Why Are Attorney Evaluation Reports Sometimes So Light?
I was recently conducting an audit of claim files and had the opportunity to review a significant number of Attorney Evaluation reports from a variety of law firms. Like many other things in life, some were better than others. What seemed to be most glaringly consistent was the inability of counsel to truly provide an assessment of exposure and what the case is worth.
When asked to assess exposure, the typical response was to state that the insured had a 50% chance of winning the case. While I would agree that there are instances when this may actually be the case, often times it’s not. One report I read stated that the attorney felt the case was probably defensible, but with additional information they may not be able to defend the case. Why is it so difficult for some attorneys to give a comprehensive assessment? Is there a fear that if an attorney says one thing, they can’t change their mind later? When circumstances change, new information is developed, or issues are uncovered, it is perfectly reasonable that evaluations need to be adjusted accordingly.
I would submit that an experienced defense attorney, that has seen hundreds of similar cases, has a pretty good idea of what the issues are in a case. Claim handlers can, and should, expect their defense counsel to clearly evaluate liability and damages and express those evaluations coherently in their reports. Counsel should be providing full evaluations at least every six months or after significant changes in discovery.
At the very least, attorney evaluations need to provide the following 5 components in their reports:
- Introduction – All reports should start with a few sentences outlining the facts of the claim, and should not require reading though 8 pages to find out what the case is about. An example of a concise introduction would be “This case is about the alleged wrongful death of a 29 year old stockbroker, father of three children, after he was struck by our insured’s vehicle being driven by an intoxicated driver.” In fact, that type of introduction can be used in every letter sent by defense counsel regarding the case.
- Factual Summary – A summary is a summary (I know – never define a word with the same word – but it seems appropriate here). When line-by-line details are relevant, then they should be spelled out. Otherwise, a concise assessment of important facts, and how they impact the case, is all that is needed to explain all aspects of the file. Counsel should also describe pertinent testimony, how it impacts liability or damages, and state how the witness would present to a jury at trial.
- Liability Assessment – An evaluation of liability needs to address all the parties in the case and not just the insured. Each of the plaintiff’s allegations should be discussed, and how the defense will be able to respond. Sometimes a defense would not serve to completely negate liability, but only serve as a way to reduce liability or damages. If this is the case it should be clearly stated so a proper assessment can be made. An example of a concise statement on liability would be “I believe the insured has problems with liability as they were aware the driver sometimes drank at lunch to “calm his nerves.” While the 29 year old decedent was speeding, and may have ran a stop sign, it may only serve to mitigate a small apportionment of liability.” Another valuable tool is to list out all the defendants and show each of their percentages of fault.
- Damages – This really should be the easiest section of the report to write up. A simple list of all the economic damages followed by ranges for potential non-economic recovery would clearly spell out the total extent of possible exposure. Additional information that could affect the outcome can also be clearly stated like this example: “Despite being unemployed, the decedent taught Sunday school and took care of his sick wife while raising his two small children on his own.” A great suggestion from a colleague is for counsel to base their report on the particular jury charge that would apply in the case. Verdict research is also helpful and readily available. In the end, counsel should come up with a damage assessment of the full value of the case and then factor in the liability apportionment.
- Conclusions and Recommendations – Attorneys are being paid for their opinions and expertise, and they should be providing that experience in their reports. A clear statement should sum up counsel’s position on the case, and the relevant next steps. Upcoming discovery expenses, as well as any out-of-the-ordinary expenses that may be incurred (i.e. investigators, experts, trial exhibits, etc.) should be listed to allow the claim handler to manage expense budgets better.
Good Reports Are Cost Effective and Allow Handlers to Make Informed Decisions
When reports include all of the potentially relevant and appropriate information, a claim handler can make a more informed decision. Reserves can be assessed and changed when needed, and expenses can be managed more effectively. I was able to see this in practice at another client I recently worked with. This client worked proactively and diligently with counsel to get them to follow the structure I outline above. The client’s Director of Claims told me that they “are paying for [counsel’s] evaluation, and wanted them to put their neck out.” He went on to say that they truly partner with their attorneys and acknowledge that they “win together and lose together.” It was clear from reading these reports that counsel enjoyed writing them, and according to the client, also enjoyed the challenge of providing a complete evaluation.
A good report will tell the story of the entire case in a concise and comprehensive manner. Defense counsel and claims professionals need to work together to help resolve the claim using the most expeditious and appropriate approach. Good reporting will help the process. Sit down with counsel and come up with a format that works for everyone. Don’t be afraid to send a report back to counsel and ask them to state their position so a proper evaluation can be made.