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“Keeping Damages Down” High Exposure EPL & E&O Claims

“Keeping Damages Down” High Exposure EPL & E&O Claims. MODERATOR Ben Mathis Managing Partner - Freeman Mathis & Gary, LLP PANELISTS: Joanne Lloyd-Bragg Vice President, Claims Manager - AXIS Insurance Erin McGinn Vice President, Claims - XL Professional David T. Vanalek

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“Keeping Damages Down” High Exposure EPL & E&O Claims

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  1. “Keeping Damages Down”High Exposure EPL & E&O Claims

  2. MODERATOR Ben Mathis Managing Partner - Freeman Mathis & Gary, LLP PANELISTS: Joanne Lloyd-Bragg Vice President, Claims Manager - AXIS Insurance Erin McGinn Vice President, Claims - XL Professional David T. Vanalek Claims Manager - Markel

  3. Agenda • Statistical Trends In EPL & E&O • Juror Attitudes • Mock Testimony • Lessons Learned • Best Practices

  4. The EPL Landscape • EEOC Charges Are At Record High • 99,947 in 2011 • 99,922 in 2010 • 93,277 in 2009 • 95,402 in 2008 • 82,792 in 2007 • 75,768 in 2006 • 75,428 in 2005

  5. National Employment 2011 Discrimination Statistics

  6. EPL Lawsuits • 56% of employment trials -- plaintiff verdict (HR.com) • Average award 2003-2010 was $640,477 • Median award was $317,000 in 2010 • 21% experienced EPL in past five years • Average cost of charge/lawsuit was $51,975 Chubb 2010 Private Company Risk Survey

  7. EPL Insurance Purchase Rate Chubb 2010 Private Company Risk Survey

  8. ML, PL and Crime Insurance Purchase Rate • Only 1 in 4 private companies buy Management Liability, Professional Liability, or Crime Insurance polices • Only 55% of private companies preforming service for fee purchase E&O Chubb 2010 Private Company Risk Survey

  9. Understanding Juries What They Think Tells You Why They Award Damages!

  10. Which of the following statements best describes your feelings? It is more important to follow the “letter of the law” than the “spirit of the law”: It is more important to see that “justice is done” than to follow the “letter of the law”: Source Dan Galipeau , Phd.

  11. It is very important for people to stand up for what they believe in Source Dan Galipeau , Phd.

  12. I am against punitive damages Source Dan Galipeau , Phd.

  13. A million dollar award against a large company would not even be noticed by senior management Source Dan Galipeau , Phd.

  14. An important function of juries in America is to send messages to organizations to improve their behavior

  15. If a company is found to be negligent, that company should pay punitive damages Source Dan Galipeau , Phd.

  16. Mock Case Scenario • Miles E. Cyrus v. Back Page & Associates Law Firm • Accused Partner- Stan Jock • Managing Partner – Iam Clueless

  17. Damages And Lessons From Trial • Early Investigation Is More Than Talking With Insured • It Is Not Just About Plaintiff’s Conduct • “Fair” Is As Important As “Unlawful” • Credibility – Non-supervisors/Former Employees Can Be Critical • Risk of Liability (Motion vs. Trial) • Venue

  18. Key Red Flags For Big Verdicts • The Insured “Doesn’t Get It” • Did Nothing to Prevent or to Respond • This Is “Not The First Time” • The Insured Is Dislikeable • “Eggshell Plaintiff” / Sympathetic Plaintiff • Your Defense Counsel Is Not Likeable • Economic Damages Not Always Predictor

  19. Strategies/Best Practices To Reduce Damages • Plaintiff’s Depo – Make DA spend time on damages • Trial – Make DA talk about damages • Offers of Judgment (Rule 68) • Pay Attention To Caps/Educate Plaintiff • High/Low Agreements • Arbitration as Alternative

  20. Strategies/Best Practices To Reduce Damages • Focus Groups/ Mock Trials? • Do You Have The Right Trial Counsel? • Need Local Counsel? • Trial Consultant? • Claims Professional At Trial?

  21. Mediation • When Should Mediation Take Place? • Who Do You Want For Your Mediator? • Have You Planned For The Mediation? • Does Your Lawyer Recognize It’s Not A Trial, But A Mediation?

  22. Questions?

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