Tag Archives: litigation

Fixing the Economics of Securities Defense

In my last D&O Discourse post, “The Future of Securities Class Action Litigation,” I discussed why changes to the securities litigation defense bar are inevitable: In a nutshell, the economic structures of the typical securities defense firms — mostly national law firms — result in defense costs that significantly exceed what is rational to spend in a typical securities class action. As I explained, the solution needs to come from outside the biglaw paradigm; when biglaw firms try to reduce the cost of one case without changing their fundamental billing and staffing structure, they end up cutting corners by foregoing important tasks or settling prematurely for an unnecessarily high amount. That is obviously unacceptable.

The solution thus requires us to approach securities class action defense in a new way, by creating a specialized bar of securities defense lawyers from two groups: lawyers from national firms who change their staffing structure and lower their billing rates and from experienced securities litigators from regional firms with economic structures that are naturally more rational.

See Also: Future of Securities Class Actions

But litigation venues are regional. We have state and federal courts organized by states and areas within states. Because lawyers need to go to the courthouse to file pleadings, attend court hearings and meet with clients in that location, the lawyer handling a case needs to live where the judge and clients live.

Right?

Not anymore.

Although the belief that a case needs a local lawyer persists, that is no longer how litigation works. We don’t file pleadings at the courthouse; we file them on the Internet from anywhere (even from an airplane). These days, in most cases, there are just a handful of in-person court hearings. And the reality is that most clients don’t want their lawyers hanging around in-person at their offices because email, phone calls and Skype suffice. Even document collection can be done mostly electronically and remotely. And with increasingly strict deposition limits and witnesses located around the country and the world, depositions don’t require much time in the forum city, either.

In a typical Reform Act case, where discovery is stayed through the motion-to-dismiss process, the amount of time a lawyer needs to spend in the forum city is especially modest. If a case is dismissed, the case activities in the forum city (in a typical case) amount only to (1) a short visit to the client’s offices to learn the facts necessary to assess the case and prepare the motion to dismiss and (2) the motion-to-dismiss argument, if there is one. Indeed, assuming a typical securities case requires 1,000 hours of lawyer time through an initial motion to dismiss, fewer than 50 of those hours — one-half of 1% — need to be spent in the forum city.  The other 99.5% can be spent anywhere.

Discovery doesn’t change these percentages much.  Assume it takes another 10,000 hours of attorney time to litigate a case through a summary judgment motion (so 11,000 total hours). Four lawyers/paralegals spending four weeks in the forum city for document collection and depositions (a generous allotment) yields only another 640 hours. So, in my hypothetical, only 0.63% of the defense of the case requires a lawyer to be in the forum city. The other 99.37% of the work can be done anywhere. Because a biglaw firm would litigate a securities class action with a larger team, the total number of hours in a typical biglaw case would be much higher (both the total defense hours and the total number of hours spent in the forum city), but the percentages would be similar.

And the cost of travel does not move the economic needle. Of course, if a firm is willing not to charge for travel time and travel costs to the forum city, there is no economic issue. My firm is willing to make this concession, and I would bet others are, as well. Even if a firm does charge for travel cost and travel time, the cost is minuscule in relationship to total defense costs. For example, my total travel costs (airfare and lodging) for a five-night trip to New York City are typically less than the cost of two biglaw partner hours.

Of course, there are some purposes for which local counsel is necessary, or at least ideal: someone who knows the local rules, is familiar with the local judges and is admitted in the forum state. But the need to use local counsel for a limited number of tasks doesn’t present any economic or strategic issue, either — if the lawyers’ roles are clearly defined. Depending on the circumstances, I like to work either with a local lawyer in a litigation boutique that was formed by former large-firm lawyers with strong local connections or with a lawyer from a strong regional firm. I just finished a case where the local firm was a boutique and a case where the local firm was another regional firm. In both cases, the local firms charged de minimis amounts. In some cases, the local firm can, and should, play a larger role, but whatever the type of firm and its role, the lead and local lawyers can develop the right staffing for the case and work together essentially as one firm — if they want to.

All of these considerations show securities litigation defense can and should be a nationwide practice. It is no longer local. We need to look no further than the other side of the “v” for a good example. Our adversaries in the plaintiffs’ bar have long litigated cases around the country, often teaming up with local lawyers from different firms. Like securities defense, plaintiffs’ securities work requires a full-time focus that has led to a relatively small number of qualified firms. The qualified firms litigate cases around the country, not just in their hometowns or where their firms have lawyers.

This all seems relatively simple, but it requires us all to abandon old assumptions about law practices that are no longer applicable and embrace a new mindset. Biglaw defense lawyers need to obtain more economic freedom within their firms to reduce their rates and staffing for typical securities cases, or they must face the reality that their firms perhaps are better-suited only for the largest cases. Regional firms must recruit more full-time securities litigation partners and be willing not to charge for travel time and costs. And companies and insurers must appreciate that securities litigation defense will improve — through better substantive and economic results in both individual cases and overall — if they recognize a good regional firm with dedicated securities litigators can defend a securities class action anywhere in the country and can usually do so more effectively and efficiently than a biglaw firm.

Power of ‘Claims Advocacy’

“Claims advocacy” is fast getting the attention of workers’ comp claims leaders as a powerful approach to better claims outcomes. The on-demand economy has created cultural and multi-generational expectations around service, speed and simplicity, and some claims leaders have already figured out how to deliver.

The workers’ compensation industry is in the throes of internal debate about mission and purpose.  Employee-centric claims models have become a large part of this debate. Some claims leaders say that payer organizations should move away from a compliance-oriented and, at times, adversarial style to an “advocacy” style of claims management.

Research, too, indicates that claims advocacy is top of mind for industry executives. The responses of 700 participants in Rising Medical Solutions’ Workers’ Compensation Benchmarking Study confirm that many claims leaders know the building blocks of advocacy and recognize its potential value. 

We recently interviewed claims leaders to better understand the practical meaning of the concept, as it applies to all claims operations, from self-administered employers to insurers handling claims for thousands of policyholders.

What Is Claims Advocacy?

We asked Noreen Olson, workers’ compensation manager with Starbucks, for a definition of advocacy.  (Starbucks employs 180,000 “partners” worldwide and has close to 12,000 outlets in the U.S.) Olson proposed this:

“In workers’ comp, advocacy is a process grounded by the values of dignity, respect and transparency that coordinates activities to assist the injured worker effectively and promote expectancy and engagement in recovery, efficiently restores (and often improves upon) health and well-being, and resolves the experience in mutual satisfaction.”

Others we spoke with endorsed this or a similar definition. They all have in mind not a checklist, nor a charm offensive, but a culture.  A claims culture that makes access to benefits simple and builds trust – and one that must be supported by executive buy-in, organizational values, technology and operating systems to be successful.

Access to benefits from the worker’s perspective includes ease of filing a claim, ease in obtaining prescribed medications, access to medical specialists and help in navigating the healthcare maze. Along the course of injury recovery, there are many opportunities that affect access and trust as perceived by the worker. The highly respected Workers’ Compensation Research Institute reports in its Predictors of Worker Outcomes Series that “trust” is a key driver of claims outcomes.

See also: How Should Workers’ Compensation Evolve?

Why Now?

Tom Stark, technical director of workers’ compensation at Nationwide Insurance, told us that advocacy has been around for a long time. He’s practiced advocacy since the 1980s Several forces converge to promote advocacy in claims today. Claims leaders are emphasizing, or perhaps “reemphasizing,” the importance of interpersonal relations. As claims handling has shifted from onsite home visits to lower contact models, the importance of emotional intelligence, soft skills and customer service skills is greater than ever to dispel uncertainty and engender trust.

Perhaps the biggest driver of customer service and transactional speed is the American retail sector. Its massive engagement in these areas has shaped everyone’s expectations – of all generations. Millennials, born in the 1980s and 1990s, in particular have grown up with this customer-focused approach and therefore bring to the claims environment high expectations for both delivering and receiving quality service. Slow, bureaucratic responses can shock injured workers. Darrell Brown, chief claims officer at Sedgwick, says, “We are now an on-demand economy. That is the way it is.”

Why Is Claims Advocacy Attractive?

Brown says that engaging the injured worker is key. Fast and helpful response to injury pays off in worker satisfaction and lower claims costs. “People file claims, but they don’t know what is going to happen. If you lose injured workers at the beginning of the claim, to anxiety and fear, they go to litigation.” Brown also says that when claims professionals engage more constructively with injured workers, their own experience is better. This leads to better morale and talent retention.

For employers, claims advocacy provides a special opportunity to directly align work injury response with their corporate brand, core values, employee communications and benefit delivery.

Walking the Walk

Albertsons Safeway, with more than a quarter million “associates” in 34 states, has crafted its claims approach to reinforce engagement and confidence for the injured workers. Director of Managed Care and Disability Denise Algire, who is also the principal researcher for the Workers’ Compensation Benchmarking Study, says that staff talks with injured employees on the day of injury. “We focus on education and reducing uncertainty,” she says.  They avoid potentially intimidating or antagonistic terms like “adjusting,” “examining” and “investigating.” They also start with the positive expectation that every employee wants to return to work. “Workers’ compensation has become adversarial because we manage the system based on the deceptive few versus the deserving many,” she says. “Our claims approach is based on the majority, not the minority.”

Brown talked to us about tangible actions. “If you can make a compensability determination in two days, even though the law gives you 14 days, imagine how much uncertainty and anxiety is removed,” he says. “The same applies to indemnity payments. The industry is often guided by regulatory requirements. If you can take action and make payments sooner, why make it later? You’ve got to walk the walk.” Starbucks, for example, direct deposits indemnity checks into employees’ accounts to increase speed.

Advocacy does not hinder organizations from being compliance-minded. Rather, it becomes one aspect of a holistic, customer-driven framework that aims higher than the bar often set by regulatory standards.

See Also: How to Win at Work Comp Claims

Barriers to Overcome

Stark sees lagging technology as getting in the way of engaging the injured worker. To him, claims tasks grew exponentially while support staff in claims offices were cut. Claims technology has often not kept up. He says, “Look at the work-arounds – count the number of sticky-notes on the adjuster’s screen. If technology is not there to support effective claims management, even in its most transactional form, you are really stressing the model. How are you going to be an advocate?”

Olson brought up two challenges that Starbucks has solved but still confront most employers. She believes that it is important to make it as easy as possible for a partner to report an injury. At Starbucks, they not only have web, mobile and call center options, they also allow partners to self-report their injuries versus going through their manager or HR.

Olson additionally stresses the importance of easily moving the partner to other benefit programs if the injury is not compensable and to avoid language like “your claim is denied.” She says that placing the award of benefits in the “right benefit bucket” needs to be done seamlessly so that the partner does not feel on the hook. In addition to the state mandated language in these instances, Starbucks includes its own letter that communicates that, while the claim isn’t eligible for workers’ comp, the partner may be eligible for other benefits to help with their injury/illness.

One barrier that Algire notes – simply “rebranding” claims adjusters as advocates is not enough. “A true cultural shift will require organizations to move beyond performance metrics that are based primarily in cost containment to those based on clinical quality, functional outcomes and patient satisfaction,” she says. This shift is critical to “walking the walk” and reinforcing the advocacy approach with claims staff.

Conclusion

The on-demand economy has created cultural and multi-generational expectations around service, speed and simplicity – giving workers’ compensation a blueprint for claims advocacy. Embracing consumer-driven models around injury recovery is emerging as a competitive advantage, both from a claims outcomes and a talent recruitment/retention perspective.

The 2016 Workers’ Compensation Benchmarking Study will be surveying claims leaders on advocacy, among other pressing topics, to better understand its current application and perceived viability.  A copy of the 2016 Study report may be ordered here.

5 Changes Needed in Securities Litigation

I am committed to helping shape a system for securities litigation defense that helps directors and officers get through securities litigation safely and efficiently, without losing their serenity or dignity, or facing any real risk of paying any personal funds.

But we are actually moving in the opposite direction of this goal, and, unless some changes are made, securities litigation will pose greater and greater risk to individual directors and officers. It is time for the “repeat players” in securities litigation defense – D&O insurers and brokers, defense lawyers and economists – to make some fundamental changes to how we do things.

Although most cases still seem to turn out fine for the individual defendants, resolved by a dismissal or a settlement that is fully funded by D&O insurance, the bigger picture is not pretty. The law firms that have defended most cases since securities class actions gained footing through Basic v. Levinson – primarily “biglaw” firms based in the country’s several largest cities – are no longer suitable for many, or even most, securities class actions. Fueled by high billing rates and profit-focused staffing, those firms’ skyrocketing defense costs threaten to exhaust most or all of the D&O insurance towers in cases that are not ended on a motion to dismiss. Rarely can such firms defend cases vigorously through summary judgment and toward trial anymore.

Worse, these high prices too often do not yield strategic benefits. A strong motion to dismiss focuses on the truth of what the defendants said, with support from the context of the statements, as directed by the U.S. Supreme Court in Tellabs and Omnicare. Yet, far too often, the motion-to-dismiss briefs that come out of these large firms are little more than cookie-cutter arguments based on the structure of the Reform Act. And if a motion is lost, settlements are higher than necessary because the defendants often have no option but to settle to avoid an avalanche of defense costs that would exhaust their D&O insurance limits. On the other hand, if settlement occurs later, it can be difficult to keep settlement within D&O insurance limits – and defense counsel’s analysis of a “reasonable” settlement can influenced by a desire to justify the amount it has billed.

At the same time that defense costs are continuing to soar, securities class actions are becoming smaller and smaller, with two-thirds of cases brought against companies with market caps less than $2 billion, and almost half less than $750 million. Although catawampus securities litigation economics is a systemic problem, affecting cases of all sizes, the problem is especially acute in the smaller half of cases. Some of those cases simply cannot be defended both well and economically by typical defense firms. Either defense costs become ridiculously large for the size of the case and the amount of the D&O insurance limits, or firms try to reduce costs by cutting corners on staffing and projects – or both. We see large law firms routinely chase smaller and smaller cases. From a market perspective, it makes no sense at all.

So how do we achieve a better securities litigation system?  Five changes would have a profound impact:

  1. Require an interview process for the selection of defense counsel, to allow the defendants to understand their options; to evaluate conflicts of interest and the advantages and disadvantages of using their corporate firm to defend the litigation; and to achieve cost concessions that only a competitive interview process can yield.
  2. Move damages expert reports and discovery ahead of fact discovery, to allow the defendants and their D&O insurers to understand the real economics of cases that survive a motion to dismiss, and to make more informed litigation and settlement decisions.
  3. Increase the involvement of D&O insurers in defense-counsel selection and in other strategic defense decisions, to put those that have the greatest overall experience and economic stake in securities class action defense in a position to provide meaningful input.
  4. Increase the involvement of boards of directors in decisions concerning D&O insurance and the defense of securities litigation, including counsel selection, to ensure their personal protection and good oversight of the defense of the company and themselves.
  5. Make the Supreme Court’s Omnicare decision a primary tool in the defense of securities class actions. Obviously, Omnicare should be used to defend against challenges to all forms of opinions, including statements regarded as “puffery” and forward-looking statements protected by the Reform Act’s Safe Harbor. But defense counsel should also take advantage of the Supreme Court’s direction in Omnicare that courts evaluate challenged statements in their full factual context. Omnicare supplements the court’s previous direction in Tellabs that courts evaluate scienter by considering not just the complaint’s allegations, but also documents incorporated by reference and documents subject to judicial notice.  Together, Omnicare and Tellabs allow defense counsel to defend their clients’ honesty with a robust factual record at the motion to dismiss stage.

These five changes are among the top wishes I have to improve securities litigation defense, and to preserve the protections of directors and officers who face securities litigation.

legal department

2 Steps to Transform Claims, Legal Group

Technology. Innovation. Even in 2016, when “technology” and “innovation” are oftentimes brushed aside as clichéd buzzwords, technology and innovation can still be daunting to many of us. Even more daunting is implementing technology in your insurance company to transform your claims and legal department.

By breaking down innovation into the two simple steps described here, using technology to spur innovation becomes a lot less daunting. In fact, using the technology described here, you can achieve breakthrough improvements in performance while simultaneously decreasing expenses.

  1. Document Automation

Automating legal documents is a simple way to use technology to improve processes and save money. Claims and legal executives at insurance companies know that pleadings and other legal documents full of the same old legalese are par for the course. No matter the case, claims and legal executives see the same pleadings containing the same content time and again. Nevertheless, attorneys continue to charge for each legal document, and insurance companies continue to pay for each legal document. Even more troubling, these documents typically have little to no impact on the pending litigation, and they are impossible to manage.

The solution is legal document automation. Imagine if you had a robust library of hundreds of automated legal documents including pleadings, discovery, letters, notices and motions at your fingertips. These standardized forms allow for stricter quality control and instant access to top-shelf legal documents. Insurers do not pay for the same document twice, leading to huge financial savings. Perhaps most important, a software-based platform aligns with changes in strategy, case law and legislative change to ensure these are captured in every legal document. Taken together, automation allows insurers to take control of legal outcomes.

Legal documents are the toolbox of every legal department and attorney handling a case. If you are not busy and are not trying to profit, go ahead and use a hammer and nail to litigate. But if you looking to innovate and transform your department, why not use a power drill?

  1. Analytics

Insurance company executives handling claims and litigation have data. Lots and lots of data. Turning that data into intelligence is no easy task, but it is crucial in this rapidly changing insurance industry. You must move your business from yesterday’s hard data environment to today’s efficient virtual platform. Real-time intelligence, including descriptive and predictive analytics, will take your claims and legal department into the future.

Descriptive Analytics

Descriptive analytics answer one simple question: “What happened?”

Using software to capture yesterday’s hard data, your claims and legal department can transform latent data into actionable descriptive analytics, allowing you to answer many of the important questions:

  • When is the claims process most likely to break down?
  • Which adjusters and engineers realize the least overall cost, including indemnity and expense?
  • Which attorneys achieve the best combination of results and expenses?
  • What are the emerging issues and how can we mitigate them?

Predictive Analytics

Predictive analytics answer another simple question: “What might happen?”

For example, predictive analytics could provide a range of the number of times an insurance company may be sued next year based on data trends from last year.

Predictive analytics allow a claims and legal department to:

  1. Allocate resources
  2. Reserve
  3. Produce effective and efficient settlement values
  4. Identify potentially fraudulent claims
  5. Identify potentially large losses
  6. Manage expenses
  7. Analyze emerging issue trends to aid the underwriting process

Technology can capture yesterday’s hard data and makes it searchable, sortable and reportable. Further, using a customized collaboration tool with the right fields accessible to the right users, you could automatically collect the most pertinent financial data in real time. This technology allows access to descriptive and predictive analytics and gives insurers the ability to evaluate expenses and outcomes on a real-time basis, as well as obtain efficient resolutions.

By focusing on these two simple steps, insurers can turn claims and litigation expenses into valuable assets. Gone are the days of zero return on investment. Implement these two steps, and your litigation costs will produce countless opportunities to reduce expenses and write better business.

Jurors and Questions on Insurance Coverage

For most potential jurors, questions of insurance coverage do not usually arise in common conversation. Seldom cut and dried, usually subject to numerous definitions and intricacies, coverage issues can be boring and puzzling for even an experienced adjuster. Asking a lay person to try to classify an “occurrence” as defined by a policy, or whether a third party is covered as an additional insured, may prompt, at best, glazed-over eyes or, even worse, a negative commentary about insurance companies. While it may be best in some situations for a judge to determine the issue of insurance coverage, this is not always possible. Sometimes, coverage questions arise in litigation, and those interpreting policy language and determining the outcome are jurors. If jurors are deciding the issues, certain challenges then arise, such as how to clarify policy language, present a clear and concise argument and overcome negative preconceptions about the insurance industry.

Can the Judge Decide Coverage Issues?

In Louisiana, general rules regarding issues that are triable by a jury are set forth in Louisiana Code of Civil Procedure articles 1731 – 1736. These establish the general rule that a demand for a trial by jury will result in a trial by jury of all issues. However, exceptions to the general rule exist when: (a) the parties stipulate that the jury trial shall be as to certain issues only; (b) a party in his demand specifies the issues to be tried by a jury; or (c) the right to trial by jury as to certain issues does not exist. Where a jury trial has been demanded by one or both parties, the case must be tried by a jury unless both parties consent to trial without a jury or the trial court finds that a right to a trial by jury does not exist.

More particularly, La. C.C. P. art. 1562(D) specifically codified the general principle found in La. C.C. P. art. 1736 requiring a stipulation between or the consent of the parties before the trial judge can order that insurance coverage issues be tried separately, with the “court alone” deciding the issue of insurance coverage.

La. C.C.P. art. 1562(D) states:

“If it would simplify the proceedings or would permit a more orderly disposition of the case or otherwise would be in the interest of justice, at any time prior to trial on the merits, the court may order, with the consent of all parties, a separate trial on the issue of insurance coverage, unless a factual dispute that is material to the insurance coverage issue duplicates an issue relative to liability or damages. The issue of insurance coverage shall be decided by the court alone, whether or not there is to be a jury trial on the issue of liability or damages.”

The leading case on the subject is Citgo Petroleum Corp. v. Yeargin, Inc., 95-1574 (La. App. 3 Cir. 7/3/96), 678 So.2d 936, writ granted, remanded, 96-2000 (La. 11/15/96), 682 So.2d 746 and 96-2007 (La. 11/15/96), 682 So.2d 747. There, the court stated that La. C.C.P. art 1562(D) provided that, if principals of judicial efficiency or justice would be served then the court may order a separate trial on the issue of insurance coverage. However, the trial judge’s discretion is not unfettered. The judge’s ability to take the issue away from the jury is severely restricted because, under the article, all of the following conditions must exist: (1) it would simplify the proceedings, permit a more orderly disposition of the case, or be in the interest of justice; (2) the consent of all parties; (3) the non-existence of a factual dispute material to the coverage issue that duplicates an issue relative to liability or damages; and (4) the order must be rendered before trial on the merits.

Therefore, the requirements set forth in the article effectively leave the judge with no discretion, as it requires the consent of all parties. The court further noted that, while the issue of insurance coverage under an insurance policy is a narrow issue of the law between the alleged insured and the insurer, a jury is not prohibited, by statute or otherwise, from deciding this issue. Further, there is no exception to the right to trial by jury for issues that the trial judge may think are too technical or too complex for the jury to understand. Even if the trial judge believes that he is more capable than the jury of deciding the issue of coverage, he cannot take this issue away from the jury once the issue is included within the scope of issues for which a jury trial was requested, unless the conditions of La. C.C.P. art. 1562(D) are met.

As such, if a trial by jury has been requested, but an insurer is presenting technical questions of coverage and believes that a judge would be best suited to decide the coverage issue, a stipulation or the consent of all parties would be necessary before the judge could take the coverage issue away from the jury. Unfortunately, often the consent of all parties to separately try the coverage issue cannot be obtained, and the insurer is left with a jury to decide intricate and potentially costly coverage issues.

Selecting the Best Jury for Your Coverage Case

If coverage issues must be decided by a jury, the persons who make up that jury can make a difference in the outcome of the case. Questioning prospective jurors in voir dire about their current insurance policies and other contracts can provide some insight into how they view insurance companies and the potential for coverage. People often believe that they are “fully covered” under their insurance policies, and that insurers are large, prosperous companies that should be able to “help out” individuals. However, further questioning can reveal that potential jurors do understand that there are limitations as to what is covered under certain policies and what has been negotiated.

Questioning a potential juror about a policy he may currently have in place, whether that policy has a limit and if he understands that the insurance company would not be required to pay more than that limit, can show that the potential juror does understand some limitations to coverage. Additional questions may involve who the current policies provide coverage to and the limitations on that coverage. Even simple, and almost obvious, questions can help illustrate a potential juror’s understanding of coverage limitations. For example, discussing how an automobile policy might provide coverage for certain damage to an owned vehicle but would not cover general maintenance, oil changes or a monthly car payment can help provide insight into whether an individual may be able to understand the issues and be a constructive juror.

Additionally, general questions regarding the potential jurors’ opinion of insurance companies in general, personal claims experiences or inferences regarding insurers that the potential juror has taken from the media can provide insight into whether the potential juror might be favorable or undesirable from the insurer’s standpoint.

Presentation at Trial – Concise and Comprehensible

After a jury has been selected, helping jurors understand and follow the language and logic of the coverage argument is vital. The following tips may help simplify the coverage case and overcome obstacles when faced with presenting coverage issues to a jury.

1. Walk Jurors Through the Basics

Although often complex, insurance policies are simply contracts. They define a relationship between parties and outline who will do what, when and under what circumstances. Presenting the insurance policy as a simple contract, by identifying the promise between the parties and what each may receive in exchange for their promise, may help jurors be less apprehensive when approaching coverage issues.

A good place to start is with the basics of the policy and how it is structured. Discussing the declarations, insuring agreement, exclusions, definitions, conditions and endorsements allows jurors to get comfortable with the policy. After the policy and its purpose are explained, the specific provisions at issue can be addressed. An effective way to do this is by using demonstrative evidence, such as blowups of certain pages or Power Point presentations illustrating specific language and what it means. Presenting the policy through large exhibits helps break down the technicality for jurors and show that it is a logical and consistent contract.

Further, preparing an exhibit naming and listing the experience of all of the individuals who are involved in creating the policy, the claim investigation, adjustment and the coverage decision shows that time and thought of real individuals went into creating a well-organized document and making a well-thought-out coverage decision.

2. Humanize the Issues

Jurors often bring their own experiences to the courtroom and, sometimes, a bad impression of insurance companies. Further, oftentimes coverage disputes are coupled with bad faith claims, exacerbating the notion that insurance companies are malicious. To overcome these perceived notions and prejudices, it is key to humanize the insurer’s operations and show the jurors that real people have drafted the policies and handled the claims. Showing that the insurer is not just a large, faceless corporation, but individuals making decisions and doing their jobs, will help negate the insured’s presented image of an uncaring, profit-seeking business entity. While testimony from a vice president may be impressive, the agent who issued the policy or the adjuster who handled the claim may help put a more relatable face to the company.

Additionally, many insurers have adopted vision statements outlining a code of ethics or a commitment to the community. Using this at trial, and showing how the company is committed to its values or involved in the community, helps dispel negative ideas of an uncaring corporation.

Lastly, insurers should be careful about attacking the insured’s credibility or positions. While it may be necessary, the way this is presented to the jury can have a big impact and can erroneously further the negative ideas about the insurance company.

3. Show All Negotiations

Jurors will generally understand the concept of “you get what you pay for.” They know that if they contracted with their cable company and pay for only the basic channels, they do not get premium channels, such as HBO. It follows that jurors should understand that if underwriting documents or other evidence show what was discussed and understood between the parties, and this is reflected in the contract, this should be what governs. If evidence of negotiations is available, this should be presented to the jury. This concept may be particularly helpful in litigating commercial policies, where there is usually more negotiation, and in showing the application of policy exclusions.

4. Keep It Simple

As a general rule, the simpler the better. It is important to keep the insurance policy language from sounding too technical. Avoid overuse of legal terms and phrases, as this will only confuse jurors and may cause them to fall back on the generally accepted legal principle that “any ambiguity must be construed against the insurer.” A straightforward presentation, relying on only one or two strong coverage arguments, should be used. Presenting every argument possible is not always the best strategy, as this could bog down the jury and cause them to lose focus. When one or two key arguments are made, the case is tight and allows jurors to concentrate on the big picture, rather than trying to follow several moving parts.

Another tactic that may help bring the issues to a comfortable level is to compare the policy to other contracts jurors may have entered into. Outlining the limits and duties imposed by contracts that jurors may be more familiar with, such as a purchase agreement for a car, or a lease agreement for an apartment, may also help jurors realize that there are also limitations and duties imposed by insurance contracts, just like the contracts with which they are more familiar.

Additionally, working backward from the result being sought provides a road map for a streamlined argument and helps create a unifying theme throughout the litigation. Starting from the verdict form or jury instructions helps to keep concentration on the elements that need to be established or explained.

5. Apply Basic Jury Concepts

Basic concepts of persuasion, which apply to all jury litigation, can also be used effectively in a coverage case. Fairness must be stressed and run as a theme throughout the presentation of the coverage case. Jurors want to be fair and will try their best to do so. Additionally, any obvious weaknesses in the case should be addressed. Holes in the case, if not admitted to or explained, will create doubt.

Presenting a coverage case to a jury is sometimes unavoidable, but need not be too difficult or incomprehensible for jurors. Carefully questioning and selecting potential jurors, along with presenting a simple yet logical argument, while humanizing the insurance company, can help achieve a successful presentation of the case in the courtroom and, with that, a successful result.