1. Client Relations, Expectations and Confidentiality Chris Carucci Matt Morrison © CLM Litigation Management Institute 2013. All rights reserved. The course material presented herein does not represent the views or opinions of any of the individual faculty members or instructors or of any of the companies or entities with which they may be employed or affiliated. Nothing in the course materials presented should be construed as legal or professional advice or the rendering of a legal or professional opinion on any specific factual situation. Always seek appropriate legal and professional business advice in the context of specific cases.

2. Goals of the Course  Understand the roles and responsibilities that each member of the team (counsel, insured, carrier) plays in the claim litigation process  Know how developing effective communication strategies favorably affects results  Appreciate resolution strategy development and its import

3. Goals of the Course  Understand the impact of litigation management  Understand why costs including expenses and case results matter

4. Agenda  Client Relations  Communication  Case Development and Strategy  Litigation Management  Impact of Costs and Case Results

5. Client Relations What do we mean by “Client Relations”?

6. Client Relations  What are some ways to encourage positive client relations?  What are some examples of creating negative client relations?

7. Client Relations Client expectations  Critical to discover what the client’s definition of success is  Critical to understand the client’s definition of success  Manage the client’s expectations

8. Client Relations Importance of strong relationship between defense counsel and the claim representative  Key component in achieving a good result on the claim  Increases the potential for future business for defense counsel from the claims examiner/company  Increases the potential for future business for defense counsel from other sources

9. Client Relations Who comprises the “team” in a litigated claim and what are their roles and responsibilities?  Defense counsel  Insured  Carrier

10. Client Relations  What is the tri-partite relationship?  What ethical issues does this relationship present?  What is the duty of confidentiality owed by defense counsel to the insured?

11. Communication  Timely  Frequent  Comprehensive (anticipate and understand what information is important to the carrier)

12. Communication Methods of communication  Email  Phone  Reports

13. Communication What does the insurance company do with the information you provide them with during the pendency of the claim/litigation?

14. Communication Reports provided must conform to Litigation Guidelines in terms of content and timeliness. Reporting timeframes and required content within guidelines are built around client’s internal SOPs and best practices for litigation management. For example, Initial Case Assessment is required from counsel within 45 days because all litigated claims must be conferenced internally within 60 days.

15. Communication  It is the responsibility of a claim handler to establish and maintain accurate reserves in a timely fashion.  New information must be provided in a timely fashion.  Information from counsel assists claim handler with reserving process.

16. Case Development and Strategy “If you don’t know where you are going, you might wind up someplace else.” — Yogi Berra

17. Case Development and Strategy In the first 90 days of the case, develop a “roadmap” for the claim.  Critical to the appropriate handling of the matter  Frequent communication with the carrier in order to develop case strategy  Agree with the claims representative on what constitutes “success” for this claim

18. Case Development and Strategy Information Gathering  Obtain from the claims representative all information they have relative to the claim  Meet with the insured  Identify external sources

19. Case Development and Strategy What information does the claims representative want and expect to know during the first 90 days of the case?

20. Case Development and Strategy Expectation that defense counsel will continue to keep the claims representative apprised of all significant developments. What constitutes a “significant” development?

21. Case Development and Strategy Mediation  Mediation should not be agreed to without the consent of the claims representative.  A mediator should not be selected without the consent of the claims representative.  Do not commit to in-person attendance by the claims representative without authority.  Provide mediation brief to the claims representative prior to exchanging with other parties.

22. Trial  Be sure to communicate trial date as soon as it is received. Communication should be in writing.  Ensure that pre-trial reports are timely.  Ensure that pre-trial reports are prepared in accordance with the carrier’s requirements.

23. Litigation Management What is Litigation Management?

24. Litigation Management The CLM defines litigation management as: “The implementation of comprehensive strategies in order to achieve favorable claim resolutions and efficiency in either the litigation process or pre- litigation dispute resolution. Effective litigation management will yield measurable data aimed toward providing fiscal predictability in the litigation process and which facilitates informed strategic decision- making for future litigation planning.”

25. Litigation Management Essentials of Litigation Management Collaboration  Fully utilize the expertise of counsel and claim professional Timely and Accurate Information  “No Surprises” Analysis and Advice  Overall Litigation Strategy  “Settle or Try”  Evaluation

26. Litigation Management Litigation Guidelines  A framework for collaboration with counsel designed to bring about the best possible defense for the insured in an efficient and effective manner.  Establish client expectations/service level agreement.  Outlines reporting and billing expectations.

27. Impact of Costs and Case Results Loss Cost Triangle Unallocated Loss Adjusting Expense (ULAE) — claim department overhead, IT costs, salaries, etc. Allocated Loss Adjusting Expense (ALAE) — claim handling expenses allocated directly to a specific claim including, investigators, independent adjusters, attorneys, experts, etc. Indemnity — loss payments including settlements and verdicts. External Factors — legal environment, regulatory environment, economy, customers and stakeholders.

28. Impact of Costs and Case Results ULAE ALAE Indemnity Focus is on what we can control: ALAE & Indemnity (Total Loss Costs) Legal Climate Regulatory Climate Economy Customers Shareholders

29. Impact of Costs and Case Results Claim Department performance is evaluated based upon total loss costs. Key Metrics  Cycle time  Total expense per closed file  Total indemnity per closed file  Method of disposition This underscores the importance of formulating a litigation plan at the outset.

30. Impact of Costs and Case Results Why is it important?  Loss and expense payments factor into loss histories of insureds  Impact rates and renewals  Impact actuarial analysis and projections  Impact business strategies  Loss and expense ratios are key components of combined operating ratio (COR)  COR is a key indicator of profitability and a key component of return on equity (ROE)

31. Client Relations, Expectations and Confidentiality Chris Carucci Matt Morrison