Successfully Defending Insurance Litigation

Monday, June 1, 2009 - 01:00

Whether providing a defense for assureds pursuant to a liability policy or defending the insurance company itself in a coverage dispute or other claim, the key to a successful outcome is essentially the same. Litigation is serious and costly business. Unfortunately, too many litigations are simply without merit and are intended to intimidate or coerce insurance companies who are perceived as easy targets with ample resources and a fear of negative publicity. Too often insurance litigation counsel behave defensively rather than offensively thus allowing plaintiff's counsel to dictate the direction and pace of the case. GCs and claims managers for insurance companies need the confidence and courage to choose the best possible advocate for their cause rather than reflexively retaining the next firm in line on their approved counsel list.

How To Win

Winning is the only option. Once a decision has been made to defend a case, there must be a conscious and passionate commitment to a successful conclusion. Without this component firmly entrenched, winning becomes only a theoretical construct based on luck and wishful thinking. What follows are our "Ten Commandments" of how to litigate successfully: commitment to winning as discussed above;preparation, which is the hallmark of any successful litigation strategy; articulating a theory of the case, which is essential for a favorable outcome; retention of the best possible experts early on so that counsel has the benefit of this knowledge before committing to a theory and strategy; open and honest communication between litigation counsel and in-house attorneys so that there are no surprises; appreciation for your audience be it adversary, judge or jury and establishing the right tone; the aggressive pursuit of discovery only that is necessary, without wasting time or money with unending fishing expeditions; a candid and honest approach to the expense of each phase of the litigation; command of the facts; and mastery of the applicable law. Each of these areas deserves its own article but experienced and wise insurance counsel know that these pillars are the necessary foundation for litigation success.

How To Reduce Costs

It's no secret that too many cases are "over-lawyered" and thus over-billed. Yet, it is easy to reduce litigation costs without sacrificing quality or compromising results. Most insurance companies could cut their litigation budgets in half without adversely impacting the outcome of any of their matters. Cost containment is a legitimate and necessary aspect of litigation and any outside counsel that does not respect this reality should be replaced with those that do. We suggest consideration of the following billing tips that will significantly reduce your litigation bills:

a. Rarely is there a need for more than one attorney to be present at Court conferences, oral arguments or depositions. Why clients tolerate multiple attorneys to argue a motion or carry a briefcase is inexplicable to us. Reduce the number of attorneys working on your files;

b. Motions should not be made without the permission of in-house counsel. Most motions are unnecessary and almost all are absurdly long and costly. Your attorneys should try to resolve issues by letter or phone call. If these attempts fail, a telephone conference with the Court will almost always settle the issue;

c. Depositions are another area rife with abuse. Instead of automatically deposing every witness under the sun, your attorneys should try to obtain a signed witness statement. Only truly material witnesses should be deposed and only one skilled attorney is required;

d. Limit the number of intra-office conferences your attorneys bill;

e. Legal research requiring more than ten hours on any one issue should be approved in advance;

f. Agree in advance on reasonable rates. There is simply no reason to pay an excessive amount to retain top-notch legal talent;

g. Advise counsel how often you want to be billed and the format you prefer;

h. Bills need to be periodically checked to see that you are paying reasonable rates for faxing, copying and computer charges.

Insurance companies should look to themselves when confronted with bloated litigation costs. Much of the work being paid for is unnecessary, unrelated to the ultimate outcome, and billed at unreasonable rates. With the suggestions proposed in this brief article, most responsible corporate counsel and claims managers can quickly and easily reduce their litigation budget without compromising the quality of services they receive or sacrificing the results they demand.

David J. Meiselman and Jeffrey I. Carton are Senior Litigation Partners in the White Plains firm of Meiselman, Denlea, Packman, Carton & Ebertz P.C. The firm represents plaintiffs and defendants in state and federal courts throughout the country. Messrs. Meiselman and Carton have been selected by their peers for inclusion in Best Lawyers and Super Lawyers and were noted in 2008 to be amongst the top New York Metro Area attorneys in the Westchester area of Business Law.

Please email the authors at dmeiselman@mdpcelaw.com or jcarton@mdpcelaw.com with questions about this article.