Litigation Management

to a multi-million dollar loss. Claims and litigation professionals need to make sure they know their incident response team and what they can expect from each team member.

Litigation professionals need to evaluate their return on the dollars spent when hiring experts. Are your experts billing at a lower hourly rate but invoicing more hours than a company that might have higher rates but bills fewer hours? Are you able to cut down on claims payments and litigation costs when a certain company is hired? Are your current expert reports going to stand up to a Daubert/Frye challenge from opposing counsel?

When arranging response teams for certain practice areas, carrier lines of business or risk management exposures, it is important to make sure the appropriate team is in place. This involves keeping cost and litigation factors in mind, while still providing an expert capable of withstanding a Daubert or Frye challenge if the loss ends up in litigation. In today’s legal system, companies have to think of every claim having the potential to go the distance and end up in litigation.

Outside Defense Counsel’s Perspective

By Scott W. Bermack

Having defended retailers and property own- ers for more than 20 years, there are only a few things I enjoy more than getting a call from a client within 24 hours of a significant incident or event. What a luxury! I have an
opportunity to inspect conditions, meet and evaluate eyewit-
nesses and speak with management personnel responsible for
the smooth operation of the premises. One cannot overesti-
mate the importance of preserving evidence, such as surveil-
lance footage, and of capturing impressions either in photo-
graphs or in written statements. Review by expert witnesses
at this point can be comprehensive in scope and enlighten-
ing in substance. Further, such early involvement also allows
defense counsel to work with the client to develop a corporate
response plan and help all involved to speak with one voice to
the extent crisis management is appropriate.

In retail operations in particular, the work force tends to be young and somewhat transient, so locating key witnesses become more challenging with each passing month. By the time suit is filed, often years later, formers employees — even management level — can either disappear or become hostile. Working with the team early on empowers the employees to assist in formulating a defense strategy, which can be ready if a lawsuit is filed. Reducing the facts to sworn statements can become quite useful in the face of witnesses who either can’t recall the circumstances or change their version by the time formal discovery is underway.

I’ve made the recommendation of early claim investigation to many risk management groups and a nearly universal response is that management wants its employees to sell widgets, not investigate claims. While I certainly recognize that sales must be a priority, there aren’t too many defendants who are comfortable losing defensible cases because a key piece of evidence was destroyed or a critical witness could not be located.

Not every accident results in a lawsuit and indeed, not every exposure warrants the early intervention of counsel. Identifying those losses where the potential damage justifies the expense of preparing an early defense will pay for itself in no time. LM

Randy F. Jouben, ARM, CBCP, AIC is the Risk Manager of Five Guys Enterprises, LLC. Ryan W. Siekmann is a National Account Executive at SEA Ltd. Scott W. Bermack, Esq., is a Trial Partner in the New York City office of LeClair Ryan, PC and the co-chair of the firm’s Retail Industry Team.