How To Pursue and Win the
Complex Claim
RIMS 2012 – Philadelphia, PA
Wednesday, April 18, 2012
Ty Childress,
Partner, Jones Day
Los Angeles, CA
[email protected]
(213) 243-2422
John Frantz
Vice President and Associate General Counsel
Verizon Communications
[email protected]
(908) 559-5731
Sheila Small
Assistant Treasurer, Risk Management
Verizon Communications
[email protected]
(908) 559-5829
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THE MEMBERS OF THE TEAM
THE RISK MANAGER
 POTENTIAL STRENGTHS
 Understands the policy and underwriting
history
 Has a good grasp of the business
relationship with the insurer
 Can help assess impact of this claim on
overall insurance relationship
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THE MEMBERS OF THE TEAM
THE RISK MANAGER
 POTENTIAL WEAKNESSES
 Less willing to pursue aggressive strategy if it
involves conflict with professional
relationships
 Less attuned to legal arguments
 Less knowledge of how similar claims are
being handled by other policyholders
 (Over)concern of premium impact on claim
pursuit
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THE MEMBERS OF THE TEAM
THE IN-HOUSE ATTORNEY
 POTENTIAL STRENGTHS
 Can offer perspective of overall business
objectives of client
 Brings understanding of legal issues and legal
strategy
 Early integration in policy negotiations can
enhance coverage
 Can monitor cost-effectiveness of alternative
strategies
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THE MEMBERS OF THE TEAM
THE IN-HOUSE ATTORNEY
 POTENTIAL WEAKNESSES
 Often focused on liability claims and brings
defense-oriented perspective
 Coverage claim not always perceived as high
profile within company
 Workload limitations
 Lack of insurance expertise
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THE MEMBERS OF THE TEAM
THE OUTSIDE COUNSEL
 POTENTIAL STRENGTHS
 Legal expertise in insurance issues
 More familiar with insurer negotiating strategy
 Able to marshal resources quickly
 Not encumbered with internal company
politics
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THE MEMBERS OF THE TEAM
THE OUTSIDE COUNSEL
 POTENTIAL WEAKNESSES
 Not as sensitized to internal company needs
 May be less sensitive to impact to business
relationship with insurer
 Can let case take on a “life of its own” if not
monitored
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THE MEMBERS OF THE TEAM
THE BROKER
 POTENTIAL STRENGTHS
 Familiarity with insurance industry
 Potential commercial leverage
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THE MEMBERS OF THE TEAM
THE BROKER
 POTENTIAL WEAKNESSES
 Generally not privileged communications
 Not familiar with legal issues
 Not sensitive to internal company objectives
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DEVELOPING THE STRATEGY
Understanding The Underlying Claim
 What is the exposure?
 One-time or recurring issue?
 What potential arguments in the coverage
claim could be inconsistent with underlying
defense?
 Timing considerations
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DEVELOPING THE STRATEGY
Understanding The Coverage
 What coverage is potentially implicated?
 Were these exposures discussed during
underwriting process?
 Other parties’ coverage available?
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DEVELOPING THE STRATEGY
Understanding The Company’s Objectives
 Is this a bet-the-company exposure?
 Need for a defense?
 Is company prepared to fully assert its legal
rights?
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TENDERING THE CLAIM
Who?
 By risk manager, in-house counsel, or outside
counsel?
 What message is sent?
 Who is your “company witness”?
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TENDERING THE CLAIM
Which Policies?
 All policies?
 Third party’s policies versus company’s own
policies?
 “Targeted tender”
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TENDERING THE CLAIM
How?
 Is there a risk of a forum battle?
 Do you sue simultaneously?
 Do you ask for specific acts or just
precautionary notice?
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NEGOTIATING THE CLAIM
Role of Risk Manager
 Can use outside counsel as “bad cop” to push
insurer to negotiating table
 Can offer perspective on overall insurance
relationship
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NEGOTIATING THE CLAIM
Role of In-House Counsel
 Uniquely situated to balance legal strengths,
costs, and company objectives
 Can facilitate team communications
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NEGOTIATING THE CLAIM
Role of Outside Counsel
 Can aggressively advocate company’s legal
rights
 Can develop legal plan to maximize exit
strategy opportunities
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LITIGATING THE CLAIM
Role of Outside Counsel
 Brings legal expertise and resources to bear
 Full understanding of procedural aspects of
litigation
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LITIGATING THE CLAIM
Role of In-House Counsel
 Monitors proper internal and external
resource allocation
 Coordinates underlying claim strategy with
coverage strategy
 Can help translate legal process to client
constituencies
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LITIGATING THE CLAIM
Role of Risk Manager
 Serves as critical company witness
 Can monitor insurer conduct to assess future
role of insurer in program
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SETTLING THE CLAIM
The Outside Counsel
 Identify important timing issues for leverage
 After filing suit?
 After critical threshold motions decided?
 After witnesses deposed?
 On courthouse steps?
 On appeal?
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SETTLING THE CLAIM
The Outside Counsel
 Identify personality of mediator needed
 Develop mini-trial presentation to show other
side’s decisionmakers
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SETTLING THE CLAIM
The Risk Manager
 Identify other side’s decisionmakers
 May be able to add business elements to
settlement
 Identify renewal issues, impact on other
claims
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SETTLING THE CLAIM
The In-House Counsel
 Has broadest perspective on underlying claim
legal strategy, coverage legal strategy, costs
 Important internal advocate for claim team
decisions
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CONCLUDING THOUGHTS
Risk Manager Perspective
 Establish relationships with key insurer personnel
 Maintain close working ties with Legal Department
In-House Legal Perspective
 Anticipate company exposures when negotiating
coverage
 Persistence matters
Outside Counsel Perspective
 Acknowledge team members’ strengths and
weaknesses
 Provide real-time practical guidance and expertise
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