siebert

Sculpting the Future

LM Spring 2013.indd 12 3/1/13 1:51 PM


attorneys are first tasked with specific assignments on less complicated mat-ters — often in a lower trial court. As they progress, they begin to review and analyze those same files to evaluate liability and damages issues and assist with recommendations for case pro-gression. Soon after, they accompany senior lawyers to depositions and hear-ings before handling these matters on their own. Ultimately, they assist with trials until they have sufficient expe-rience to try cases on their own. New lawyers must also learn to develop pro-fessional skills, such as time manage-ment, case file organization, dealing with difficult opposing counsel, pre-sentation style and the ability to think on their feet. While time consuming, a strong law firm mentorship program can pay exponential dividends to both the law firm and ultimately clients.

More importantly, though, law firms must educate new lawyers about the scope and nature of the insurance business. Specifically, educating new lawyers on strict compliance with reporting and billing guidelines is a hallmark of any civil defense practice. New lawyers must be taught to exceed client expectations, not just meet them. Knowledge of each individual client’s legal goals and business goals, budgets and bottom lines is critical to ensure client satisfaction. The legal research and motions we prepare and deposi-tions and hearings we attend are not just academic exercises, but instead must accomplish a specific business objective in a cost-efficient manner. We also coach these lawyers on how to respectfully and clearly communi-cate with non-lawyer insureds, claims managers and other litigation support personnel in a practical, effective man-ner without using too much legalese. Armed with an understanding that legal services are only one compo-nent of achieving our clients’ business goals, new lawyers can better assess the business risks and benefits of the actions they recommend.

Claims Professional’s InvolvementClaims professionals can also assist in developing a new attorney’s skills. New attorneys are eager to please and enjoy client interaction. Adjusters should clearly discuss goals and expectations for specific files with junior attorneys. Although more experienced lawyers inherently know how much time and effort should be spent on specific matters, clear assignments will help new attorneys focus on necessary tasks without wasting time investigating tangential or irrelevant issues. In conjunction with the mentorship of senior attor-neys, claims adjusters and manag-ers should respond to inquiries or requests for information as quickly as possible. This will allow the new attorney to continue focusing on the projects assigned without digging through files to uncover information that is otherwise readily available.

Claims professionals should also feel comfortable providing new attorneys positive and negative feedback where applicable or necessary. Having this feedback allows a new attorney to either address and correct concerns or contin-ue to provide information in the helpful manner identified. Where necessary, a call to the junior attorney’s supervi-sor may be necessary if concerns have not been addressed. This will assist the senior attorney training (or retraining) the new lawyer to meet expectations.

Building rapport with new attorneys will also create a collaborative work-ing relationship. New lawyers are often nervous and may have never worked directly with clients before. Sharing war stories or discussing how you (or another attorney) addressed prior similar situations will help edu-cate the new lawyer about how to act or react, and ultimately provide better legal service. A lawyer who is comfortable working with you is also likely to interact or communicate with you more frequently, providing more information about your cases.

Because of the time and energy nec-essary to train new attorneys, a cer-tain degree of patience is required of law firms and claims professionals. Almost all new lawyers will experi-ence growing pains as they develop their skills, practice and business acumen. This is especially true when migrating away from hourly bill-ing arrangements over to alternative fee arrangements. We must remind ourselves that we too were once new attorneys and claims profession-als requiring training and education from others. It is now our collective responsibility to invest in our future attorneys and claims professionals, and take time to groom and mentor colleagues to continue to enhance the value to the industry that these new professionals provide. LM

J. Matthew Haynes, Jr. and Patricia McCullagh are attorneys with McCandlish Holton. Caryn Siebert is the President/CEO of Carl Warren & Company.

LM Spring 2013.indd 13 3/1/13 1:51 PM

HigHligHts will include:Keynote Speaker — George A. Neale, Executive Vice President and Chief Claims Officer,

Commercial Insurance, Liberty Mutual Insurance

Premier sessions — What’s New in Litigation Management and Pathways to Dynamic Leadership

networking events — CLM Rodeo and Disco Party

AwArd reciPient — Funds raised from the Golf Outing will be donated to the Semper Fi Fund, which provides financial support to injured members of the U.S. Armed Forces and their families.

Thank You Sponsors!With the generous support of our sponsors, the 2013 CLM Annual Conference promises to be the best CLM event yet! The Conference includes more than 80 collaborative sessions and several panel presentations featuring industry leaders.

DiamonD/EmEralD

GolD

SilvEr

PlaTinum

Record Retrieval • Processing • Production

C O R P O R A T I O N

T-SCAN

WCDEnvironmental & Construction

Claims Consulting

®

Evaluate. Negotiate. Resolve with confidence.

LitigationHUTCHINGS

®

Records & Reporting

CLM Annual Conference 2013 Spread.indd 2-3 2/26/13 11:23 AMLM Spring 2013.indd 14 3/1/13 1:51 PM

HigHligHts will include:Keynote Speaker — George A. Neale, Executive Vice President and Chief Claims Officer,

Commercial Insurance, Liberty Mutual Insurance

Premier sessions — What’s New in Litigation Management and Pathways to Dynamic Leadership

networking events — CLM Rodeo and Disco Party

AwArd reciPient — Funds raised from the Golf Outing will be donated to the Semper Fi Fund, which provides financial support to injured members of the U.S. Armed Forces and their families.

Thank You Sponsors!With the generous support of our sponsors, the 2013 CLM Annual Conference promises to be the best CLM event yet! The Conference includes more than 80 collaborative sessions and several panel presentations featuring industry leaders.

DiamonD/EmEralD

GolD

SilvEr

PlaTinum

Record Retrieval • Processing • Production

C O R P O R A T I O N

T-SCAN

WCDEnvironmental & Construction

Claims Consulting

®

Evaluate. Negotiate. Resolve with confidence.

LitigationHUTCHINGS

®

Records & Reporting

CLM Annual Conference 2013 Spread.indd 2-3 2/26/13 11:23 AMLM Spring 2013.indd 15 3/1/13 1:51 PM


SPECIFICally SPEakInG | COnSTRUCTIOn

California law regard-ing the Peculiar Risk Doctrine has changed over the years and limited the liabil-

ity of general contractors and, as of 2005, landowners. Plaintiffs who are employees of a subcontractor often will attempt to circumvent the work-ers’ compensation exclusivity rule by suing the general contractor and/or the landowner for the injuries they sustained under theories of general negligence, negligence as to control of the job site and negligent hiring.

The California Court of Appeal recently gave general contractors a bit more solid footing for protection from liability for injuries to a sub-contractor’s employee. In Brannan v. Lathrop Construction Associates, Inc., a masonry subcontractor’s worker slipped on wet scaffolding, injured his back and brought a lawsuit against the general contractor, who failed to call a “rainy day” to protect against dangerous conditions from slippery surfaces. The Court ultimately granted

the general contractor’s motion for summary judgment.

Brian Brannan, an employee of sub-contractor Bratton Masonry, was hired by general contractor, Lathrop Construction to perform the mason-ry work under a written subcontract. Part of Bratton’s subcontract required it to comply with all state and federal health and safety requirements as well as Bratton’s and Lathrop’s safety procedures and to maintain a safety program on the site. Lathrop also hired other subcontractors under the same terms. Lathrop had an onsite project manager who managed the safety on site and Lathrop had the final say on coordination of the work at the site and could stop a subcon-tractor’s work for safety reasons.

The day of the accident, Bratton’s employees worked around scaffolding that was left by the plastering subcon-tractor, but were not working on the scaffolding. Bratton had a foreman on site the day of the accident who was responsible for safety; he also

had authority from Lathrop to call off work if he believed it was unsafe. Lathrop did not direct Bratton, its employees or foremen on how the masonry was to be laid. The question raised was whether Lathrop’s sched-uling of the masonry work before the framers had finished, and allowing the scaffolding to remain on the job-site contributed to the accident.

In most cases, the independent con-tractor is responsible for the safety of the workplace as it relates to per-forming their job. In this case, the court acknowledged that there are exceptions to this rule when a gen-eral contractor retains control of the conditions at the worksite. However, the retained control must contribute to the employee’s injuries. A general contractor contributes to an unsafe procedure or practice by its affir-mative conduct where the general contractor is actively involved in, or asserts control over, the manner of performance of the contracted work. Such control occurs, for example, when the principal employer directs

Can Delegating Jobsite Safety Responsibilities Preclude Liability?

By Brenda K. Radmacher and Linda Pretzel Roberts

No More Rainy Days?

LM Spring 2013.indd 16 3/1/13 1:51 PM


that the work be done in a certain way or otherwise interferes with how the work is accomplished. Omission or failing to act may constitute such an affirmative contribution, but it depends on the circumstances. If the practices of the employee were not affected by the retained control over safety conditions at the work-site, there cannot be a finding that the general contractor affirmatively con-tributed to the injuries.

The court found that Lathrop’s act of scheduling the work cannot subject it to liability. Since the general con-tractor never affirmatively directed the subcontractor’s employee’s work nor interfered with how the work was done, it could not be liable for Brannan’s injuries. In making this decision, the court extended protec-tion provided to general contractors.

Since both Bratton’s foreman and Lathrop had authority to stop the work, and Bratton’s foreman did not require any approval from Lathrop to do so, no liability for failing to stop the work could be found. In fact, since Bratton’s subcontract expressly delegat-ed Lathrop’s worksite safety responsi-bilities to Bratton without reservation, there was no negligence by Lathrop.

Non-Delegable Duties General contractors must be careful in getting too giddy over Brannan as non-delegable duties still attach to a general contractor for which they may be held liable. Duties imposed on a contractor by regulations are non-delegable. For example, in Evard v. Southern California Edison, the court was asked to determine wheth-er billboard owners violated a general industry safety order that required them to provide specific safety equip-ment. The court found that they might be liable if they breach regula-tory duties, regardless of whether or not it voluntarily retained control or actively participated in the project, as long as the breach contributed to plaintiff ’s injuries. However, the fact that there is a regulation does not

automatically mean a non-delegable duty is created.

To determine whether the nature of regulation creates a non-delegable duty, courts look to the language of the regulation. Specifically, whether the regulation states who must com-ply with it, that is, is compliance something that has to be achieved by the property owner, or can another individual be obligated to comply with the regulation? The main dis-tinction turns on whether compliance with the regulation is one that can only be achieved by the landowner, or if compliance is something that could be achieved by the general contractor. For example, in Evard, the safety pre-cautions for the billboard were some-thing that could only be achieved by the landowner because they were

constant, not something that was connected to construction or work that would normally be done by an independent contractor. Instead they were constantly needed for the bill-board. Conversely, in another case, court found that an OSHA regulation regarding certain activities around water lines on demolition sites did not create a non-delegable duty. This was in part because the regulation only pertained to preparation of the work site and work being performed when the subcontractors were present, as opposed to regulation of something on the site with a more permanent nature. Thus, the language and nature

of the regulation determines whether it imposes a non-delegable duty on general contractors.

Contractors should keep a keen eye on what potential regulations, stat-utes and ordinances, or other safety rules that may apply to the jobsite and ensure that the duties that are delegat-ed are clearly understood and acted upon appropriately by its employees.

Changing Claims HandlingFor the claims handler and risk manag-er, the Brannon decision requires some in-depth investigation and analysis of the relevant regulations affecting the incident. Additionally, the scope and extent of retained control should be analyzed closely. Did the general con-tractor direct work by the subcontrac-tors? Was any work directed or con-trolled by the general contractor such that it caused or allowed for the injury? These questions must be investigated to determine the potential arguments to raise as well as to review coverage obligations. When the subject policy is a wrap-up, OCIP or CCIP, the claims professional will also need to determine whether there is any potential conflict of interest requiring appointment of separate counsel for the subcontractor and general contractor. Additionally, issues of whether the claim may be sub-ject to a builder’s risk policy should be investigated.

Overall, the lesson learned from the Brannon decision is that a non-delegable duty may not be so clear. The language of the contract is criti-cal as is the role and involvement by the general contractor in controlling the work by the subcontractor. These highly factual issues may pose poten-tial hurdles for extricating parties on summary judgment but with careful analysis and investigation, summary judgment may still be obtained in many instances. LM

Brenda K. Radmacher is a Partner with Wood Smith Henning & Berman, LLP. Linda Pretzel Roberts is a Claims Analyst with American Safety Claims Services, Inc.

WHO’S lIaBlE?When determining liability on the part of the general contractor, ask these questions:

K Are there regulations that have been violated that contributed to the incident?

K Did the general contractor direct work by subcontractors?

K Did any work controlled or directed by the general contrac-tor contribute to the incident?

LM Spring 2013.indd 17 3/1/13 1:51 PM


SPECIFICally SPEakInG | EnVIROnMEnTal

Former manufactured gas plants (MGP) pres-ent continuing problems in the field of remedia-tion for most inner cit-

ies. Many insurance companies are feeling the historical effects of their insureds being sued by consortiums of adjacent and nearby residential property owners who contend that they had been affected by the con-tamination migrating from the for-mer MGP site.

Since most properties affected were constructed prior to the advent of Comprehensive Environmental Res-ponse, Compensation, and Liability Act (CERCLA) and did not contribute to the contamination found at the source site or on their property, the owner of the offending site was required to con-duct a remedial effort to prevent fur-ther pollution from emanating from their site and protect the adjacent and contiguous property owners.

Urban ProtectionContaminated soil and groundwater below these former MGP sites is typi-cally affected to great depths, requires significant remediation and threat-ens adjacent property owner sites. Due to the urban setting of most sites and site spatial and adjacent property owner constraints, contaminated soil removal from beneath the gas holder pads, where the source of the pollu-tion typically resides, is generally not a viable option. Therefore, engineering controls, such as deep cut-off walls, are required to protect human health and

the environment and prevent further impacts from occurring. Geologic constraints may limit the efficacy of these types of remedial efforts.

Pollution from former MGP sites is derived from coal tar and purifier waste, which consists of a mixture of organic chemicals that include vola-tile organics and semi-volatile organic compounds that are typically denser than water and tend to travel down-ward by gravity. These types of wastes present various types of environmen-tal problems, which can persist in the environment for many years after discharge. Exposure to the kinds of pollutants that constitute MGP waste byproducts are also known to be harmful to human health.

Geologic ConditionsAt many sites in northeastern urban areas, varying geologic conditions exist that may present particular prob-lems to successful remedial actions since many of the coal tar pollutants have traveled deep into the ground making it more difficult to reach and treat. In certain northeastern states many sites are underlain by strati-graphic units that consist of man-made fill, alluvial deposits, glacial deposits, and weathered bedrock at various depths below ground surface. Some former MGP sites located in northeastern areas can be underlain by multiple aquifer systems, some of which may be semi-confined and exhibit artesian conditions. To address these issues and prevent the further spread of pollution, deep cutoff walls

can be installed that can extended to great depths and effectively contain pollution from migrating laterally.

At one specific site in the New York City area, geologic constraints spe-cifically related to the man-made fill and the glacial till deposits (which contained a heterogeneous mixture of boulder size debris, boulders, grav-els, sand, silt and clay) required that a composite vertical barrier contain-ment wall consisting of shallow, rela-tively impervious, proprietary steel sheeting and an overlapping deep jet grouted soil cement barrier wall be designed and installed. The impervi-ous sheet pile barrier wall extended to an intermediate depth sufficient to penetrate the fill and glacial till. Overlapping relatively impervious soil cement columns, constructed using modified triple fluid jet grout-ing techniques, were installed extend-ing from five feet above the bottom of the sheet piles to depths greater than 100 feet below ground surface into the embedment stratum.

This type of containment barrier wall was designed to isolate the source material from contact with ground-water outside the wall and prevent lateral migration of contaminants. This remedial action was successfully installed and subsequently approved by governing regulatory agencies. This containment system served as an approved method of preventing the spread of pollution from the source to adjacent and nearby potential recep-tors such as residential structures.

Preventing the Spread of Pollution to Residential Properties in urban Areas

By Joseph J. Lifrieri and anthony R. Slimowicz

Containment Quandry

LM Spring 2013.indd 18 3/1/13 1:51 PM


Mitigating ClaimsThis situation is of interest to insur-ance claim professionals and attorneys because it describes one approach to mitigate the impact of potential claims or adverse litigation. Adjacent and contiguous property owners who were unaware of the potential impact from the source site, would have been able to ask for relief from the impacts of the pollution, potentially be reimbursed for loss of property value, poten-tially have their homes and property acquired by the offending entity, and/or insist upon the implementation of a remedy to correct the pollution.

Insurance companies that hold poli-cies for affected property owners and the affected property owners who were unaware of the potential pollution source at the time of purchase or pur-chased their property prior to the com-mencement of practices that caused the pollution by the responsible party, may have been entitled to relief available to them under CERCLA. CERCLA gives the federal government broad responsi-bility and control to identify and compel responsible parties to clean up releases or threatened releases of hazardous sub-stances that may endanger public health or the environment. Any entity that purchased a property and was unaware of and had no knowledge of the con-tamination at the time the property was purchased may be able to rely upon the “Innocent Land Owner” (ILO) defense provision of CERCLA liability provid-ing they exercised “All Appropriate Inquiries” (AAI) prior to purchasing the property and providing they complied with other provisions prior to or follow-ing the purchase of the property.

Brownfields LawIn 2002, the Brownfields Law amended CERCLA and clarified the AAI provi-sions. To satisfy the AAI provisions of CERCLA, the purchaser of the prop-erty post January 11, 2002, is required to perform “all appropriate inquiries” prior to purchasing the property. The purchaser may then buy the property and still comply with CERCLA’s limi-tation on liability provided by the new

definition. For contiguous or adja-cent property owners to comply with CERCLA’s limitation on liability, they must not be the source of the con-tamination found on their property, must have performed an AAI prior to purchasing the property and then pur-chase the property still not knowing or suspecting contamination on their property. The innocent landowner defense is similar to the defense for contiguous or adjacent property own-ers in that they must perform an AAI prior to purchase of a property and must purchase the site without know-ing, or suspecting, of contamination on their property.

A provision of the Brownfields Law directed the EPA to establish a regulation outlining standards and practices for conducting an AAI. The EPA prepared and promulgat-

ed the “All Appropriate Inquiries Fact Sheet”, dated April 2003 that lists 10 steps necessary to satisfy AAI compliance.

It is important to understand the pro-visions of CERCLA and comply with the Act’s provisions so that the prop-erty owner, insured or insurer enjoy CERCLA’s limitations on liability. A properly conducted EPA sanctioned AAI (due diligence) should be con-ducted on all property transactions. This is especially important in urban areas where multiple generations of property uses are typical and mask former site uses making reliance on visual inspections problematic. LM

Dr. Joseph J. Lifrieri is President of Warren Professional Services, LLC. Anthony R. Slimowicz is Counsel for O’Toole Fernandez Weiner and Van Lieu, LLC.

COndUCTInG an all aPPROPRIaTE InqUIRyAs outlined by the EPA, the 10 criteria for exercising All Appropriate Inquiries (AAI) prior to the purchase of a property are:

K The results of an inquiry by an environmental professional;

K Interviews with past and present owners, operators, and occupants of the facility for the purpose of gathering information regarding the potential for contamina-tion at the facility;

K Reviews of historical sources, such as chain of title documents, aerial photo-graphs, building department records, and land- use records, to determine previous uses and occupancies of the real property since the property was first developed;

K Searches for recorded environmental cleanup liens against the facility that are filed under federal, state, or local law;

K Reviews of federal, state, and local government records, waste disposal records, underground storage tank records, and hazardous waste handling, generation, treatment, disposal, and spill records concerning contamination at or near the facility;

K Visual inspections of the facility and adjoining properties;

K Specialized knowledge or experience on the part of the defendant;

K The relationship of the purchase price to the value of the property if the property was not contaminated;

K Commonly known or reasonably ascertainable information about the property; and

K The degree of obviousness of the presence or likely presence of contamination at the property and the ability to detect the contamination by appropriate investi-gation.

Source: All Appropriate Inquiries Fact Sheet, April 2003, www.epa.gov/brownfields/aai/index.htm.

LM Spring 2013.indd 19 3/1/13 1:51 PM

http://www.epa.gov/brownfields/aai/index.htm


Aviation. Transportation. Construction. LeClairRyan makes it a point to understand the industries we serve.

What makes LeClairRyan different from other law firms? We’ve moved away from the traditional model of strictly organizing

a law firm around common legal practices. Our firm – with 21 offices and more than 350 attorneys, 250 of whom are

dedicated to litigation – is organized by industry across our many practices and geographies. This helps ensure that we

know our clients’ businesses so we can be more readily aligned to address their specific industry and legal needs.

Automotive

Aviation

Banking

Community Associations

Construction

Energy

Entertainment

Healthcare

Hospitality & Tourism

Insurance

Manufacturing

Media, Internet & E-Commerce

Pharmaceuticals & Life Sciences

Real Estate

Retail

Sports

Technology

Telecommunications

Trucking & Transportation

Wireless Telecommunications

InDUSTRIeS we SeRve

WWW.LeCLAiRRyAn.Com

CALiFoRniA

ConneCTiCuT

mAssAChuseTTs

miChigAn

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neW yoRk

PennsyLVAniA

ViRginiA WAshingTon, D.C.

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

© 2013 LeClairRyan. All rights reserved.

here’s to themovers and shakers

Legal strategies. Business solutions.

13LCR1095-CLM_Print_Ad_Update-f.indd 1 1/24/13 11:57 AM

SPECIFICally SPEakInG | RETaIl, RESTaURanT and HOSPITalITy

While there is no legal duty to ren-der aid or assis-tance to another in peril, there

may be a strong moral and humanitar-ian obligation to furnish such aid and assistance. A number of exceptions to this rule exist, each of them premised on a special relationship between the par-ties. Parents, for example, have a legal duty to aid and assist their children. By virtue of their profession, police officers, EMTs and medical personnel have a legal duty to aid and assist those they are charged with overseeing.

In the world of retail and hospitality, business owners have a legal duty to render reasonable aid and assistance to their invitees. In the case of an ill or injured customer, the business owner has historically been required to do no more than give such first aid as he/she reasonably can, and take reasonable steps to turn the customer over to med-ical personnel. Giving the customer a bandage or ice pack and calling 911 are the types of things that often suffice in discharging this obligation.

Increasingly, however, suits have alleged that business owners have a legal duty to do more. In some cases, plaintiffs have argued that the business owner was required to perform CPR, administer oxygen or use an auto-mated external defibrillator (AED) to aid a sick customer. Fortunately, most of these cases are dismissed, but there has been a trend in recent years to pass legislation that some plaintiff lawyers

argue require precisely these kind of potentially life-saving activities.

The American Heart Association esti-mates that about 350,000 people die each year as a result of sudden cardiac arrest. In an effort to drive that num-ber down, many states have enacted legislation requiring AEDs in certain settings (e.g., schools, airports, health clubs). Most of these statutes require not just the device, but someone trained to use it. Typically, the statute will contain good Samaritan protec-tion for anyone who uses the device in attempting to save a life. The liabil-ity conundrum arises not when the device is used, but when it is not.

If, for example, a health club has the required AED and a trained employee on staff but the employee does not use the device because the customer appears to be breathing (AED con-traindicated), has the club violated a legal duty to use the device? Plaintiff ’s counsel argue yes, that the require-ment of an AED and trained employee carries with it the implied obligation to use the device. The club, however, argues no because the statute referenc-es good Samaritan protection for any-one who voluntarily uses the device. Simply put, volunteers volunteer, they do not discharge a legal obligation.

Commercial establishments are encouraged to check with counsel to determine whether there exists any emergency response legislation of this type. If not, then you will likely be able to defeat such claims. Even if you have

such legislation, you may still be able to get the case dismissed. Does it say that CPR must be administered or that the AED must be used? If not, you have the argument that no such duty exists because statutes that are in derogation of the common law must be strictly construed. Does your stat-ute contain good Samaritan protec-tion, using the words “volunteer” and/or “voluntarily” when providing such protection? If so, that is rather strong evidence that there is no duty to use the device (AED) or engage in the pro-scribed activity (CPR).

Legislation will continue to grow throughout the country, not just in the industries noted, but others as well. Commercial establishments are likely to see more creative arguments made that a “reasonable” response to an emergency can and should no longer be limited to just the rendering of first aid and calling of 911. Legislation that is passed, however well-intentioned to encourage good Samaritans to act in more sophisticated ways, should not open the door to increased liabil-ity for business owners. It is enough that they be required to provide the tools and training to render a volun-tary rescue. Anything more than that would improperly burden business owners with the kind of legal duties historically reserved for police and medical personnel. LM

Brian Heermance is a Partner with the New York office of Morrison Mahoney LLP. Richard Randazzo is the President of Invision/Brownyard Claims Management, Inc.

How Broad is the Duty To Aid Business invitees?

By Brian Heermance and Richard Randazzo

Emergency Response

LM Spring 2013.indd 20 3/1/13 1:51 PM

Aviation. Transportation. Construction. LeClairRyan makes it a point to understand the industries we serve.

What makes LeClairRyan different from other law firms? We’ve moved away from the traditional model of strictly organizing

a law firm around common legal practices. Our firm – with 21 offices and more than 350 attorneys, 250 of whom are

dedicated to litigation – is organized by industry across our many practices and geographies. This helps ensure that we

know our clients’ businesses so we can be more readily aligned to address their specific industry and legal needs.

Automotive

Aviation

Banking

Community Associations

Construction

Energy

Entertainment

Healthcare

Hospitality & Tourism

Insurance

Manufacturing

Media, Internet & E-Commerce

Pharmaceuticals & Life Sciences

Real Estate

Retail

Sports

Technology

Telecommunications

Trucking & Transportation

Wireless Telecommunications

InDUSTRIeS we SeRve

WWW.LeCLAiRRyAn.Com

CALiFoRniA

ConneCTiCuT

mAssAChuseTTs

miChigAn

neW JeRsey

neW yoRk

PennsyLVAniA

ViRginiA WAshingTon, D.C.

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

© 2013 LeClairRyan. All rights reserved.

here’s to themovers and shakers

Legal strategies. Business solutions.

13LCR1095-CLM_Print_Ad_Update-f.indd 1 1/24/13 11:57 AMLM Spring 2013.indd 21 3/1/13 1:52 PM

http://WWW.LECLAIRRYAN.COM


On December 13, 2010, the Federal Motor Carrier Safety A d m i n i s t r a t i o n (FMCSA) launched

its Compliance Safety Accountability (CSA) program. The centerpiece of CSA is the Safety Measurement System (SMS), which analyzes safety-based violations from inspections and crash data to determine a commercial motor carrier’s on-road performance. The SMS uses seven safety improve-ment categories called BASICs to examine a carrier’s on-road perfor-mance and potential crash risk and then assign a score to the carrier. The carrier is assigned a score from one to 10 in each category with ine

representing the lowest crash risk and 10 representing the highest.

By reviewing violations within each of the seven categories, the intention of the FMCSA is to identify high-risk behav-iors with a specific carrier and apply early intervention to minimize those behav-iors. However, the implications in doing so are heavy for carriers because CSA scores in all but two categories, Cargo-Related and Crash Indicator, are public. You can be sure that whenever a carrier is involved in a collision, a savvy plaintiff’s attorney will get his or her hands on a car-rier’s CSA score as early as possible.

Wading Through Though not made public, a carrier’s

Cargo-Related and Crash Indicator scores are not necessarily off limits to a potential plaintiff or counsel. By virtue of simple written discovery, the opposing side may be able to obtain this information. This may include requests for the Carrier’s Profile or any documentation related to any interven-tion assigned to that carrier. In some cases, a carrier may pose viable discov-ery objections to disclosing some or all information related to a specific acci-dent where certain scores may not be relevant or the request is overly broad.

Once the score is made available, the question then becomes what can the other side do with it? Alternatively, when a compliant carrier has a low

The Rising impact of Motor Carrier CSA Scores

By nicole Koppitch and Jerry Craig

What’s the Score?

SPECIFICally SPEakInG | TRanSPORTaTIOn

LM Spring 2013.indd 22 3/1/13 1:52 PM


score, the better question is, should the carrier offer its CSA score as a shield to liability?

Using CSA Scores The Federal Motor Carrier Safety Act Part 385 does not address the admis-sibility (or non-admissibility) of CSA scores. In fact, to date, there are no specific regulations, rules or statutes addressing the use and admissibility of CSA scores in litigation. Limited case law is split as to whether the scores are admissible under evidence rules. Likely, the admissibility of these scores will continue to be a case-by-case determination based upon the nature of the accident, the nature of the claims and the nature of the request.

Certainly when a carrier has a low CSA score, that score can play to the carrier’s advantage. Though a good score will not insulate a company from liability, compliance can be used to mitigate, or in some cases, absolve, negligent hiring, negligent entrustment, negligent reten-tion, negligent training and negligent maintenance claims against the carrier.

Further, a strong CSA score can assist a complaint motor carrier in defend-ing a claim for punitive damages, which requires a plaintiff to prove the carrier was reckless and/or wanton. Certainly a pattern of compliance within the BASIC categories supports the position that a carrier did not proceed with reckless disregard when it comes to hiring, retaining, super-vising and training drivers.

The PitfallsOf course, for every good score, there are those carriers with undesirable scores and plaintiffs looking to use those scores as a sword. In those cas-es, the best approach for a carrier is to dispute the reliability of the scores. Carriers should cite the FMCSA web-site, which includes a disclaimer in which it advises that a reader should not draw conclusions from the data displayed on the system. In fact, the FMCSA is clear that unless a car-rier has been issued an unsatisfactory safety rating, it is authorized to law-fully operate motor vehicles.

The methodology for determining CSA scores is routinely evolving and, in fact, as late as December 2012, the FMCSA had yet again posted new updates to its methodology in deter-mining scores. These revisions are based partly upon ongoing public comment and research. Probably the most problematic issue for carriers is that the CSA score does not consid-er fault when calculating the BASIC score for Crash Indicator. This means a carrier’s score for Crash Indicator will increase as the result of a colli-sion regardless of whether the colli-sion was avoidable or unavoidable.

All of these factors support the position that CSA scores are simply unreliable. Under Federal Rule of Evidence 403, carriers should argue that any probative value of a CSA score is far outweighed by the prejudicial value. Further, to the extent a plaintiff is attempting to offer CSA scores through expert tes-timony, Federal Rule of Evidence 702, expert opinions must be the product

of reliable principles. As reflect in the FMCSA disclaimer, CSA scores are not the product of reliable methods and principles. Rather, these scores are simply intended to assist the FMCSA in the early identification and interven-tion of potential problematic behavior.

Both Ways?The landscape right now is unclear. As the popularity of CSA scores continues to rise, ongoing litiga-tion as to the discoverability and admissibility should be expected. However, in the absence of any strong case law, carriers are in the best position to pick and choose when they might utilize CSA scores. Of course, carriers should do so with caution, as decisions being made on these issues will undoubt-edly play a significant role in the future of trucking litigation. LM

Nicole Koppitch, Esq., is an attorney with the Reminger law firm. Jerry Craig is an Excess Claims Supervisor with Baldwin and Lyons.

BaCk TO BaSICSThe Safety Measurement System seven safety improvement categories, the BASICs, are:

K Unsafe Driving

K Fatigued Driving (Hours-of-Service)

K Driver Fitness

K Controlled Substances/Alcohol

K Vehicle Maintenance

K Cargo-Related

K Crash Indicator

LM Spring 2013.indd 23 3/1/13 1:52 PM


SPECIFICally SPEakInG | InSURanCE COVERaGE

The use of indemnity and other risk-shifting clauses has become more prevalent in commercial contracts.

Typical indemnity clauses require one party (the indemnitor) to defend and indemnify another party (the indemnitee) from and against certain claims and liabilities. Other provi-sions may require the indemnitor to procure coverage for the indemnitee as an “additional insured” under the indemnitor’s liability policy.

Additional insured and indemnity clauses are frequently seen together in the same contract (for example, in construction contracts and vendor contracts), and one might be tempted to conclude that both clauses mean the same thing. However, contractual indemnity obligations and additional insured obligations are distinctly dif-ferent. Having the status of indemni-tee is not the same as being an addi-tional insured. There are important practical differences between these risk-shifting concepts that may affect

how they are processed under a typi-cal Commercial General Liability (CGL) policy.

Contractual Indemnity ClaimsThe insuring agreement in the typical ISO form CGL policy broadly covers claims for “bodily injury” or “prop-erty damage” caused by an “occur-rence” as those terms are defined in the applicable policy. This broad scope of coverage is reduced by vari-ous policy definitions, exclusions and conditions. One such exclusion is

insured Contract and Additional insured Tenders

By gary Tipton and Rob Moschet

Separate and Not Always Equal

LM Spring 2013.indd 24 3/1/13 1:52 PM


the Contractual Liability exclusion, which excludes coverage for damages that the insured becomes obligated to pay because it has assumed liabil-ity for such damages in a contract. Standing alone, this exclusion would prevent coverage for liability that the insured may have assumed as an indemnitor in a contract.

However, an exception to the Contractual Liability exclusion may, in a sense, reinstate coverage for cer-tain indemnity obligations that the insured has assumed by contract. If the indemnity obligation of the insured is contained in an agree-ment that meets the definition of an “insured contract” under the poli-cy, then the insured’s liability as an indemnitor may in fact be covered under the insured’s policy.

One important point to keep in mind when analyzing claims under the “insured contract” provisions of the policy is that the coverage for such claims is extended to the Named Insured under the policy, and extends to the liabilities that the Named Insured has agreed to assume in the insured contract. It is the Named Insured who tenders the indemnity claim to the carrier for coverage under the insured contract provi-sions of the applicable policy, and it is the Named Insured who is entitled to coverage under the policy.

Additional Insured CoverageA contract may require one party to a contract to procure and main-tain liability coverage for the ben-efit of another party as an Additional Insured, and this obligation may exist whether or not the party obliged to obtain and pay for such coverage has separately agreed to also indemnify the other party. The obligation to obtain Additional Insured coverage typically requires the Named Insured to take some sort of action to notify the insurer to add the Additional Insured to the policy of the Named Insured, may require the payment of a separate or additional premium for

the coverage, and is often evidenced by the issuance of an endorsement to the policy that adds the Additional Insured to the policy and which may further define or limit the scope of the coverage as stated in the endorsement.

If the Named Insured’s policy has been endorsed to add a party as an Additional Insured, the Additional Insured is entitled to the same rights and is subject to the same duties as an Insured under the policy as endorsed. Among other things, the Additional

Insured has the right and obligation to tender the claim directly to the carrier, and the carrier owes direct duties to the Additional Insured. Like the Named Insured, the Additional Insured may sue the carrier directly to enforce obligations owed to it under the policy.

The scope of additional insured cover-age is controlled by the specific word-ing of the endorsement. The endorse-ment may provide the same coverage as that afforded the Named Insured, but not necessarily. For example, (and as often happens with construction projects) the Named Insured may be covered for completed operations but the Additional Insured may not be covered. Some AI endorsements limit coverage to the specific coverage additional insured coverage specified

in a written contract with the Named Insured. And some endorsements specifically limit such coverage as excess over other coverage. In that case, the other insurance clauses of all policies potentially providing cover-age need to be reviewed to make sure any payments are apportioned to the appropriate policy.

Contractual IndemnityThe scope of the contractual liability coverage depends upon the specific obligations assumed by the Named

Insured in the insured contract and applicable law in the controlling jurisdiction. For example, some juris-dictions prohibit or otherwise restrict the ability of an indemnitee to be indemnified for its own negligence or other fault. And in some jurisdictions case law holds that a duty to indem-nify the indemnitee does not neces-sarily include a duty to also defend the indemnitee against claims, so the

The scope of additional insured

coverage is controlled by the

specific wording of the endorsement.

LM Spring 2013.indd 25 3/1/13 1:52 PM


contract must be reviewed carefully to determine whether the indemnity obligation also includes an obligation to defend. Further, contractual liabil-ity coverage under the typical CGL policy extends only to tort liability assumed in the insured contract, not to damages for breach of contract (for example, failure to perform the con-tract). Thus, both the specific indem-nity provisions in the underlying con-tract and the statutory and case law in the controlling jurisdiction must be considered along with the specific provisions of the Named Insured’s

policy when analyzing the carrier’s obligations to respond to claims ten-dered under the contractual liability coverage of the policy.

Contractual liability coverage is still subject to other exclusions, condi-tions and limitations contained in the Named Insured’s CGL policy. Liability assumed in an underlying contract is not automatically covered simply because it has been prospec-tively assumed by the Named Insured.

Defense Costs and Policy LimitsContractual liability coverage only covers defense costs of the indem-nitee if specifically required by the

indemnity agreement or applicable law. And, because indemnity and costs of defense (if any) owed by the Named Insured to the indemnitee are liabilities owed by the Named Insured, those obligations as well as direct liabilities of the Named Insured to other claimants may count against the Named Insured’s policy limits.

For an Additional Insured, defense costs are included in the coverage and do not count against the policy lim-its, unless the policy specifically states that defense costs are included within

the policy limits. Policy limits may be the same as the policy limits for the Named Insured, or as otherwise lim-ited in the applicable AI endorsement.

Contractual Indemnity and AI tendersDuties owed by a CGL carrier to its Named Insured for contractual indemnity obligations owed by the Named Insured to an indemnitee, and duties owed by a CGL carrier to an Additional Insured under the Named Insured are separate and distinct, even though certain obligations (like a duty to defend the indemnitee and a duty to defend the Additional Insured) may overlap. Where both contractual indemnity and AI tenders are made

arising out of the same occurrence, separate responses to each tender are required, and the obligations arising under the policy must be analyzed separately. In all cases, copies of the underlying contract containing the indemnity and AI obligations must be procured and carefully reviewed, along with the applicable CGL policy and all endorsements.

If the interests of the indemnitee or Additional Insured conflict with the interests of the indemnitor/Named Insured, decisions must be made about how best to handle the defense of the indemnitee or Additional Insured, if a defense obligation is owed. If the carri-er is satisfied with the defense afforded by counsel separately retained by the indemnitee or Additional Insured, a defense obligation owed pursuant to the indemnity clause or the AI clause in the underlying contract may be dis-charged by contributing to the costs of that defense. If the carrier desires to assign defense counsel, it may do so under the AI coverage (because in that case the AI is subject to the insur-ance contract which may provide for assigned counsel). But whether a car-rier may force a contractual indemni-tee to accept assigned counsel depends upon the wording of the indemnity clause. If the clause does not address the issue, it is questionable whether the carrier has the right to unilaterally assign defense counsel.

Because there are numerous issues and factors that arise in these situations, it is important to analyze each situa-tion carefully. Denial of tenders may expose the Named Insured to unin-sured breach of contract claims that, if the denial was wrongful, may in turn subject the carrier to bad faith claims. It is wise to consult with coverage counsel for specific advice in such matters. LM

Gary Tipton, AIC, AIM, AIS, CLU, CPCU, LUTCF, is a General Liability Claims Adjuster for North American Risk Services. Rob Moschet is an attorney with McCollum, Crowley, Moschet, Miller & Laak, Ltd. in Minneapolis.

Whether a carrier may force a contractual indemnitee to accept assigned counsel depends

upon the wording of the indemnity clause.

The power of many.

Diverse in approach, background, and knowledge. We are constantly adding the best attorneys to our firm. Where almost 40% of our partners are women and over 25% of our attorneys are minorities.

12 Western Offices. Over 100 Attorneys. It all equals a firm ready to make your case.

877-974-2529 www.wshblaw.com/diversity

Justice for you

LM Spring 2013.indd 26 3/1/13 1:52 PM

The power of many.

Diverse in approach, background, and knowledge. We are constantly adding the best attorneys to our firm. Where almost 40% of our partners are women and over 25% of our attorneys are minorities.

12 Western Offices. Over 100 Attorneys. It all equals a firm ready to make your case.

877-974-2529 www.wshblaw.com/diversity

Justice for you

LM Spring 2013.indd 27 3/1/13 1:52 PM

http://www.wshblaw.com/diversity


SPECIFICally SPEakInG | PROdUCT lIaBIlITy

For 600 years or more, the cedent-reinsurer relation-ship was based on mutual trust and a reciprocal duty of utmost good faith. The

reinsurer trusted that the cedent pro-vided accurate information on the risk and that the cedent would bill appro-priately for any given loss. In turn, the cedent trusted that a reinsurer would honor the agreement when presented with a claim. Each had a duty of full disclosure and veracity and the mutual perception was that there was little or no need to verify the other’s informa-tion. Due to financial pressures begin-ning in the 1970s, cedents and rein-surers started to protect their recipro-cal legal rights under the reinsurance agreement, just like parties to any other contract.

Duty of Utmost Good Faith The duty of utmost good faith is a reciprocal, heightened duty of good faith implied in reinsurance contracts since the earliest form of reinsurance. The duty requires that the insurer fully disclose every known material cir-cumstance of the risk that may influ-ence the reinsurer’s decision to accept the risk and set the premium because the insurer may readily ascertain the risk’s material facts and circumstances. The reinsurer is obligated to pay rein-surance claims that arise within the scope of the underlying policy as well as the reinsurance contract, absent a bona fide defense.

The duty arose from the high degree of mutual trust required to make a reinsurance agreement profitable

for both parties. Mutual profitabil-ity occurs only when the reinsurance premium is less than the insurance premium and the reinsurer can rely upon the cedent’s risk evaluation and proper handling of any claim, thereby eliminating the reinsurer’s costs of doing so.

The Modern Relationship For decades, commentators and courts alike have characterized a reinsurance contract as a gentleman’s agreement consummated with a handshake. The inherent mutual trust existed in the traditional relation-ships because the potential, profitable long-term relationship and harm to reputation for contesting bills out-weighed any single loss incurred by a cedent or reinsurer. Thus, historically,

The Ever-Evolving Cedent-Reinsurer Relationship

By Martin H alpert, Kim Hollaender and Thomas Storrer

Trust and Investigation

LM Spring 2013.indd 28 3/1/13 1:52 PM


reinsurers honored the agreements, typically without challenging a bill. When disputes arose, the parties often resolved their own disputes — sometimes over a two-cocktail lunch — rather than litigating.

The modern relationship is based on trust coupled with verification and is not necessarily bound by the customs that governed the traditional relation-ship. Unlike the traditional relation-ship, a reinsurer may verify claims or contest claims without jeopardizing its reputation or contradicting cus-tom. Protecting reciprocal legal rights instead of taking a loss for the sake of the relationship is acceptable and not contrary to custom. While the duty of utmost good faith remains, a reinsurer does not risk breaching that duty by

verifying a claim and asserting non-frivolous, legal defenses.

Various factors caused a change in the relationship. Cedents and rein-surers focused on profitability, if not solvency, in the 1970s and 1980s due to unforeseen large and long-tail toxic tort and environmental claims. Additionally, reinsurers started accepting more risks to increase cash flow, but without satisfactorily evalu-ating their capitalization. The result-ing undercapitalization reduced a reinsurer’s ability to absorb large or long-tail losses. Concurrently, insurers started to shop for bargain premiums, rather than remain with a reinsurer who required a higher premium. Like reinsurers, unforeseen losses and capi-talization problems prevented cedents from taking a loss for the relationship’s sake. Instead, cedents fought for full indemnification. Additionally, the use of managing general agents and inter-mediaries (i.e., brokers) for reinsur-ance agreements further undermined the traditional relationship. Cedents and reinsurers blamed real or per-ceived wrongs on managing general agents and intermediaries.

Game ChangerTransport Ins. Co. v. TIG Ins. Co. (TIG) portrays the modern cedent-reinsurer relationship and its effect on rein-surance customs and duties. In TIG, Transport argued, in part, that the rein-surers’ violated custom by asserting a statute of limitations defense when they denied indemnity of their share of a $26.6 million settlement. The appel-late court disagreed and asserted, “all issues are fair game” under the modern reinsurer relationship. The court dis-pelled any notion that the traditional cedent-reinsurer relationship exists or that the reinsurer is bound to customs that prohibit it from asserting valid legal defenses to indemnification.

Another lesson from TIG is that an obvious, basic element of a claim, such as the statute of limitations, may still be dispositive due to the evolving case law in reinsurance. At the time of TIG trial,

Continental Casualty Co. v. Stronghold Ins. Co., Ltd. was the controlling rein-surance case law regarding the statute of limitations, which held the statute of limitations does not start to accrue until the reinsurance claim is denied or, in the absence of denial, a reasonable time fol-lowing submission of the final proofs of loss if the reinsurer did not act upon the final proofs. Stronghold was decided in 1996, in the midst of the underlying cov-erage action, but before Transports action against it reinsurers. Therefore, non-issues may become issues, and vice-versa, over the course of a long-tail claim.

A reinsurer’s investigation of large and long-tail claims conducted in a coop-erative and ethical manner may not be necessarily detrimental to a relationship. A reinsurer’s investigation may promote the exchange of information and ideas, a key to successful claims programs. Moreover, a reinsurer’s investigation prior to claim payment or settlement may reduce the chance of litigation later. A reinsurer’s investigation should not be conducted in a way that could be con-strued as participation in the handling of the claim or as creating the appearance of an agent-principal relationship with all its accoutrements. LM

Martin H Alpert JD, CPCU, ARM, ASLI, ARe, CPD, is the President and CEO, Environmental and General Liability Consulting Group. Kim Hollaender, Esq. and Thomas Storrer, Esq. are attorneys with the firm Langsam Stevens Silver & Hollaender LLP.

The court dispelled any notion that the

traditional cedent-reinsurer relationship

exists or that the reinsurer is bound to

customs that prohibit it from asserting valid

legal defenses to indemnification.

LM Spring 2013.indd 29 3/1/13 1:52 PM


simp le k n ot(easy to unravel)

Gordian k n ot(hard to unravel)

Some problems are easy to solve. Others, like the Gordian knot, are more complex and require rare skill. That’s where we come in.

At RGL Forensics, our fi nancial experts are specially trained to unravel the most complicated accounting challenges to help our clients in commercial disputes. From damages assessment to valuation in commercial and insurance litigation, we help lawyers and insurance companies by looking beyond the numbers to uncover the fi nancial facts.

RGL Forensics. Delivering fi nancial clarity in complex litigation.

Call us at 888.RGL.4CPA or go to www.rgl.com23 Offi ces | 4 Continents | 1 Firm | rgl.comUnited States | Europe | Asia | Australia

SPECIFICally SPEakInG | dIVERSITy

At the CLM Leadership Forum held in December, Steven Plate, Deputy Chief of Capital Planning and

Director of the WTC Construction, The Port Authority of New York and New Jersey, addressed an audience of professionals from corporations, businesses, and the legal and insur-ance industries. Deputy Chief Plate shared his thoughts on the unique and special nature of the rebuilding efforts at the World Trade Center Site Redevelopment project, some of the challenges faced by the project team and the guiding princi-ples of leadership as he strives to complete a mas-sive construction project in one of the most urban areas in the country, if not the world. Highlights of the Deputy Chief ’s follow.

Huge ScopeThousands of men and women are working in Lower Manhattan each and every day to realize this “miracle in the making,” the redevel-opment of the World Trade Center site. There are 3,500 workers at the site each day and 26,000 employ-ees directly working on portions of the project. There are also more than 62,000 people affected daily by the project. This is one of the best and diverse teams ever assembled. The extended WTC team shows the dedication and resilience of the

American people and epitomizes the American spirit.

The WTC is a Rubik’s cube of not just finance, but also emotions, and is one of the most complex engineering projects on the face of the earth. Each month $200 to $250 million is paid out to vendors and contractors, total-

ing $2.4 billion in 2011 and about $2.5 billion in 2012.

Finding SuccessTo be successful in this project, we

needed focus around a common goal. Something people could embrace in their heart. Focusing on a common goal is critical. Ask your staff, what do you need? Whatever it takes, make sure you support your staff. Momentum starts to happen and success breeds success.

The challenge is to take away obstacles and get everyone

pulling in the same direction. Give people the proper envi-ronment and encourage them to talk to each other. It boils down to commu-nication. Empowerment is also key. Learn to be empowered. Lead, fol-low or get out of the way and move, move, move. If you stop, inertia sets in.

Then there’s the emo-tional part. This was our home, where we worked every day that

we lost. We’re rebuilding a city, a nation, really the

world. We have a fiduciary responsibility, a moral compass

that points due north, watching to make sure what we do is perfect

for those people.

What is most amazing when these events happen is people come togeth-er to make it better because of the resilience and commitment deep in their souls. What we are doing will leave a legacy that good will prevail over evil. LM

Director of World Trade Center Construction Addresses issues of Leadership

The Rubik’s Cube of Projects

LM Spring 2013.indd 30 3/1/13 1:52 PM

simp le k n ot(easy to unravel)

Gordian k n ot(hard to unravel)

Some problems are easy to solve. Others, like the Gordian knot, are more complex and require rare skill. That’s where we come in.

At RGL Forensics, our fi nancial experts are specially trained to unravel the most complicated accounting challenges to help our clients in commercial disputes. From damages assessment to valuation in commercial and insurance litigation, we help lawyers and insurance companies by looking beyond the numbers to uncover the fi nancial facts.

RGL Forensics. Delivering fi nancial clarity in complex litigation.

Call us at 888.RGL.4CPA or go to www.rgl.com23 Offi ces | 4 Continents | 1 Firm | rgl.comUnited States | Europe | Asia | Australia

LM Spring 2013.indd 31 3/1/13 1:52 PM

http://www.rgl.com

http://rgl.com


SPECIFICally SPEakInG | WORkERS’ COMPEnSaTIOn

It was so easier back in the day: Dad went to work from 9 a.m. to 5 p.m., sat at his desk all day, clocked out for his lunch hour, clocked in and finished his work

day. He was usually home by six for din-ner with the family. No after hour calls, no virtual office, no emails, no flying to a meeting and no weekend work. In turn, the compensability of an alleged work injury was usually clear-cut. With certain exceptions, injuries occurring off work premises, or not during work hours, or to and from an employee’s place of employ-ment were not compensable.

Jump forward into the tech world of 2013! The above scenario describes a

rapidly declining number of employ-ees in the workforce. The work envi-ronment is now vastly different than what it was 30 years ago, which rais-es several workers’ compensation-related issues.

The FactsNearly half of U.S. companies have employees working from home or on the road. And while accurate statis-tics are hard to wrangle since the term telecommuting covers a broad spec-trum of workers, it is estimated that 40 percent of employers now offer some form of telecommuting. A 2012 U.S. Census Bureau study entitled Home-based Workers in the United States:

2010 highlighted that the percentage of all workers who worked at least one day at home increased from 7 percent in 1997 to 9.5 percent in 2010. In the 1960s, the vast majority of home-based workers were primarily self-employed family farmers and professionals such as doctors and lawyers. As of 2010, pro-fessional and scientific industries, and education and health services made up the bulk of work-at-home individuals.

State workers’ compensation statutes, however, have not changed to reflect today’s working world. This leaves a gray area as to what is and isn’t com-pensable. By its nature case law in each state varies and companies are left to

Do Workers’ Compensation Benefits Go with Them?

By Trish Bellich, Bob Kopka and Lori zobler

Workers on the Go

LM Spring 2013.indd 32 3/1/13 1:52 PM


follow trends to guide them as to what meets the criteria for a covered work-ers’ compensation injury.

Categories of TelecommutersA uniform categorization of employ-ees who work outside a traditional office environment does not exist. Technology and policies are moving at a rapid pace with unclear dividing lines. What appears most logical is separat-ing workers into three different groups. The first group are the work-at-home employees who work in a home office the majority of the time. The second group is a mixed category of employ-ees who sometimes report to an office, sometimes work from home and may travel as part of their work duties. The third is road warriors, who do not have a stationary office. This group works in a multitude of locations.

At-Home Workers At its basic level, compensability asks whether an injury arises out of or dur-ing the course of employment. To test this, the causal connection between

a workers’ compensation injury and a risk connected with the employ-ment is examined. To determine if the injury occurred during employment, a variety of factors are considered, including the location of the injury and whether the worker was reason-ably fulfilling employment duties. Although some of the scenarios in the case law seem farfetched and fact specific, a consistent theme is a sur-vey of reasonable expectation and an examination of the risk involved.

One of the most cited cases on this top-ic involves a claimant who is a custom decorator who works at home one day a week and kept her samples in a van to regularly take on her customer calls. While the decorator was walking out her back door to her garage to change fabrics to the new line, she tripped over her dog and fractured her wrist. In that case, Sanberg v. JC Penney Co., the Oregon Court of Appeals looked at a work connection test and weighed facts such as the claimant regularly worked out of her home and was required to store the samples as a condition of her employment. The Court found that the home environment was the work envi-ronment meaning the risks of the home became the risks of the claimant’s work.

The Road WarriorFor road warriors, compensable inju-ries follow wherever the job takes them. Many states apply the continuous cov-erage doctrine. Under this doctrine, an employee is in the course of employ-ment when the injury has its origin in a risk created by the necessity of being away from home, except when a dis-tinct departure on a personal errand is shown. Cases involving road warriors have provided death benefits for the next of kin when a worker drowned during a layover and covered injuries sustained by a long-haul truck driver in a bar fight during a layover.

With the expanding global economy, employers are sending their workers abroad. These “special missions” may or may not be covered by the standard workers’ compensation/employers lia-

bility policy. This standard policy was meant to cover only the U.S., its terri-tories and Puerto Rico. A special policy can be bound if an employer has a large percentage of employees traveling out-side the U.S. Borders.

Minimizing RisksThe best advice for minimizing risks is to keep lines of communication open. Knowing where, when and how your workforce is tackling the world is a company’s best bet for minimizing risks. Comprehensive employee poli-cies that include no texting and driving rules, or outline forbidden activities can guide a mobile workforce while mini-mizing an employer’s workplace risk.

Workplace accidents will happen, but they can be minimized. Work with purely home-based workers to estab-lish a designated area, specific work hours and resources necessary to fur-ther their job so the employee does not create solutions that create risks for the employer. For hybrid employees, employment contracts that specifically outline job duties may reign in the zone of risk. For road warriors, consider pairing them up to keep them more engaged in the company and choose employees who are keen on travel, safety and possess common sense. Set a uniform standard of conduct to dis-suade employees from unnecessary activities. Don’t forget to conduct tra-ditional in-person meetings or telecon-ferencing with telecommuters to create face-to-face interaction, which can be invaluable in minimizing risk.

While new technology brings with it new challenges, companies should be proactive with policies and procedures to manage their mobile work forces. Trends show the mobile work force is on the rise and precaution is necessary to avoid increased workers’ compensa-tion costs. LM

Bob Kopka is the Managing Partner of Kopka, Pinkus, Dolin & Eads. Tricia Bellich is an attorney with Kopka, Pinkus, Dolin & Eads. Lori Zobler is the Director of Claims for BerkleyNet.

LM Spring 2013.indd 33 3/1/13 1:52 PM


SPECIFICally SPEakInG | PROJECT ManaGEMEnT

Three years ago, a 50-year-old management disci-pline — project man-agement — assumed a new identity within the

legal community — legal project man-agement (LPM). Within a few months, it made headlines on a regular basis as large law firms started creating Project Management Offices (PMOs). The fal-tering economy and the increasing trend of alternative fee arrangements acted as catalysts for this business approach. Many legal professionals began to refer to LPM as the paradigm shift or tipping point within the practice of law.

Today, early adopter law firms still con-tinue to use their PMO to manage mat-ters using LPM concepts. However, the vast majority of law firms are unsure whether LPM is right for them. Most of these point to lack of resources, imple-mentation costs and process complex-ity as their main deterrents.

At the CoreThe reality is that all law firms practice LPM within their organizations in one way or another. The role of LPM is to formalize processes and develop a sys-tematic matter management approach. The power of LPM lies within the fact that it builds a system that can be used to compare performance across the firm and over time. LPM is not an all-or-none approach. The imple-mentation of any project management environment is a multi-stage, iterative process. To that end, every step taken towards an LPM environment will bring associated benefits and standards

to the law firm. Law firms could begin using LPM processes within a division, or for a particular type of matter as a pilot. Usually, the firm will learn from the pilot and develop a stronger LPM model, which can be implemented across the entire firm.

Efficiency Not OverloadThe purpose of LPM is to develop a for-mal set of systems and processes. All too often, there is a tendency to develop a multitude of associated processes with little or no incremental value. Budget updates, work breakdown structures, status reports and Gantt charts can quickly become a burden, rather than a management tool. A good LPM implementation should always balance resource availability, process develop-ment and management benefit to ensure long-term sustainability of the solution.

Frequently, law firms are faced with situations in which some attorneys are over-utilized over many months, resulting in diminished work quality. An LPM system will make it easy for a law firm to choose, train and utilize appropriate resources. A review of staff-ing profiles versus outcomes for past matters can help determine synergies. It can also determine training needs amongst team members. An updated resource utilization plan can easily determine team member availability.

Happy Client (Happy Firm)In most instances, implementing an LPM system will result in satisfied cli-ents and profitable law firms. Imagine this situation. A client assigns an LPM-

equipped law firm to a new matter. The firm pulls up its risk register database for this type of matter. It reviews the risks and alternate scenarios associated with this type of matter, as well as out-comes for similar matters in the past. Based on the matter specifics, the firm can now build the workflow analysis, possible outcomes, most-likely sce-nario and a project plan to manage the matter. Indemnity and expense detail for past matters can also be used to determine the probable budget for this new matter, as well as the associated profitability for the law firm. Resource detail can be reviewed to determine the best-suited team for the matter.

The firm can share and discuss this plan and the associated budget with the client. After approval, this project plan can be used to keep the matter on schedule and within the budget. The transparency will help build trust between the law firm and the client. At the same time, the focus on plan and schedule will ensure minimum non-billable time and greater profitability for the law firm.

LPM is a very simple concept. However, the systematic imple-mentation of its concepts results in an efficient and profitable law firm, providing much-needed competitive advantage in this competitive envi-ronment. LM

Nicky Mukerji is the CIO of Legalbill, a Nashville-based Legal Spend Management company. Laura Farjadian is the Senior Intellectual Property Manager for Navico.

LPM (Legal Project Management) Picks up Speed

By nicky Mukerji and Laura Farjadian

Revving Up

Albany • Baltimore • Boston • Chicago • Connecticut • Dallas • Denver • Garden CityHouston • Las Vegas • London • Los Angeles • Louisville • McLean • Miami • New JerseyNew York • Orlando • Philadelphia • San Diego • San Francisco • Washington DCWest Palm Beach • White Plains Af� liates: Berlin • Cologne • Frankfurt • Munich • Paris

An Optimal Balance of Legal Excellence and Bottom-line Value

Wilson Elser is one of the United States’ largest insurance-focused law � rms with nearly 800 attorneys in 23 strategically-located of� ces nationwide.

Our insurance defense attorneys are among the most experienced in the country, even the world. We are especially proud of our track record of successful outcomes and equally proud of the cost-effective manner in which they are achieved.

At Wilson Elser, we understand the concepts, practices and intent of effective litigation management. It’s more than just a convenient catchphrase. Staffed with dedicated and experienced professionals, our Litigation Management Group takes great pride in meeting and exceeding our clients’ service expectations.

© 2012 Wilson Elser. All rights reserved.

WilsonElser_CLM-BalanceAd_AGK-GG-pc.indd 1 9/26/12 10:41 AM

LM Spring 2013.indd 34 3/1/13 1:52 PM

Albany • Baltimore • Boston • Chicago • Connecticut • Dallas • Denver • Garden CityHouston • Las Vegas • London • Los Angeles • Louisville • McLean • Miami • New JerseyNew York • Orlando • Philadelphia • San Diego • San Francisco • Washington DCWest Palm Beach • White Plains Af� liates: Berlin • Cologne • Frankfurt • Munich • Paris

An Optimal Balance of Legal Excellence and Bottom-line Value

Wilson Elser is one of the United States’ largest insurance-focused law � rms with nearly 800 attorneys in 23 strategically-located of� ces nationwide.

Our insurance defense attorneys are among the most experienced in the country, even the world. We are especially proud of our track record of successful outcomes and equally proud of the cost-effective manner in which they are achieved.

At Wilson Elser, we understand the concepts, practices and intent of effective litigation management. It’s more than just a convenient catchphrase. Staffed with dedicated and experienced professionals, our Litigation Management Group takes great pride in meeting and exceeding our clients’ service expectations.

© 2012 Wilson Elser. All rights reserved.

WilsonElser_CLM-BalanceAd_AGK-GG-pc.indd 1 9/26/12 10:41 AM

LM Spring 2013.indd 35 3/1/13 1:52 PM

http://wilsonelser.com


SPECIFICally SPEakInG | PROFESSIOnal lIaBIlITy

It has been reliably reported that mergers and acquisitions (M&A) related litigation is a significant problem for corpo-rate America. In fact, despite

fewer acquisitions in the contemporary economy, the percentage of deals that have spawned lawsuits has increased dramatically. Shareholder dissatisfaction with a perceived post-closing diminu-tion of value is one battlefield. Another is the buyer’s dissatisfaction with inevitable post-closing contingencies.

Transactional Insurance The insurance industry has in recent years developed and honed a suite of transactional insurance (TI) products.

These can provide an ideal risk man-agement solution to the deal-making community. The use of TI — even its consideration alone — can be the pro-verbial ounce of prevention. In a real sense, TI advances litigation manage-ment to the front-end by anticipating litigation’s inevitable cost and collat-eral damage, and by transferring that risk to the insurance markets so that litigation, ideally, never takes hold.

TI can also mitigate professional liability risk, demonstrating execu-tive due diligence by management, and advisory prudence by the out-side legal, accounting, insurance and financial team.

TI is a category of risk transfer agree-ments designed specifically to facilitate mergers and acquisitions, divestitures, and other organic business transac-tions. Among the most common types of TI available are:

u Representations and Warranties Insurance

u Contingent Liability Insurance

u Litigation Buyout Insurance

u Tax Indemnity Liability Insurance

u Liquidating Trust and Trust Liability Insurance

How Better to Manage Litigation Than to Prevent it?

By Joseph DePaul and Jonathan ziss

Transactional Insurance

LM Spring 2013.indd 36 3/1/13 1:52 PM


u Liquidation Insurance

u Specialty Management Liability Insurance

Representations and Warranties Insurance (RWI) RWI provides cover-age for the contractual indemnification obligations resulting from the breach of representations or warranties of the Seller. RWI can be purchased by the buyer or the seller. A seller-side policy can act to backstop the seller’s indem-nification exposure, shifting the risk to the insurer for a fixed cost. This risk transfer can enhance both the quality and scope of the indemnity cover, thus enhancing protection on both sides of the deal and facilitating its closure.

A buyer can also purchase RWI (or have it purchased by the seller). Examples of buyer-side covers include coverage beyond the survival period and/or cap under the purchase agree-ment; coverage where there would otherwise be no indemnification, as in a purchase of assets out of bank-ruptcy or a purchase of assets from a distressed seller; and, a cover intended to distinguish a bid in a competitive sale arena by reducing or even reliev-ing the need for seller indemnity.

Of course, RWI is not exactly a pan-acea. Purchase price adjustments, known issues, intentional conceal-ment and breaches of covenants will typically not be covered. Likewise, RWI will not extend to injunctive, equitable or non-monetary relief.

Contingent Liability Insurance (CLI) Unlike RWI, CLI covers known expo-sures or identified contingent liabili-ties. Examples include environmental clean-up costs, workers’ compensation tail exposure, and other risks more or less certain in fact, but uncertain as to both timing and value.

Litigation Buyout Insurance (LBI) This form of TI can be an ideal solution when the seller is either unwilling or unable to retain the potential liabil-ity inherent in litigation involving the

assets being sold. Where the buyer is likewise unwilling to assume such liabilities, LBI can be crafted to insure the exposure and thus clear the way for the transaction.

Tax Indemnity Insurance Potential tax contingencies arising from pend-ing or threatened audits, availability of net operating losses in a change of control, debt cancellation issues, and reserves for uncertain tax positions under GAAP (FIN 48) are among the more common tax contingencies that can dog or even derail an M&A transaction. These common exposures are well-suited to being underwritten

through TI, which can go considerably farther than a comfort letter toward keeping the peace.

Liquidating Trust and Trust Liability Insurance This solution has been devel-oped to address the unique exposures facing liquidating trusts and their trustees. In addition, the tax qualifica-tion insurance section of these policies can protect trusts (and indirectly their beneficiaries) from the financial expo-sures resulting from a disqualification as a liquidating trust.

Liquidation Insurance This solution can facilitate an accelerated termination or liquidation of a private investment fund by providing insurance for either iden-tified or unidentified contingent obli-gations that the fund managers believe must prudently be provided for by way of reserves or holdbacks.

Specialty Management Liability Insurance M&A activity often gives

rise to D&O claims, especially if the deal were to fail outright, or if there was an alleged failure to disclose mate-rial facts, or other fiduciary breaches. In this context, TI helps to demon-strate the directors’ and officers’ due diligence and transparency, both on the part of the buyer and on the part of the seller, which may be seen to have a duty to undertake reverse due dili-gence. Specialty management liability insurance provides for specific liability exposures faced by boards of direc-tors, management teams, fiduciaries, liquidators, trustees and transaction-related professionals in connection with a specific transaction or event.

Manuscript Policies It should come as no surprise that TI policies are careful-ly underwritten to meet the risk. This process takes time and considerable effort and energy, involving under-writers and other industry analysts, along with input from the would-be insured, well beyond a mere policy application form. Close coordination between the broker and client is essen-tial. The underwriting process may involve an up-front due diligence fee.

TI Can Prevent Litigation As should be readily apparent, TI can function like a minesweeper in a harbor, locating and removing potentially explosive con-tingencies. With TI in place, parties can proceed with greater confidence, so that more deals close. And, when they do close, the investors, owners, and those who advise them are well-positioned to demonstrate their pru-dence and due care attendant to risk management within the deal. Overall, the ever-present threat of litigation surrounding M&A activity is, by vir-tue of TI, dialed way back.

Put another way, TI not only lessens the likelihood of M&A related litiga-tion. It actually can prevent the seeds of discord from ever germinating. LM

Joseph DePaul is the Senior Vice President, Management & Professional Liability for Arthur J. Gallagher. Jonathan Ziss is a Partner with Goldberg Segalla LLP.

TI not only lessens the likelihood of M&A related litigation. It

actually can prevent the seeds of discord from

ever germinating.

LM Spring 2013.indd 37 3/1/13 1:52 PM



On July 31, 2012, the Missouri Supreme Court held that Missouri’s medical malpractice non-eco-

nomic damage cap was unconstitutional for violating the Missouri Constitutional right to a jury trial in Watts v. Lester E. Cox Medical Centers. The Watts opinion represents an about face for the Court, which had rejected the same constitu-tional argument in 1992.

In 1986, the Missouri legislature passed Chapter 538 governing tort actions for improper healthcare. The chapter limited non-economic damages to $350,000 “per occurrence…from any one defendant” with an annual adjustment for inflation.

Setting the CapIn the 1992 case, Adams By and Through Adams v. Children’s Mercy Hospital, an 8-year-old girl went into cardiopulmo-nary arrest and suffered permanent, severe brain damage caused by a series of errors during a skin grafting surgery. The verdict against five different pro-viders included non-economic damag-es in excess of the cap and the trial court accordingly reduced the non-economic damage award. Plaintiffs appealed and challenged the constitutionality of the cap on the basis of equal protection and the right to a jury trial. The Court rejected both arguments.

However, a series of Missouri Court of Appeals opinions eroded the cap

beginning in 2002 when the Court construed that there were two caps against a hospital defendant where the patient was injured by two “occurrences” of malpractice by two different physicians. This opinion introduced the concept of apparent agency to the medical malpractice arena in Missouri and held that the hospital was liable for a second cap for the conduct of an independent contractor radiologist where the patient believed the radiologist was affiliated with the hospital. This opin-ion led Missouri claimants to contend that each encounter with a defendant physician potentially constituted an “occurrence” allowing a separate cap for every such encounter.

The End of the Med Mal Cap Era or the Start of the Next Chapter?

By Jeff Brinker and Marta garrett

What’s Next?

LM Spring 2013.indd 38 3/1/13 1:52 PM


It appears that a non-economic damage cap for a wrongful death medical malpractice case in Missouri is

constitutional, but a cap in a common law

medical malpractice case is not.

The cap was further eroded in two 2004 cases that held a doctor and his employer were separate defendants so more than one cap applied, and that a loss of consortium claimant was enti-tled to a separate cap despite the con-sortium claim being derivative.

By that time, the non-economic damages cap had increased to about $600,000 after adjustments for infla-tion, and the legislature responded to the developing caselaw and the increased cap by amending it as a part of Missouri’s 2005 comprehensive tort reform. The non-economic damage cap under the revised law provided that no plaintiff could recover more than $350,000 regardless of the num-ber of defendants (with no inflation adjustment). The amended statute abolished apparent agency for purpos-es of the cap, abolished a second cap for consortium claims, and provided that wrongful death claimants were considered collectively as one plaintiff.

Put to the TestA trilogy of Missouri Supreme Court

opinions in 2012 considered the con-stitutionality of various damage caps in Missouri. In the first case, the Court held that Missouri’s punitive damage cap was constitutional in a statutory cause of action, Missouri’s Merchandising Practices Act. On April 3, 2012, the Supreme Court applied the same ratio-nale to find that the pre-2005 medical malpractice cap was constitutional in a wrongful death medical malpractice claim. Wrongful death is a statutory cause of action in Missouri. The Court upheld the lower court reducing the non-economic damages and rejected constitutional arguments based on an alleged violation of the right to jury trial and separation of powers. With respect to the right to a jury trial, the Court repeated that the legislature had authority to choose what remedies would be permitted under a statutorily created cause of action.

Watts presented the issue of whether a damages cap was constitutional when applied to a common law cause of action. The Watts case involved the birth of an infant with catastrophic brain injuries. The allegations were that the physicians and clinic failed to detect or react to decreased fetal move-ment. The jury had assessed non-eco-nomic damages at $1,450,000, which the trial court reduced to $350,000. In a 4-3 opinion, the Supreme Court held that the cap infringes on the jury’s constitutionally protected purpose of determining the amount of dam-ages sustained by an injured party. The Court argued that such a limitation was not permitted by common law when Missouri’s Constitution was first adopted in 1820, and therefore the cap violated the right to a trial by jury.

The Supreme Court acknowledged that the doctrine of stare decisis pro-motes security in the law by encour-aging adherence to previously decided cases, but decided that Adams inter-pretation of Missouri’s constitutional guarantee to a right to jury trial, and all the subsequent cases that relied on Watts were flawed. The Watts Court used a multi-prong attack to find that

Adams was decided incorrectly. The Court disagreed with the Adams rea-soning that the legislature has the con-stitutional power to create and abolish causes of action and can therefore limit recovery in those causes of action, stat-ing that such rationale would make con-stitutional protections of only theoretical

value that would exist unless and until limited by the legislature.

For now, it appears that a non-eco-nomic damage cap for a wrongful death medical malpractice case in Missouri is constitutional, but a cap in a common law medical malpractice case is not. Watts certainly seems to provide a road map, if not an outright invitation to the legislature to amend the Missouri statute that adopts the common law to create an exception for a statutory medical malpractice cause of action thereby paving the way for the introduction of another cap. LM

Jeff Brinker is an attorney with Brinker & Doyen, LLP. Marta Garrett is a Claims Specialist with ProAssurance.

LM Spring 2013.indd 39 3/1/13 1:52 PM



“How could this have hap-pened,” the broker won-dered. He

had been in business for over 20 years without one complaint and now his largest client, a plumbing subcontrac-

tor, is telling him that it is being sued for failing to provide a proper addi-tional insured endorsement. His larg-est company market is telling him that it is being sued for denying coverage to a purported additional insured and would look to the broker for its losses, and on top of it all he was being sued

by a developer that he had never even heard of, claiming that he should have provided a completed operation addi-tional insured endorsement on the plumber’s CGL policy.

How could this have happened? The answer is that it can happen easily, and

Navigating Broker Exposure and Additional insured Endorsements

By Michael Leahy and Larry Beemer

The New Frontier

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it’s happening all the time these days as more and more general contrac-tors and developers are either going bare, or retaining significant risk on the front end through self-insured retentions. In virtually every subcon-tract entered into between a general contractor/developer and any subcon-tractor trade, there are two risk trans-fer provisions found. First, an indem-nity provision, and second, a provision requiring the subcontractor to name the general contractor/developer as an additional insured on its general liabil-ity policy. Because many jurisdictions are adopting additional insured stat-utes, additional insured endorsements are becoming more important. Often, the contract will specify the exact type of endorsement called for and in most instances that specification will be for an endorsement that provides com-pleted operations coverage.

Growing PressureOver the years, brokers and agents have had tremendous pressure put on them especially in the construc-tion area to provide certificates and additional insured endorsements for their clients. Many brokers and agents have been provided with the actual wording required in the endorsement, generally requiring completed opera-tions coverage and a primary other insurance provision. While issuing these endorsements for a client who is required by contract to provide one may seem easy, it often creates tre-mendous coverage issues down the road for the carrier on the risk as well as the broker agent.

The law is fairly uniform that insur-ance brokers owe a limited duty to their clients, which is to use reason-able care, diligence and judgment in procuring the insurance requested by an insured. The insurance broker will generally not have any liability for failing to procure a specific kind of insurance unless the broker misrep-resented the nature, extent or scope of the coverage provided, or there was a request or inquiry by the insured for a specific and particular type and extent

of coverage, or if the broker assumes the additional duty by either express agreement or by holding himself out as having expertise in a given field of insurance being sought by the insured. In this area, a broker can find himself in hot water in any of the three excep-tions to the general rule.

Be AwareA broker who holds himself out as having expertise will be held to a high-er standard of care. In determining

whether a broker has held himself out as having expertise, courts will gener-ally look to the broker’s knowledge or history with the insured and his or her representations to the insured in that respect, the extent of the information the insured has provided to the bro-ker, the relevant sophistication of the insured and the extent of its reliance on the broker.

A common mistake made by brokers occurs when the insured either spe-cifically requests a type of coverage or the broker has been provided a copy of

the subcontract that calls for a specific type of endorsement. Failure to obtain that specific coverage when provided a copy of the subcontract can expose the broker to liability not only to his client, but also to the intended third party beneficiary general contrac-tor. In general, the court is likely to find that the broker could reasonably foresee the risk of harm to the gen-eral contractor if the broker did not place the coverage called for in the subcontract. And worse, in certain

instances, the broker’s action can bind the insurer, creating coverage out of thin air. The case law nationwide does suggest, however, that a duty to obtain requested coverage may not arise if the insured’s request is not specific. An insured’s request for “sufficient cover-age,” and an agent’s assurance that the policy provided “adequate” coverage will not subject the broker to liability for failing to obtain the coverage the client wanted.

A broker can face liability to its carriers as well. In general, broker agreements

STayInG OUT OF HOT WaTERAn insurance broker is open to liability if:

K He or she misrepresented the nature, extent or scope of the coverage provided.

K There was a request or inquiry by the insured for a specific and particular type and extent of coverage that was overlooked.

K The broker assumes the additional duty by either express agreement or by hold-ing himself out as having expertise in a given field of insurance being sought by the insured.

LM Spring 2013.indd 41 3/1/13 1:52 PM


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with a carrier do not provide the bro-ker with any binding authority over the carrier. Conversely, agency agreements will have some binding authority with certain parameters built into the con-tract. In many cases, the broker was never given authority by the carrier to issue these endorsements or if they were given authority it was for a spe-cific endorsement such as an additional insured that only provides coverage for ongoing operations.

It has become commonplace for the staff at a brokerage to issue addi-tional insured endorsements and it is

not unheard of to see an additional insured endorsement containing the cut and pasted signature of a carrier president or CEO who has not been around for years!

These endorsements are and have been issued at an alarming rate over the years and many times the car-rier has never been sent a copy of the endorsement for its underwriting file. Since the carrier has no documenta-

tion of this endorsement, it has no idea of the risk it unwittingly and like-ly unwillingly assumed, which causes insurers significant problems. When faced with this issue, questions arise about whether the broker had binding authority, and if not whether osten-sible authority can be proved. If the underwriting staff told the broker on multiple occasions that it was OK for it to issue additional insured endorse-ments without sending copies, osten-sible authority could be created by this practice. Single grants of authority will not usually create ostensible author-ity. All of this is dependent on the evi-

dence in an individual case and, ulti-mately, a judge’s views on the subject — a risk not many wish to take.

Current IssuesIn the past, before the days of huge expenses for additional insured claims, underwriters would routinely provide this authority to broker/agents. Now this is not the case and presents real issues between carriers and their busi-ness partners broker/agents on how

these matters are to be resolved. The issuance of additional insured endorse-ments without the carrier authority is now creating very difficult situations for the carrier. For instance, while there may be no written authority in the bro-ker/agency agreement nor has there been any ostensible authority estab-lished, there are certain states that indi-cate the carrier must stand in the shoes of the broker/agent. In other states it depends on the wording of the contract between the carrier and broker/agent.

These issues are increasingly of major concern for carriers, who realistically have three choices:

u Handle the additional insured claim as usual and do nothing with the broker/agent. This approach usually occurs with a major business produc-er for a carrier who does not want to lose accounts due to one claim.

u Handle the additional insured claim as usual and then sue the broker/agent.

u As soon as the issue with the addi-tional insured endorsement is real-ized, the carrier would immediately put the broker/agent on notice of claim and ask it to tender the mat-ter to its E&O carrier.

The last two options will create sig-nificant business issues with a broker/agent. However, the broker/agents sta-tus with the carrier can significantly drive how a carrier will proceed. As the economy has gotten worse, carri-ers have less margin to absorb these types of cases and are less hesitant to pursue the broker/agent.

In today’s marketplace, brokers and agents face more risks than ever. The placement of additional insured endorsements is only one such risk, but a very large one. LM

Michael Leahy is a senior partner at the California firm of Haight, Brown & Bonesteel. Larry Beemer is a National Claim Director for Fireman’s Fund Insurance Company.

Issuance of additional insured endorsements without the carrier authority is now creating

very difficult situations for the carrier.

LM Spring 2013.indd 42 3/1/13 1:52 PM

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Over the course of your career as a claims professional, hun-dreds of complaints have made their way

to your desk, but this one is different — it names your employer, an insurance company, as a defendant. The plaintiff alleges seven figure damages for legal malpractice purportedly committed by the time-tested panel counsel who you appointed to defend a claim, and seeks to hold your employer vicariously liable for every penny of loss. Your first thoughts are: this must be some sick joke or one wicked nightmare.

Well, although such suits are rela-tively rare, they are not unheard of.

Under the right (or wrong) circum-stances, these claims can have legs. The good news is that there are steps that you can take to reasonably insu-late yourself and your employer from this scenario.

Vicarious LiabilityNegligence claims are generally pred-icated on a defendant’s own acts or omissions. The doctrine of vicarious liability, which imposes liability upon a defendant for another person’s fault, however, rests on the theory that cer-tain relationships give rise to a duty of care, the breach of which is viewed as tantamount to the defendant’s own fault. A classic example of a relation-ship that will give rise to vicarious lia-

bility is that of employer and employ-ee. Vicarious liability also is typically imposed on principals for the acts of their agents within the scope of the agency relationship.

The primary rationale for imposing liability upon an employer rests on the employer’s presumed ability to con-trol and supervise employee conduct. Indeed, the common law distinction between employees and independent contractors, whose wrongdoing gen-erally does not impose liability upon those who hired them, rests on the fact that an employer cannot super-vise or control the work of an inde-pendent contractor in the same man-ner as an employee.

Reducing Exposure to insurer Liability for the Acts and Omissions of Defense Counsel

By Robert Jones, Robert J. Bergson and Brett L. Kuller

Protect Yourself

LM Spring 2013.indd 44 3/1/13 1:52 PM


What’s the Relationship?In the context of the tripartite rela-tionship between insurer, insured and attorney, the question is — what stan-dard of liability do courts impose upon insurers regarding the performance of counsel that insurers engage to defend insureds? Is it master and servant, prin-cipal and agent, or independent con-tractor? The answer varies by jurisdic-tion. For example, Alabama, California, Florida, Massachusetts, New York, North Carolina, Pennsylvania, Texas and Washington each generally treat retained defense counsel as indepen-dent contractors. Courts applying the “independent contractor” rule offer some variation of the following three rea-sons for doing so. First, an insurer’s duty

to defend its insured is delegable by its very nature. In fact, most states prohibit insurance companies from practic-ing law, which necessarily requires an insurer to rely on outside defense coun-sel to defend claims. Second, since the paramount interest of defense counsel is that of the insured, not the insurer, imposing vicarious liability upon an insurer would put it in the untenable position of being prohibited from controlling the defense or the deci-sions of defense counsel, yet charged with liability for defense counsel’s overall management of the defense. Finally, courts that apply the inde-pendent contractor rule note that an insured is not left without a remedy for defense counsel’s claimed incom-petence because appointed counsel is not insulated from direct liability to the insured for wrongdoing.

States that impose a vicarious liabil-ity standard upon insurers, such as Alaska, Iowa and Oregon, generally reason that the insurer is responsible for the attorneys it selects to discharge the insurer’s duty to defend. Generally speaking, in jurisdictions that apply a vicarious liability standard it may be implied or assumed that the insurer exercised control over critical aspects of the defense, or that defense counsel held the interests of the insurer para-mount to those of its client.

Independence of Defense CounselThe paramount takeaway from a sur-vey of cases in the field, regardless of the standard applied, is that an insurer would be wise to respect the line that separates effective claims management and interference with defense counsel’s defense of claims. While this conclu-sion may seem somewhat obvious, it is important to remain vigilant in respecting that line, particularly with regard to three stages or events that arise during the course of most liti-gated matters: settlement, expert dis-closure and client requests.

A claims professional who engages in settlement negotiations without the

input of defense counsel, or worse, addresses settlement in a manner that contravenes or ignores the advice of defense counsel, risks a liability or bad faith claim, even in jurisdictions that apply the independent contractor stan-dard. The same applies to the retention of, or refusal to retain, expert witnesses inconsistent with defense counsel’s advice and recommendations. The more a claims professional impos-es him or herself on the day-to-day defense decision-making process, the greater the risk of exposure to vicari-ous, or even direct, liability claims.

Finally, do not be dismissive of client requests — situations where the client is requesting defense counsel to take a course of action that the claims profes-sional thinks may have a low likelihood of success. If the insured’s request is denied and creates the impression that, but for the insurer’s objection to the costs involved, defense counsel would have acceded to the request, it may plant the seeds for a claim against the insurer. The best way to manage these requests is to keep an open dialogue with defense counsel. Often there are reasons for not taking a course of action that an insured is advocating that have nothing to do with cost. If you discuss facts and over-all strategy with defense counsel, and defense counsel does the same with its client, the likelihood of reaching a deci-sion where all parties to the relationship are on the same page increases. Whether the insured’s request is carried out or not, the exposure to a claim for vicari-ous liability will often rise or fall with the level of communication between insur-er, defense counsel and the insured. To lower the risk of exposure to a claim for vicarious liability, remain ever vigilant of the line between independent and controlled counsel, document and, most importantly, keep those lines of commu-nication open. LM

Robert Jones is Global Head of Financial Lines, Specialty Claims at AIG. Robert J. Bergson is Partner at Abrams Garfinkel Margolis Bergson, LLP. Brett L. Kuller is an associate at Abrams Garfinkel Margolis Bergson, LLP.

LM Spring 2013.indd 45 3/1/13 1:52 PM

What’s hotCurrent Trends and the Future of Litigation Management

LM Spring 2013.indd 46 3/1/13 1:52 PM


Like any industry, litigation man-agement experiences its wave of trends, improvements and well-intentioned ideas that don’t pan out. What’s happening in the

industry now that is going to take it to the next level? In what areas should the industry focus to meet the challenges that lie ahead?

It’s TechnologicThe industry has come a long way from paper files and Dictaphones, but where is it headed? John McGann, former Chief Claims Counsel for OneBeacon, sees technology bringing all parties involved in litigation management closer together. “We need to get law firms and clients on the same technology platform so they are sharing files and information. While some are doing that through various other platforms, there’s no real system designed specifically to enable both outside coun-sel and claims or litigation management staff to share their case information and have more active and timely collaboration,” says McGann.

McGann’s vision streamlines the case manage-ment so that all parties involved have easy and real time access to the information and updates they need to fulfill their role in resolving the matter. “In a perfect world, everyone involved would be noti-fied when there was an update on a case. Even bet-ter, they would receive a daily email digest high-lighting any updates or developments that were made that day,” says McGann. “It would be such a time saver as everyone could do their job and keep each other informed electronically.”

“There is also a big opportunity for technology to assist in the timely resolution of cases. While the vast majority of cases settle before trial, most would agree that those settlements could and should have been done in a more timely fashion. The case resolution process, particu-larly the negotiation phase, could be favorably affected by technology. Online bargaining tools could be one example.”

Operations — Not a GameAlong with paper files and many of the other old school tools of the trade are the same old orga-nizational structures and operating procedures. Mike Daly, Attorney with XL Specialty Insurance Company, has observed dramatic differences in in law firm operations. “So many firms today are centralizing their backroom operations to mini-mize costs,” says Daly. “There’s also an emer-gence of a career track for attorneys who stay off

the partner track and focus on client work. In some firms, they are doing the bulk of the work billed to the client before it is passed on to the partner. It’s an efficient use of time and resources and most definitely a response to the challenge of keeping legal costs down.”

Companies continue to employ process improve-ment strategies to reengineer their operations. “So many companies are using Six Sigma and other process improvement strategies,” says McGann. “It’s a great way to really look at operations and determine the best way to do something. For so long, as an industry, we just did things the way they’ve always been done. But in the past decade, we’ve been embracing opportunities to look at operations in a new way, and find the best, most efficient way to do things. Much of that was driven by the need and the desire to contain costs, but the offshoot of those efforts is that we are utilizing our resources better. ”

Data is KingFor Domenick DiCicco, Head of Legal Strategy for AIG, data has played a key role in the posi-tions he’s held since the early 1990s. “Back then, I was a trial attorney in Philadelphia and I had cli-ents asking me to help them manage their legal spend,” says DiCicco. “It was eye-opening to see how and where their dollars were going. Over the years, I’ve been able to gather and analyze data to improve operations. It started with look-ing at ways to streamline operations and save money. When I was at Zurich, we determined that we could save money by bringing our some of our legal work in house. That doesn’t seem like a futurist idea now, but when we did it, you didn’t see a lot of companies with staff counsel. So, what’s on the horizon for us now that may seem like a novel idea today, but years from now will be standard operation procedure?”

That certainly is the question. Without the benefit of a crystal ball, but with the benefit of something perhaps even stronger — knowl-edge and insight — today’s industry leaders are dreaming up the next industry advances.

Other companies are using litigation metrics to manage business by examining four key areas: financial, customer service, operations, and learning and growth. It is important to have spe-cific objectives for each area, such as eliminate unnecessary legal expenses, dispose of cases as quickly and cost effectively as possible, improve early case assessment and reserving practices.

LM Spring 2013.indd 47 3/1/13 1:52 PM


Having a defined structure and goals helps determine what data is needed to assist in reaching those goals. When the exact set of data needed does not exist, look to e-billing and matter man-agement data. If that particular data is crucial to operations, develop a strategy and process to capture and analyze that data.

“With the introduction and better use of more focused analytics, the role of the claims professional will shift,” says Krista Glenn, Senior Vice President, ACE North American Claims. “We’re putting data to work so we can prove what we often know in our gut. It’s not unusual to see a claim and know instinctively what it’s worth and how long it typically

takes to resolve just because of personal experience. With predictive analytics, we can confirm those instincts and potentially move toward a quicker resolution.

Fee StructuresDiCicco uses his data extensively to arrange alternative fee arrangements with his outside counsel. “The best tool for cre-ating a good AFA is data specific to the line of business, geog-raphy and case value. When you look at that information, you can create a flat fee arrangement that’s a win-win for the company and the firm,” says DiCicco. “It’s not our goal to put law firms out of business. We want them to succeed just as we want our company to succeed. It’s more a matter of aligning interests. Hourly rate billing does not align interests. It creates an incentive for the firm to spend more time on a case, when what we want is the best and quickest resolution possible for each matter. When we can all look at data and see how long a certain type of case should last and at what ballpark amount it should be resolved, we can easily price that kind of case. It makes our legal spend more predictable and gives the law firm a framework in which to work and incentive to reach a good resolution quickly.”

Staffing UpAll these industry changes have certainly led to differences in company hiring and training practices. There’s an underlying

change in what employers need in terms of competency from staff. With the increased use of data, staff needs to be able to understand analytics and put the data to work. It’s not a mat-ter of relying solely on data to make decisions, but a matter of knowing how to use the data to help make those decisions, what data to collect and how to implement change when the data shows that change is necessary.

Bringing in fresh talent to the industry is also a challenge. “There are just not a lot of new people coming into the business,” says Glenn. “We need to adjust as an industry to attract new talent. The younger generation does not think and work like many of us more experienced professionals. We need to figure out how to get the most out of them, and that may require some modifi-cations in some of our hiring and training processes.”

Addressing diversity in the industry is another impor-tant topic. “Today’s reality is that the majority of litigators are male,” says Daly. “The same is true, even more so, with mediators. We need to continue to focus on diversity initia-tives that attract and encourage a more diverse population of professionals.” LM

ClM annUal COnFEREnCE PREVIEWWhat’s new in Claims and litigation Management a Conversation with Senior Executives

The opening session on Thursday of the CLM Annual Conference will be addressing the topics covered in this article and much more. The Session’s panel includes:

K Dorothy Capers, Associate General Counsel, U.S. Foodservice

K Mike Daly, Global Practice Leader for Liability Claims, XL Specialty Insurance Company

K Krista Glenn, Senior Vice President, ACE North American Claims

K Max Koonce, Senior Director Risk Management, Wal-Mart Stores, Inc.

K John McGann, Former Chief Claims Counsel, OneBeacon

K Preston McGowan, Vice President and Manager, Chubb’s Claim Litigation Management Unit

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Without the benefit of a crystal ball, but with the benefit of something perhaps even stronger — knowledge and insight — today’s industry leaders are dreaming up the next industry advances.

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For some, the annual performance evaluation process is akin to the proverbial trip to the dentist. It delivers mostly discomfort with little visual benefit. However, effective workplace performance management programs provide a

true collaborative opportunity for both the employee and their supervisor to reflect upon and examine the efforts of the past year. The process ensures that mutually defined goals have been met and that appropriate development areas have been identified for both individual professional growth and enhanced organizational benefit. Similar benefits can be derived from client review of law firm services.

Bridging the GapThe need for an effective feedback process is vital in the cli-ent/counsel relationship. However, all too often, the scenario

unfolds like two ships passing in the night. The client, busy with multiple tasks to juggle and limited resource capac-ity, expects its firms to automatically know its business and desired outcomes. For most firms, with a primary focus on their busy law practice, they rely on limited anecdotal client feedback and hope that their efforts are aligned with their cli-ents’ true desires, likes and dislikes. Each side relies upon con-ceptions not necessarily grounded in reality, and is left guess-ing at the health of the relationship under an assumption that what they are doing is mutually beneficial. The relationship cannot reach its full potential, or fails entirely, when little or no honest, timely, targeted feedback is provided.

For the client, ensuring that the right counsel partner is uti-lized on each case is critical to the end goal of navigating its litigated matters to an efficient and successful outcome. The

By Daniel Winkler, Gregory Hirtzel and Michael Cronin

Raising the BarCollaborative Performance Management

LM Spring 2013.indd 50 3/1/13 1:52 PM


law firm strives to provide valuable services to the client so that a strong relationship that ensures a steady stream of legal assignments is established. A formal, structured evaluation process allows the law firm to be clear on what is impor-tant to the client (a roadmap to success), and also provides a vehicle by which the client may ensure improved service. Consequently, each partner to the relationship achieves its end goals through an open forum driven by specific factual information and observation.

Moving Forward With time and workforce resources at a premium, many clients may have good intentions to start or enhance a law firm performance management process, but they allow the concept of perfection to become the enemy of progress and evolution. There is nothing wrong with using baby steps to start moving in the right direction.

There is also not one perfect system. The process should be somewhat customized to fit the client’s goals, resources, data and capacity. The following provides some food for thought as to one approach.

The Quadrant SystemUtilizing a quadrant or segment-oriented system allows for the building of a performance management process as capac-ity and information builds. The first quadrant may consist of a

simple, easy to use grade card that allows the client file super-visor to score the firm at the conclusion of the matter (or dur-ing identified phases or intervals of the matter) on specific, pre-determined attributes. These attributes would center on the key performance indicators that the client determines are critical to the handling of its litigated matters such as knowl-edge, skill, communication, efficiency and outcome. The cli-ent can select a scoring scale that it prefers, i.e., 1 to 5, 1 to 10, 1 to 100, etc. Regardless of the grading scale used, clear sight lines should be defined for the grades to be given.

Quadrant two may consist of specific firm data obtained from the client’s matter management, billing or claims sys-tem. This data will hopefully provide some insight into the nature of the legal spend activities for each matter in some detail. Like a medical chart, this information can be exam-ined to look for trend lines or outliers that can serve as the starting point for brainstorming between client and counsel to determine effective ways to mitigate or control problem-atic, inefficient or ineffective areas.

Quadrant three may consist of general observations that have been discussed internally by staff members who have interaction with the firm and/or that have been noted through billing or work product activity. Global observation categories can be created to provide a consistent platform for all firms that will receive feedback.

LM Spring 2013.indd 51 3/1/13 1:52 PM


The last quadrant may consist of results and data obtained through closed file evaluations. This segment allows for an independent review of the file by internal team members who were not involved in the handling of the matter with the assigned firm. Consistent, pre-defined scoring criteria can be used to build grading results that align with identi-fied goals and attributes.

The use of all of the above quadrants provides for a col-lective viewpoint, from multiple information sources, cre-ating a holistic assessment of the firm’s performance. As noted, some or a little feedback is better than none at all. A simple use of any one of the quadrants provides a start-ing point, with future additions made as capacity and/or information allow.

A Receptive AudienceThe worst fate that can befall the process is for the informa-tion to be delivered to a non-responsive firm. A common complaint from firms is that they receive no feedback from their clients. Similarly, clients cannot help but draw unfa-vorable impressions about a firm that ignores the client’s communications about performance objectives. If a client is going to dedicate the time and resources necessary to create a roadmap for counsel’s success, firms need to ensure that they embrace this opportunity and engage in a meaningful dialogue with the client about the information provided. It is critical that the firm recognize that the information pro-vided not only identifies what is important to the client, but also informs where the firm needs to focus its efforts for improvement. A failure by the firm to engage the client in a dialogue about the client performance assessment renders the client’s investment in the process a wasted effort, to the detriment of both parties.

The collaborative discussion that takes place from the firm’s follow-up is the lynch pin to the success of the process. If seen and used as an open communication opportunity with-out punitive impact, barriers are removed and true partner-ship can flourish through the identification of more efficient and effective litigation activities and approaches. The client should also invite the firm to provide feedback as to suggest-ed enhancements to its litigation management processes.

Keeping the Focus Armed with the data on its performance relative to client objectives, the law firm’s challenge becomes implementa-tion of a strategy tailored to better achieve the client’s per-formance objectives, consistent with the firm’s obligation

in terms of competent and zealous representation. Specific programs, such as internal reviews and even alternate meth-ods of compensation are options that can be considered to accomplish this goal. For example, if a key client objective is file cycle time, and the service evaluation suggests that liti-gation files are remaining open longer than appropriate, the firm could introduce a point system that rewards proactive file handling, which leads to “early” file closure.

When a litigation file is closed in a manner consistent with ethical obligations and client expectations, within a spe-cific timeframe (one to three months, three to six months, etc.), the handler is awarded a certain number of points, with greater points awarded for each “earlier closure” seg-ment. Once the handler achieves a particular benchmark in points, appropriate performance rewards are provided. The

essential focus is that where areas of improvement are iden-tified by the performance review, the firm must be vigilant in assuring that the handling habits of its members evolve so as to achieve the results deemed paramount by the client.

Creating a Win-WinAn effective law firm performance management process is one that cultivates an open line of communication between the client and firm and eliminates ambiguity as to what the client’s objectives are with respect to the legal services it is receiving. When the process is embraced by both sides, an opportunity is created whereby the client receives improved value from its law firms and the firms obtain a road map by which to satisfy their client, resulting in a stronger partnership. LM

Daniel Winkler is the leader of the Claims Legal department at Westfield Insurance. Gregory Hirtzel is a principal with Post & Schell P.C. Michael Cronin is Senior Claims Counsel at Westfield Insurance.

Ultimately, when deciding how to

answer any question, remember that trust is an essential element.

Amusements, Sports and Entertainment Liability. Appellate Advocacy and Post-Trial Practice.Architectural, Engineering and Construction Defect Litigation. Asbestos and Mass Tort Litigation. Automobile Liability. Aviation and Complex Litigation. Birth Injury Litigation. Class Action Litigation. Commercial Litigation. Construction Injury Litigation. Consumer and Credit Law. Employment Law. Environmental & Toxic Tort Litigation. Fraud/Special Investigation. General Liability. Health Care. Governmental Compliance. Health Care Liability. Health Law. Hospitality and Liquor Liability. Insurance Coverage/Bad Faith Litigation. Life, Health and Disability Litigation. Long-Term Care Liability. Maritime Litigation. Medical Device and Pharmaceutical Liability.Medicare Set-Aside. Privacy and Data Security Liability. Product Liability. Product Warranty Litigation. Professional Liability. Public Entity and Civil Rights Litigation.

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MARSHALL DENNEHEYWARNER COLEMAN & GOGGIN

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GLOBAL CLIENTS I NATIONAL RECOGNITION I REGIONAL REPRESENTATION

LM Spring 2013.indd 52 3/1/13 1:52 PM

Amusements, Sports and Entertainment Liability. Appellate Advocacy and Post-Trial Practice.Architectural, Engineering and Construction Defect Litigation. Asbestos and Mass Tort Litigation. Automobile Liability. Aviation and Complex Litigation. Birth Injury Litigation. Class Action Litigation. Commercial Litigation. Construction Injury Litigation. Consumer and Credit Law. Employment Law. Environmental & Toxic Tort Litigation. Fraud/Special Investigation. General Liability. Health Care. Governmental Compliance. Health Care Liability. Health Law. Hospitality and Liquor Liability. Insurance Coverage/Bad Faith Litigation. Life, Health and Disability Litigation. Long-Term Care Liability. Maritime Litigation. Medical Device and Pharmaceutical Liability.Medicare Set-Aside. Privacy and Data Security Liability. Product Liability. Product Warranty Litigation. Professional Liability. Public Entity and Civil Rights Litigation.

Product Liability. General Liability.Retail Liability. School Leaders’ Liability. Securities and Investment Professional Liability.Technology, Media and Intellectual Property Litigation. Trucking & Transportation Liability. White Collar Crime. Workers’ Compensation. Amusements, Sports and Entertainment Liability. Appellate Advocacy and Post-Trial Practice. Architectural, Engineering and Construction Defect Litigation. Asbestos and Mass Tort Litigation. Automobile Liability. Aviation and Complex Litigation. Birth Injury Litigation. Class Action Litigation. Commercial Litigation. Construction Injury Litigation. Consumer and Credit Law. Employment Law. Environmental & Toxic Tort Litigation. Fraud/Special Investigation. General Liability. Health Care Governmental Compliance. Health Care Liability. Health Law. Hospitality and Liquor Liability. Insurance Coverage/Bad Faith Litigation. Life, Health and Disability Litigation.

Long-Term Care Liability. Maritime Litigation. Medical Device and Pharmaceutical Liability. Medicare Set-Aside. Privacy and Data Security Liability. Product Liability. Product Warranty Litigation. Professional Liability. Property Litigation. Public Entity and Civil Rights Litigation.

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Public Entity and Civil Rights Litigation.

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Medicare Set-Aside.

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When Defense Matters.

When you hire outside counsel to defend your client,

doesn’t it make sense to hire an experienced law firm...

where defense matters?

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MARSHALL DENNEHEYWARNER COLEMAN & GOGGIN

www.marshalldennehey.com

GLOBAL CLIENTS I NATIONAL RECOGNITION I REGIONAL REPRESENTATION

LM Spring 2013.indd 53 3/1/13 1:52 PM

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By now, most, if not all involved in claims are aware of the potential treasure-trove of dam-aging information claimants share on social media websites regarding their alleged injuries. Some are now even arguing that it may be mal-

practice to not attempt to seek social media information because the pictures or comments posted by claimants can offer irrefutable cross-examination fodder.

But as they say, “What is good for the goose is good for the gander,” and if the same social media inquiries are turned towards defendants, the possibility exists that pictures and postings can be just as damaging to the defense as they are

to claimants. Taking it one step further, social media discov-ery can affect the tripartite relationship between the insured, insurer and defense counsel.

Insured’s Social Media Postings If an insured violates an employer’s policy prohibiting work-related social media posting, it could cause a situation where the attorney-client privilege could be breached. Consider a scenario in a medical malpractice claim where a hospital nurse photographs a patient in the operating room from her smart phone, a violation of hospital policy, and the picture clearly depicts a non-sterile situation. Later, she posts the photo to her Facebook page with a comment. In the subsequent lawsuit

By Matthew P. Keris and Frank J. Brier

OMG?!The ImpacT of SocIal medIa

on The TrIparTITe relaTIonShIp

LM Spring 2013.indd 54 3/1/13 1:52 PM


against the hospital for injuries due to patient infection, plain-tiffs’ counsel may ask in their standard discovery requests for any and all pictures depicting the procedure at issue. The hos-pital does not have any pictures of the patient or the procedure itself in the medical record. But, to the surprise of hospital coun-sel who subsequently meets with the operating room scrub nurse in preparation for her deposition, she reveals that she took a picture of the patient from her smart phone and posted it on her Facebook page. This could create an ethical problem for hospital counsel involving the attorney-client privilege.

Hospital counsel is now facing a situation where a client may be reprimanded or terminated by her employer for posting a patient’s picture on Facebook. To add another wrinkle, sup-pose the nurse instructs the hospital attorney to not reveal to her employer prior to her deposition that the picture exists. Further complicating things is that there is no good faith discovery objection that supports not revealing the existence of the damaging picture.

At this point, defense counsel is facing an irreconcilable situation. Without revealing client confidences, counsel most likely needs to withdraw as counsel for both the nurse and the hospital and recommend the retention of personal counsel to the nurse.

Insurance Carrier’s Social Media SiteMost businesses, including insurance companies, maintain social media sites as a way to market potential clientele. But just as insurance companies can promote themselves from their social media sites, others can post their opinions on these same sites for everyone to see. If policyholders choose to complain about the management of a claim on their car-rier’s social media website, is it grounds to limit or withdraw coverage for failing to cooperate?

In situations involving clear motor vehicle liability, such as a rear-end collision, insureds often question why they need to be involved in the subsequent third-party litigation and demand that the carrier pay what is necessary to settle the claim to limit their personal involvement, including participation in a deposition and sitting through a trial. Suppose an insured in this scenario posts on the automobile carrier’s Facebook page, “Save money by NOT getting insurance here. They may be cheaper because they cheat you on claims!” or “Don’t plan on this company paying any claims. The more claims they reject, the more money they keep!!” The insured then complains how insurance companies only worry about the bottom-line and are not taking into account their insureds’ desire to get on with their lives and settle the clear-liability claim.

If the insurance carrier is made aware of these statements, or they are in some way are made available for the jury to consider in the third-party liability trial, are they grounds to revoke coverage under the traditional “duty to coop-erate” clause? Obviously, counsel for the insured has a duty to maintain coverage for the client and should make attempts to reign in the client. But if similar postings per-sist, personal counsel may need to be engaged to maintain coverage. Further, the carrier should, if it hasn’t already, develop a protocol on how to handle disgruntled policy-holders’ postings.

Law Firm Marketing Efforts Defense firms have also embraced social media as a way to market case victories. As a way to attract new clients, they may specifically describe their efforts and how they suc-cessfully defended a catastrophic case. But what they do not explain in their marketing is that their defense efforts were consistent with a carrier’s philosophy — to incur expenses in order to “send a message” to the plaintiff ’s bar that claims against them will be vigorously defended and they would rather pay their counsel than claimants.

If a potential client sees a defense firm’s social media mar-keting blitz discussing the defense of the catastrophic case and demands they be retained by their different carrier who is more vigilant in maintaining defense costs and expendi-tures, the insured may be let down by the firm when their defense efforts are restrained by the carrier. The insured may ask their counsel why they did more (i.e., hired more experts, did more inspections, performed extensive surveil-lance) for their other client, but not for them in this par-ticular case. The insured may be disappointed in their new counsel’s performance, but this disappointment could have been avoided or tempered if the defense firm described the other carrier’s more aggressive defense philosophy. Defense firms need to be aware that social media marketing can cre-ate client expectations that may not be achievable in every scenario, unless the firm or the client agrees to incur costs that are not reimbursed by a more stringent carrier.

As social media becomes even more mainstream, partici-pants in the tripartite relationship need to be aware that their actions may raise ethical concerns. Otherwise, it may result in the discovery of a potential conflict that can increase ten-sion between the parties while increasing litigation costs. LM

Matthew P. Keris, Esq., is an attorney with Marshall, Dennehey, Warner, Coleman & Goggin. Frank J. Brier, Esq., is Litigation Counsel for Geisinger Health System.

LM Spring 2013.indd 55 3/1/13 1:52 PM


Both sides have rested, the jury is filing into the jury room to deliberate the plaintiff ’s claim, and millions of dollars are potentially at stake — but who are the 12 people tasked to deliver the ver-dict and what if one of them is out to get you?

No longer simply the plot of the latest blockbuster movie or novel, for mass tort defendants and the companies that insure them, the threat of a rogue or stealth juror is critical and real. The rising tide of mass-tort litigation in the United States over the last 25 years has left in its wake millions of mass-tort plain-tiffs, spouses, relatives and friends. Whether the old war-horses of asbestos and silica or the latest pharmaceutical and medi-cal device cases, mass-tort plaintiffs and those closest to them can be pulled onto any venire list in any jurisdiction. Indeed, in some of the most active mass-tort jurisdictions, mass-tort plaintiffs and their family members out-number non-plaintiffs in the community three to one.

Given that jurors often carry their prejudices, preconceptions and agendas into the jury room, all of which can affect the

ultimate decision rendered, one rogue or stealth juror seated on the panel — one mass-tort plaintiff or family member — can turn what should be a slam dunk case for the defense into a multi-million dollar award for the plaintiff.

Jury LotteryThe lottery-like nature of our civil justice system can be attributed in part to the lottery-like nature of the jury selection process, beginning with the random selection of the jury pool. Various mechanisms are used by litigants to manipulate the odds of seating a favorable panel from the overall reporting pool, including use of juror question-naires, hiring jury consultants, creation of juror profiles and strategic voir dire. Each of these methods is useful, but none will necessarily reveal a potential juror’s status as a claimant and/or his familial relationship with a claimant.

Individuals are not the best measure of their own biases, and sometimes may not perceive themselves as biased at all. Moreover, it is no secret that jurors are not always can-did during the voir dire process for varying reasons, such

By Michelle Stegmann, Marcy Croft and Laura Goodson

Runaway JuRoRsRouting out Rogue JuRoRs BefoRe tRial

LM Spring 2013.indd 56 3/1/13 1:52 PM


as the simple reluctance to answer personal questions in public. Dishonest answers, whether provided blatantly or by omission, affect the integrity of both the civil justice system and the verdict reached in the case. Thus, the reality of a rogue plaintiff-juror (or even simply a juror with a familial relationship to a plaintiff) is especially likely in the hot bed jurisdictions for mass-tort claims, particularly those involv-ing asbestos, silica and pharmaceutical lawsuits.

Finding the RogueTwenty years ago, these rogue plaintiff-jurors were nearly undetectable. The technological resources simply did not exist to ferret out these individuals. For example, in an asbes-tos case filed in Jefferson County, Miss. in 1995, on behalf of approximately 1,700 plaintiffs, 12 of the plaintiffs were select-ed as a trial group and proceeded to trial on their claims three years later in 1998. The trial transcript from this case reflects that both the trial court and the attorneys openly questioned potential jurors during voir dire regarding exposure to asbestos, asbestos claims, and family members with exposure or claims. A mere handful of individuals responded to these direct ques-tions, and only two members of the venire were challenged and struck for cause. Those mass-tort defendants, their insurers and their trial lawyers used every effort to flush out those potential jurors with any exposure or connection to asbestos litigation. None were presumed to have made it through to the final panel of jurors and alternates — until now.

Despite the use of jury consultants, specific voir dire exami-nation, and the lack of response from these individuals when directly questioned about asbestos exposure or exposure of their family members, a full one-third of the jury panel that ultimately rendered a record-breaking $48.5 million dollar ver-dict have since been connected with asbestos or silica lawsuits. They or their family members claimed exposure to asbestos or silica, were screened for lung problems, and eventually filed claims of their own — in some instances, within a few months of the actual verdict, using the same diagnosing doctor, suing the same defendants and hiring the same counsel as the plain-tiffs in the case in which they rendered a verdict.

Now, fast forward a full decade to 2008 and a mass-tort silica case tried in neighboring Claiborne County, Miss. A venire of 350 potential jurors was summoned by the Circuit Court in that case. Using the traditional jury consultant and voir dire examination, initial results were eerily similar to the 1998 asbestos case — the entire panel of potential jurors denied any connection to asbestos or silica litigation. These defendants, however, had the benefit of time and technology. They asked for, and received from the trial court, the last four digits of the social security numbers for the panel members. Comparing this information to their own data on resolved and pending mass-tort claims in the county as well as information obtained from online public search engines, the defendants and their counsel were able to identify two members of the seated jury who had not disclosed their own silica and/or asbestos law-

suits. A mistrial was immediately declared by the trial court.

While such a result in a tough jurisdiction is certainly a vic-tory in anyone’s book, the jury in the 2008 silica case was empanelled before the information disqualifying its mem-bers was discovered. What is ultimately needed by mass-tort defendants is the ability to act offensively rather than defensively — to root out rogue jurors as early as possible, before they ever have a chance to run away with a verdict or influence other panel members in the slightest.

Information AdvancesIn June 2010, asbestos defendants in Jefferson County, Miss. finally achieved this “holy grail.” In an asbestos case tried in the same courthouse as the ill-fated 1998 matter, mass-tort defendants discovered a formula for eliminating rogue jurors not only from the seated jury, but also from the entire venire panel itself. Building on lessons learned from prior cases, these mass-tort defendants not only secured the ser-vices of jury consultants, crafted extensive voir dire ques-tions and obtained the last four digits of the venire mem-bers social security numbers, they also sought and obtained from the trial court a questionnaire that required potential jury members to disclose basic biographical information regarding their spouses, parents and adult children (names, addresses, ages, occupation). The information obtained was then provided to one of the few, new private mass-tort inves-tigative services in the country for cross-referencing against claims information obtained from electronic and — most importantly — paper records relating to pending mass-tort plaintiffs, resolved mass-tort claims, and even screenings performed on individuals seeking to file a mass-tort lawsuit.

The combined results of these efforts allowed the defen-dants to present the trial court with information connecting approximately 40 percent of the venire to mass-tort lawsuits and/or screenings for mass-tort lawsuits. It should be no surprise that the resulting jury empanelled in the case even-tually rendered a unanimous defense verdict — the first of its kind in an asbestos case in Jefferson County, Miss.

Beyond Google, Lexis-Nexis, Westlaw, and the like, there exists a wealth of information that is too often ignored in the trials of mass-tort cases. A significant amount of that informa-tion is actually in the hands of the defendants (and insurers) themselves. It is incumbent on all defendants in mass-tort liti-gation to use this information and every weapon in their arse-nal to root out those rogue jurors that infect and plague our justice system. As John Grisham once said in The Runaway Jury, “every jury has a leader, and the verdict belongs to him.” This statement was never more true in mass-tort cases — so make sure the leader in your case isn’t also a plaintiff. LM

Michelle Stegmann is an Assistant Vice President with Resolute Management, Inc. Marcy Croft and Laura Goodson are partners with Forman, Perry, Watkins, Krutz & Tardy, LLP. Laura Goodson

LM Spring 2013.indd 57 3/1/13 1:52 PM


|WHaT’S aT RISk|

As a mom first and a risk management pro-fessional my heart, like so many others, is broken over the massacre at Sandy Hook Elementary School. The mom in me wants to hold my children close and never let them

go. It is a sad fact that the last six months have brought fear to movie theatres, malls and now elementary schools.

The story of the shooting at Sandy Hook is a story of loss, heroism, suffering and violence. But as a trained profes-sional, I have a duty to examine the tragedy in Connecticut

By Patricia Kagerer

Lessons LearnedCreating and Implementing a Crisis Communications Plan

LM Spring 2013.indd 58 3/1/13 1:52 PM


through the lens of a risk manager. In the wake of this shooting, legislatures, police departments, health profes-sionals, criminologists and educational institutions will each be doing the same thing from their respective areas of expertise. Each industry will determine why the shooting occurred, how it could have been prevented and how we can help those who have been left behind.

In the risk management industry, we have a responsibil-ity to help mitigate risk — financial, legal and reputational risk, certainly, but most importantly, risk to individuals. Our sacred goal is to help keep people safe. In the wake of this horrific tragedy, organizations should review their protocols and procedures for a wide range of emergencies. If appropriate, lessons from the incident in Connecticut should be applied.

But what if you don’t have a Crisis Communications Plan? Then it’s imperative to begin creating one. The ability of employees to respond quickly and calmly during emergen-cies of any kind is vitally important. This can only be done if employees feel confident in what they are supposed to do — and how.

Complete a threat analysis. Compile a list of likely disas-ters — both natural disasters such as storms to man-made disasters such as violence or a break-in. Consider the widest possible range of crisis situations for your organization, and decide later for which ones you want to plan.

Begin planning. Identify which disasters are the most likely and most threatening. If your business is located in a neighborhood in which crime is high, a break-in may be a scenario for which you want to prepare. Other threats may not be as likely, but if they did occur, would be devastating. Select the most important contingencies and define the possible scenario in more detail. Defining what the situa-tion would look like will help to define the recovery plans for that scenario.

Identify critical preparations. Examine the critical prepa-rations that must be put in place — everything from calling trees to emergency kits.

Appoint a crisis management team. After you have planned for scenarios, and identified critical preparations, then you must select and appoint a crisis management team. If you have multiple scenarios, then you might have dif-ferent people designated for the team depending upon the situation. Most importantly, designate a clear chain of com-mand for the team to take charge during a crisis. They must not only have the responsibility, but also the authority to act and make decisions.

Train employees. Once the plans and team are defined, it is important to inform and educate everyone else. Explain

important procedures like evacuation drills, emergency exits and what is expected under the various likely scenarios.

Get outside help. When a crisis strikes, seeking an outsid-er’s perspective is important. Internal politics may take over in the middle of a major problem as people become more focused on keeping their jobs, rather than what is best for the company. Savvy leaders anticipate internal politics and

combat them by bringing in someone from the outside who can look at the issues without bias. His or her role is to pro-vide counsel to a team leader — a perspective that few inside the company can offer. They are free to look at things that many tend to overlook because of their internal biases. Just because you bring in outside counsel doesn’t mean you can’t handle the crisis. It means you recognize your weaknesses and are smart enough to do something about it.

Continuous improvement. Crisis management plans should be practiced at least once per year, and the plan should be updated. Key personnel will change, informa-tion and phone numbers will need to be confirmed, and key parts of the plan might need to be refreshed. It will be of little use to pull out an out-of-date plan during a crisis only to find out that the information is wrong or that the plan will not work because of changed circumstances.

The key to successfully managing a crisis is having a realistic plan ready to execute. Good planning will identify not only the necessary steps, but also the required advance prepa-ration of supplies, people, and training. Public shootings release powerful emotions. It is my hope that we can use some of the fear and confusion created by this tragedy and put it to use to plan to protect our communities further. It is my prayer that your plans will never be needed. LM

Patricia Kagerer is a Risk Management Executive with American Contractors Insurance Group based in Dallas.

In the wake of this horrific tragedy, organizations should review their

protocols and procedures for a wide range of emergencies.

LM Spring 2013.indd 59 3/1/13 1:52 PM


The incidence of suspicious and fraudulent theft claims is on the rise. At the same time, the methods and techniques employed in con-nection with these claims have become more diverse and more sophisticated. These claims

require a deliberate and methodical strategy of investigation.

Fraudulent theft claims usually fall within two general cat-egories — inflated loss and staged loss. Perhaps the most common form of fraud in a theft claim is the inflated or “padded” loss. This involves the fraudulent inflation of val-ues for items claimed, as well as the inclusion of items that were not stolen or were not even owned by the insured. A staged loss is fraudulent at the very outset. The insured seeks to realize a pure profit from the claimed loss of items that were never stolen and perhaps never even owned.

Be SuspiciousThe key to successfully investigating fraudulent theft claims is the ability to identify and recognize suspicious factors in claims. A loss where virtually all of an insured’s property or inventory is stolen should be closely examined. The par-ticular items stolen in a reported theft may also raise con-cerns. Seasonal items and accumulated or outdated inven-tory in a retail loss situation should be carefully reviewed.

The absence of any apparent forcible entry in a burglary situation is always suspicious. The area of entry and exit in a reported burglary may be highly improbable. A closer look is warranted if an insured forgot to set the alarm, or the alarm activation and alert times establish a short win-dow of time for the loss to occur, and/or where items stolen were primarily insured while uninsured items were inex-plicably left behind. Large or bulky items taken without evidence of a means of removal should raise suspicions.

A loss just after a policy has been issued or when cover-age is about to expire is a classic red flag. A loss during an insured’s divorce or separation is another. Obsolete, out-of-date or unmarketable merchandise reported as sto-len raises concerns. A prior loss history involving similar

claims is significant. A prior claim considered to be entire-ly legitimate may provide an incentive in times of financial need. Duplicate items previously claimed should be noted.

An insured may have two separate policies covering the same property. Duplicate coverage may exist through fam-ily members or business associates. Credit insurance may provide duplicate coverage. Contact with the investigating authorities may point out inconsistencies or discrepancies in the circumstances or amount of the loss claimed.

An antagonistic insured may use intimidation to get a quick settlement. An overly cooperative insured may seek to divert attention from the suspicious circumstances. An insured seeking a quick settlement and willing to take “any reasonable offer” should be viewed with skepticism.

Over-documented or under-documented claims may be the first indication of fraud. An insured with no receipts, no proof of payment and no recollection of where items were purchased should cause concern. An insured who can produce a receipt for virtually every item claimed should also come under suspicion. Receipts that have been forged, altered or created are often obvious.

Manage the SituationWhen a theft claim is made, a recorded interview needs to be done quickly. It should be a recorded or written statement whenever possible and should cover in detail the circumstances of the loss and how it was discovered. You should obtain the names of all witnesses and possible suspects.

Inspect and photograph the loss site. Ask the insured to point out and diagram the locations where items taken in the theft were located. If appropriate, interview the police officer who was called to the scene. Ask about the insured’s attitude and demeanor at the time the loss was reported, his/her cooperation in the investigation, the preliminary statement of loss described, and any unusual or suspicious factors noted. Ask if the loss is considered unfounded, whether there have been any leads developed or suspects

Proving the NegativeFighting Fraudulent Theft Claims

By guy e. “Sandy” Burnette, Jr. and Lynette Caldwell

OUnCE OF PREVEnTIOn | FRaUd

LM Spring 2013.indd 60 3/1/13 1:52 PM


identified, and whether the investigation is still active. Determine if the insured has ever followed-up with the authorities about the investigation.

Consider interviewing neighbors or adjoining businesses about their observations at the time of the loss, any unusu-al activities noted, and any indications that a loss was tak-ing place. Question witnesses about their familiarity with the insured and the property stolen.

Do a complete civil and criminal records check. The prop-erty records will identify the assets owned by the insured, as well as the liens and mortgages on any properties. Uniform Commercial Code filings will list secured obligations on property and equipment. The bankruptcy court records will identify any proceedings involving the insured. The civil actions records will point out significant lawsuits filed by or against the insured and may provide an indication of motive.

Require complete documentation of the claim. Contents inventory forms should be provided for the insured to com-plete with information as to the brand, model, age, condi-tion, value and place of purchase for the items claimed. Receipts, invoices, proofs of purchase and other support-ing documentation should also be required.

If the insured cannot produce a receipt for an item, then proof of payment such as a cancelled check or credit/debit card receipt should be requested. Determine the source of funds for items of significant value purchased with cash. When an insured claims that he/she routinely carries large amounts of cash and makes most purchases with cash, look at credit card records and ATM withdrawals to see if that is consistent with the pattern of purchases. If the insured can provide any time frame for the purchase of an item, the sales records kept at the store should include the original sales receipt or purchase order. The warranty registration and any service/repair records maintained by the store or manufac-turer should be requested both for verification of purchase and to identify any problems/defects or complaints.

Verifying LossesCommercial losses involve a more complex process of verifica-tion through an insured’s inventories, shipping receipts, accounts payable, warehouse records, sales records, sales tax records and state/federal tax returns. Sales records and sales tax records will provide documentation of the resale of items. Comparison with warehouse records and shipping records should confirm the type and quantity of items claimed to have been stolen.

Any prior claims involving the same parties will be in the ISO All Claims Database. Identifying an insured who has been involved with prior insurance claims may have par-ticular significance to the claim under investigation.

State Divisions of Insurance Fraud have extensive resources for the investigation of fraudulent claims, including subpoena

process and arrest powers. In referring a suspected claim to the Division of Insurance Fraud, nearly every state provides a statutory grant of immunity from suit to the insurance carriers.

The National Insurance Crime Bureau (NICB) is an inde-pendent investigative agency operating in conjunction with local law enforcement authorities. Although NICB will rarely share specific information about an ongoing investigation, their efforts frequently result in the identi-fication and arrest of individuals responsible for insurance fraud crimes.

Claims representatives should carefully review the informa-tion that has been gathered prior to making the decision to deny a claim. The file must contain specific documentation of fraud. All of the necessary investigation should be com-pleted. Witnesses should be contacted and interviewed. In certain cases, the insured may be required to submit to an Examination Under Oath. Tangible evidence of fraud should be secured and documented in the file. Only at this point should the decision be made to deny a claim.

As a general rule, compromise offers or token settlements should not be attempted prior to denial of a claim. Even after denial, these should be cautiously approached. The potential for allegations of bad faith in such situations is significant.

A systematic and documented investigation by the claims representative can result in the successful denial and defense of fraudulent theft claims. The resistance to such claims represents the best hope for the insurance industry in combating the increasing incidence of fraud. LM

Guy E. “Sandy” Burnette, Jr. is with the law firm of Guy E. Burnette, Jr. P.A. based in Florida. Lynette Caldwell is a Special Investigator with Liberty Mutual Insurance in California.

FRaUdUlEnT THEFT WaRnInG SIGnSK Was outdated or seasonal inventory reported stolen?

K Are there signs of forcible entry?

K Did the insured forget to set the alarm or did it fail?

K Is there evidence of a means to remove large quantities or bulky items (tire tracks or observation of a truck)?

K Was the policy recently issued or about to expire?

K Was the insured in a divorce or separated?

K Does the claimant have a prior loss history involving similar claims?

K Is there duplicate coverage for the same property?

K Is the insured seeking a quick settlement and willing to take any reasonable offer?

K Is the loss over-documented or under-documented?

K Can the purchase of items be verified?

LM Spring 2013.indd 61 3/1/13 1:52 PM


Should potential fraud investigations be handled by the claims adjuster or the Special Investigation Unit’s investigator? That’s a long-standing ques-tion, and the answer is both. SIU’s responsibil-ity is to investigate the facts to determine if

the claim is legitimate. The claim professional’s job is to continue to evaluate the claim and to analyze the facts to resolve any coverage issues. It is important that both tracks occur simultaneously, with good communication within the company during the investigation.

Working TogetherThe adjuster needs to oversee the SIU investigation and to help focus that investigation. He or she should make sure that facts needed to resolve coverage issues are gathered. The adjuster and SIU need to work together as a team and focus on the true objective: to prove the loss is legitimate and allow the claim to proceed to payment. The goal is not to prove fraud, but to prove what actually occurred. Although there were a number of fraud indicators that led to the SIU referral, fraud should not be assumed, and proving fraud should not be the goal. Facts that would lead to proving that the claim is legitimate must be developed, not just facts that may estab-lish fraud. When the investigation is completed, an objective observer should be able to see that the investigation was fair, and that the goal was to prove the truth, whatever that is.

Among the issues the claim adjuster and SIU investigator need to consider is how strong is the evidence? Did the investigator conduct only a non-recorded interview with a witness who allegedly had evidence to support a deni-al? If so, why did they not secure a recorded statement? What efforts did they make to verify the information? Did they take any statements of people who would support the claim? Did they follow up on information that supports the claim as well as information that may not?

It also is important to consider whether experts are need-ed. The claims adjuster should make that decision, but working together with the SIU investigator to focus on what specific question an expert needs to address. Is an appraiser for the value of art or other property needed? Is a forensic accountant needed to analyze a company’s books or a person’s financial situation?

Bringing in a LawyerIt also must be considered whether a coverage attorney is needed. If so, when should a lawyer be hired? What is the lawyer’s role in the investigation team? The attorney’s job is to guide the investigation and claim process, gath-er evidence that is credible and likely to be admissible in subsequent litigation and to point out additional areas of investigation to consider. Lawyers should work with the

Whose Job Is It?Should SIU or Claims Control a Fraud Investigation?

By Frank zeigon and gene a. Weisberg

OUnCE OF PREVEnTIOn | FRaUd

LM Spring 2013.indd 62 3/1/13 1:52 PM


SIU investigator and claims adjuster to judge how a trier of fact would view the evidence.

A lawyer may be needed if there is resistance to providing the information required to make a decision on the claim. If an Examination Under Oath would assist the claim investigation, a lawyer should be retained. Skilled law-yers who are experienced in taking Examinations Under Oath know how to cross-examine an insured to bring out the facts, and to do it in a tone that will not look like the insured is being persecuted if litigation results.

As a team a decision needs to be made on strategy for the examination. What is the goal? Should the insured be confront-ed with the facts the investigation has uncovered? In most cases that is the best course. The insured’s answers to the questions raised, or conclusions reached, should not be learned for the first time at trial. It should not appear that the insurance com-pany is hiding facts or evidence from its insured. When and how to reveal those facts is a decision for the investigation team.

Ethical IssuesThere are ethical issues to consider during the investiga-tion. Everyone on the investigation team should treat the insured courteously and with respect at all times. Coverage counsel must be firm, but not overly aggressive, while

gathering the facts. At no point should anyone misrepre-sent information to the insured.

While the investigation is being conducted to determine whether the claim is legitimate, the investigation into the value of the claim should proceed. If, after SIU’s investiga-tion is completed, it is determined that the claim should be paid, it is not good practice to only then begin investigat-ing the claim’s value. This leads to delay in resolving the claim and creates an argument that the goal of the SIU’s investigation was to find a way to not pay the claim.

When a claim investigation team of an adjuster, an SIU investigator and a lawyer work together and communi-cate well, it is more likely that the correct result will be reached. It also is more likely that the claims file will show that a thorough and objective investigation was conducted, which should create a positive impression on a trier of fact if litigation ensues. The goal of a claims investigation is to prove the truth of the claim, not to focus on fraud. The team’s actions, and documentation of those actions, should demonstrate that goal. LM

Frank Zeigon is a Commercial Property Claims Manager for CNA. Gene A. Weisberg is a name partner with Gladstone Michel Weisberg Willner & Sloane, ALC.

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LM Spring 2013.indd 64 3/1/13 1:52 PM

http://www.esquiresolutions.com



Get to know… Frank Chang, Lead Actuary, Google

With a fondness for music and math, Frank Chang pursued both in college. Today, he’s a Fellow of

the Casualty actuarial Society and the Lead actuary at google.

Q. Where did you go to college?a. i went to UC San Diego. i got my bachelor’s degree in music composition and math, then immediately went to graduate school for math and earned my PhD. i love both math and music. The music degree was actually more difficult to complete than the math degree, but it was a labor of love.

Q. Do you still play an instrument?a. Yes, i play piano. My wife plays violin and piano and she also sings. Two of our children also play instruments. i dream of having a family band some day.

Q. So how did you end up becoming an actuary?a. after i got my PhD in math, i was a stock analyst for Motley Fool. i specialized in insurance stocks, which got me interested in pursuing an actuarial career. it took me about four years to pass all of the actuarial exams. i did the first two while i was at Motley Fool, i finished them while i was working first at esurance and then at Fireman’s Fund.

Q. Do you enjoy being an actuary?a. i do. it’s a lot of fun. no workday is ever the same. i get to think about interesting problems and find the answers. i’ve been very lucky in that each of the positions i’ve had as an actuary have been exciting and different.

Q. Tell me about your family.a. My wife, Tina, and i got married almost two years ago. Between the two of us, we have four children who keep us busy. We have one daughter, 13, and three boys ages 9, 8 and 5. They are involved in a variety of activities, from music to martial arts to sports to school newspaper, so we’re always on the run.

Q. What do you like to do for fun?a. We all love to hike and love the outdoors. Living in northern California gives us so many places to explore. We never go to the same place twice. My wife and i also enjoy salsa dancing.

Q. How did you meet your wife?a. actually, we met online. i went on a lot of first dates before i met Tina. i think that’s how i knew when i met her that she was the one. We got married three months after we met. We try to do a date night every week. Luckily our daughter is old enough to watch the boys for a few hours. Once the kids are grown, we plan to take some time off and travel the world.

|WHO knEW|

Frank Chang with his wife, Tina, and their four children.

LM Spring 2013.indd 65 3/1/13 1:52 PM


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Get to know… Adrianne Baumgartner, Managing Partner, Porteous, Hainkel & Johnson

a native of Louisiana, adrianne Baumgartner has worked hard to be successful in her law career and raise her four now adult children. Her hard work

has certainly paid off as she serves as her firm’s managing partner and has the pleasure of watching her children succeed in their own lives.

Q. Where did you grow up?a. i grew up in a little town called new iberia, which is on Bayou Teche south of Lafayette. My Papa, who is 86, is still a practicing attorney in my hometown. i’m the oldest of 11 children. One of my brothers practices with Papa. i have three other brothers and one sister who are also attorneys.

Q. Where did you go to school?a. i attended high school at the academy of the Sacred Heart Boarding School in grand Coteau, La.. i graduated from newcomb College. i then attended LSU Law School for one year before transferring to Tulane.

Q. What was your first job after law school?a. i started as a law clerk with Porteous, Hainkel and Johnson and began practicing with the firm after i graduated. i practiced in their new Orleans office for five years, and then they gave me the opportunity to open an office in Covington. We now have eight attorneys in this office and a total of 30 attorneys firm wide.

Q. Was your practice affected by Hurricane Katrina?a. Our new Orleans office was closed until the middle

of October. We started connecting by way of conference calls and gathering our attorneys and staff at our satellite offices. We were able to get into new Orleans to retrieve our servers, brought them to our Baton Rouge office and opened up within a week of the storm. after Katrina, we handled a large number of first party property damage claims many of which involved coverage issues and institutional bad faith claims. They were much more intense

than our typical cases due to the volume as well as the emotional factor involved from the perspective of the insureds and the toll it took on those handling the claims.

Q. Tell me about your family.a. i’ve been married for 32 years. My husband is also a lawyer who spent the last 15 years of his career with exxon. We have four children. The oldest is 30 and after eight years in the Marines is now attending Loyola Law School. My daughter has an MBa and is working in new Orleans. Our second son is 25 and getting ready to start medical

school. Our youngest son is a junior studying biology at LSU.

Q. What was it like raising four children and managing your law career?a. i was extremely fortunate. My kids went to school five blocks from my office so we were able to commute into town together. During that time i kept my practice centered in a two-district area, which allowed me to keep a full trial schedule. i even tried cases seven or eight months pregnant and never missed a beat. There were so many things which aligned to make it all possible: my husband’s full support and participation, the type of practice i had at the time and the support of the members of my firm.

Know someone we should interview for Who Knew? Send your suggestion to [email protected].

|WHO knEW|

|dIRECTORy OF adVERTISERS|

Adrianne Baumgartner and her husband have led two successful law careers while

raising their four children.

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Dedicated to service and leading with integrity and courage, KNCH has served our country’s most reputable home builders for over 25 years. KNCH specializes in construction litigation, with emphasis in construction defect, personal injury, lien, and delay claims. KNCH has over 70 attorneys with offices in California, Arizona, and Nevada.

KNCH has been privileged to work with the entire Pulte Group legal and risk teams. KNCH has partnered with Pulte in the resolution of a multitude of complex matters with the highest levels of professionalism and success. KNCH was the proud recipient of the Pulte National Law Firm of the Year award in 2008 and their Litigation Counsel of the Year Award in 2006.

From left to right: William Nebeker, A.V. rated by Martindale Hubbell, listed in 2010, 2011 and 2012 Southwest Super Lawyers and a Certified Specialist in Personal Injury and Wrongful Death by the Arizona Bar Association; Megan Dorsey, A.V. rated by Martindale Hubbell and current Managing Partner; Keith Koeller, Founding Partner, A.V. rated by Martindale Hubbell and listed in 2010, 2011 and 2012 Southern California Super Lawyers; Mark Newcomb, member of Firm Executive Committee and past Managing Partner; William Haluck, A.V. rated by Martindale Hubbell and listed in the 2005, 2007, 2008 Southern California Super Lawyers and Super Lawyer Corporate Counsel for 2008 and 2009; and Robert Carlson, A.V. rated by Martindale Hubbell and has been named in San Diego Super Lawyers in consecutive years since 2007.

ARIZONA3200 North Central Ave.Suite 2250Phoenix, AZ 85012602-256-0000

CAL IFORNIA3 Park PlazaSuite 1500Irvine, CA 92614949-864-3400

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K N C H L AW. C O M

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LM Spring 2013.indd 68 3/1/13 1:52 PM

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Documents

2013.3 Spring Litigation Mgt