In answering a question about keys to successful outcomes in insurance coverage and bad faith litigation at a recent conference, it occurred to me there are several critical elements, which, if taken care of within the first 30 days of any bad faith case, will enhance the prospects of a successful outcome. I offer a list of those elements below, but I would love to hear any ideas our readers have on the same topic; please e-mail them to me at [email protected].
Here are some of the more important things that came to mind:
1. Where Are We Litigating?
Jurisdiction and venue are at times overlooked in bad faith cases. To those lawyers representing insureds, they have the first opportunity to select jurisdiction and venue and therefore, an assessment of which setting would be more favorable to the insured is of utmost importance. The defendants may have a say also, however, inasmuch as a bad faith case may be removable by the defendant to federal court if the requirements under the federal removal statute are met.
2. Immediate Assessment of Pleadings.
The scope of the bad faith case will be defined, now and later, by the pleadings. Are there any matters set forth in the complaint or defenses set forth in the answer that are susceptible to legal challenge, and which might be stricken at the outset? While often this decision must be made in a very brief amount of time, it is nevertheless critical, inasmuch as both insurers and insureds should try to define the issues in a case in a way that works to their respective advantages.
3. Information Gathering.
Before you begin your review in a bad faith case, whether on behalf of an insurer or insured, you must know what to review, and you must be reasonably certain that all important information has been obtained. Counsel for the insured will, as part of their initial interview and assessment of the case, obtain from their her client as much documentation as possible concerning both the insured's coverage at issue and process of the insurance claim, which is the subject of the bad faith suit. So, counsel for insurers must make sure they immediately receive all relevant documentation, especially the entirety of the claims file, usually composed of activity logs, claim documents, correspondence and other documents, whether paper or electronic.
4. Intensive Document Analysis
Both sides in bad faith litigation will benefit from their counsel's early, aggressive and thorough analysis and review of the claims documentation at issue. In counsel's reviewing the documentation at least two purposes are served. First, counsel can make an early assessment of the strengths and weaknesses of the bad faith case. Second, a thorough review of the claims records produces a roster of knowledgeable individuals at the insurance company who should be thoroughly interviewed to complete the initial assessment process, or in the case of insured's counsel, who should be deposed. Information begets information.
5. Ask Questions.
Once the documentation has been reviewed, counsel for insureds should meet not only with their client, but potentially the insured's agent to determine whether or not any useful information can be obtained from the insurance agency that procured the policy.
The task of interviewing is generally more comprehensive for those lawyers representing insurers in the early stages. Each and every individual in the claims process, from the claims adjuster to the claims manager and possibly higher if individuals higher up in the chain of command who were involved in the claims decision must be thoroughly questioned regarding the documents, and the claim itself. Inconsistencies in the documents can often times be explained, or problem spots identified and counsel may receive additional information which would prompt them to raise additional claims and defenses, or adjust their assessment of the case.
6. Get More Information and Continue to Refine Your Thinking.
Relatively quickly in the litigation process, counsel should issue interrogatories and request for production of documents to the other side and continually try to fill in as many informational gaps as possible regarding the insurance claim at issue. In addition, third parties such as insurance agents, or other witnesses with important knowledge can be subpoenaed for their documents, and possibly their depositions as well. The receipt and analysis of these documents oftentimes falls outside of the initial 30-day period, but to the extent any requests for information can be made within the first 30 days, they should be. Receipt of the information in response to such requests serves to allow counsel for insurer and insured to continue to refine their assessment of the merits of the bad faith case.
7. Feed the Information Back to Your Client.
Bad faith counsel should, at or near the end of the 30-day period, be able to provide their client with a reasonably solid assessment of the relative strengths and weaknesses of the positions in the bad faith case. For those counsel representing insurers, they are oftentimes required to furnish comprehensive initial suit analyses and chronological analysis of the claims documents within the first 30 to 45 days following assignment.
Good initial reporting will include the results of interviews of key claims personnel, in the case of bad faith defense counsel.
What's So Important About the First 30 Days?
The more information counsel develops within the first 30 days of accepting the bad faith suit assignment, the better able she is to assess the prospects for the case and begin handling it efficiently. The above list will assist counsel in getting the 30-day ball rolling.
Charles Haddick
Dickie McCamey & Chilcote
http://www.dmclaw.com
Here are some of the more important things that came to mind:
1. Where Are We Litigating?
Jurisdiction and venue are at times overlooked in bad faith cases. To those lawyers representing insureds, they have the first opportunity to select jurisdiction and venue and therefore, an assessment of which setting would be more favorable to the insured is of utmost importance. The defendants may have a say also, however, inasmuch as a bad faith case may be removable by the defendant to federal court if the requirements under the federal removal statute are met.
2. Immediate Assessment of Pleadings.
The scope of the bad faith case will be defined, now and later, by the pleadings. Are there any matters set forth in the complaint or defenses set forth in the answer that are susceptible to legal challenge, and which might be stricken at the outset? While often this decision must be made in a very brief amount of time, it is nevertheless critical, inasmuch as both insurers and insureds should try to define the issues in a case in a way that works to their respective advantages.
3. Information Gathering.
Before you begin your review in a bad faith case, whether on behalf of an insurer or insured, you must know what to review, and you must be reasonably certain that all important information has been obtained. Counsel for the insured will, as part of their initial interview and assessment of the case, obtain from their her client as much documentation as possible concerning both the insured's coverage at issue and process of the insurance claim, which is the subject of the bad faith suit. So, counsel for insurers must make sure they immediately receive all relevant documentation, especially the entirety of the claims file, usually composed of activity logs, claim documents, correspondence and other documents, whether paper or electronic.
4. Intensive Document Analysis
Both sides in bad faith litigation will benefit from their counsel's early, aggressive and thorough analysis and review of the claims documentation at issue. In counsel's reviewing the documentation at least two purposes are served. First, counsel can make an early assessment of the strengths and weaknesses of the bad faith case. Second, a thorough review of the claims records produces a roster of knowledgeable individuals at the insurance company who should be thoroughly interviewed to complete the initial assessment process, or in the case of insured's counsel, who should be deposed. Information begets information.
5. Ask Questions.
Once the documentation has been reviewed, counsel for insureds should meet not only with their client, but potentially the insured's agent to determine whether or not any useful information can be obtained from the insurance agency that procured the policy.
The task of interviewing is generally more comprehensive for those lawyers representing insurers in the early stages. Each and every individual in the claims process, from the claims adjuster to the claims manager and possibly higher if individuals higher up in the chain of command who were involved in the claims decision must be thoroughly questioned regarding the documents, and the claim itself. Inconsistencies in the documents can often times be explained, or problem spots identified and counsel may receive additional information which would prompt them to raise additional claims and defenses, or adjust their assessment of the case.
6. Get More Information and Continue to Refine Your Thinking.
Relatively quickly in the litigation process, counsel should issue interrogatories and request for production of documents to the other side and continually try to fill in as many informational gaps as possible regarding the insurance claim at issue. In addition, third parties such as insurance agents, or other witnesses with important knowledge can be subpoenaed for their documents, and possibly their depositions as well. The receipt and analysis of these documents oftentimes falls outside of the initial 30-day period, but to the extent any requests for information can be made within the first 30 days, they should be. Receipt of the information in response to such requests serves to allow counsel for insurer and insured to continue to refine their assessment of the merits of the bad faith case.
7. Feed the Information Back to Your Client.
Bad faith counsel should, at or near the end of the 30-day period, be able to provide their client with a reasonably solid assessment of the relative strengths and weaknesses of the positions in the bad faith case. For those counsel representing insurers, they are oftentimes required to furnish comprehensive initial suit analyses and chronological analysis of the claims documents within the first 30 to 45 days following assignment.
Good initial reporting will include the results of interviews of key claims personnel, in the case of bad faith defense counsel.
What's So Important About the First 30 Days?
The more information counsel develops within the first 30 days of accepting the bad faith suit assignment, the better able she is to assess the prospects for the case and begin handling it efficiently. The above list will assist counsel in getting the 30-day ball rolling.
Charles Haddick
Dickie McCamey & Chilcote
http://www.dmclaw.com
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