Managing Catastrophic Claim Litigation

1. Managing Catastrophic Claim Litigation Richard Vincelette, President Stephen Dzury, Senior Vice President, Claims Berkley Public Entity Managers A Berkley Company

2. Outline • Catastrophic / Large Claims • Litigation Management • Incident • Investigation • Pre Suit Work • Suit Response • Litigation • Mediation • Trial • Resolution

3. Set the tone

4. Catastrophic / Large Claims • Man made in origin (not Natural Cats in the Property Sense) • Large Dollars • Reputational Risk • High Exposure • Challenging Legal Issues • Emerging Trends

5. Litigation Management Litigation management does NOT start when suit is filed, or even when an incident takes place! • It starts TODAY • Panel Counsel • Guidelines • Experts • Structure Brokers • Litigation Support Vendors • Jury consultants • What is your litigation philosophy? • Who is your team?

6. Today? • Who is your “Heavy Hitter?” • Think outside the box • What makes counsel a “Heavy Hitter?” • Political Connections? • Support Team / Staff? • Reputation? • Ability and Willingness to Try a Case!

7. “Better call Saul”

8. The Value of Reputation

9. The Incident • As soon as you are aware of an incident, action needs to be taken • If there is any question, call the experts • Counsel • Engineers • Accident Reconstructionist • State Police • Crisis Management Experts • Any and all physical / time sensitive evidence should be preserved as quickly as possible • NOTIFY YOUR BROKER AND CARRIER

10. Immediate Response • Is a public response needed? Would it be beneficial? • Is there a crisis management plan in place? • If so, does it involve retaining a crisis management response expert? • What is said and done in the immediate aftermath will be something you will live with for the length of the case, if not longer

11. Montreal, Maine and Atlantic Railway Example • On July 6, 2013, an unattended 74 car freight train carrying crude oil derailed in the center of Lac-Mégantic, Quebec • Destroyed 30 buildings, killed 42 people, with 5 still missing and presumed dead • Montreal, Maine and Atlantic Railway owns the rail line and cars

12. Example (con’t) After: Before:

13. Example (con’t) What not to do: • CEO did not go to the site for 4 days • Before an investigation started, he blamed a local volunteer fire company • He then blamed the engineer (his employee) and suspended him • Did not issue press releases in French (local language) • Did not retain an interpreter for press conferences, appears to have used an on-line translation service • Half jokingly requested a bullet proof vest when he did appear at the site • Complained that this accident would likely bankrupt his company • Factually misrepresented his company’s safety record • Promised to assist with cleanup and then refused to contribute anything • Has instructed employees to not cooperate with any police investigation without first consulting in-house lawyers

14. Example (con’t) After his first press conference upon arrival, these were the (nicest) responses:

15. Investigation • Who is going to conduct your investigation? • Should counsel be retained to create privilege? • Should other experts be brought in? • What internal reports will be generated? • How will they be distributed? • What is the purpose of your investigation? • To determine what happened? • To address and potentially punish the at-fault party? • To create a document to be used in defending the case?

16. Investigation (con’t) • How long will it last, and who will be involved? • A timely and thorough investigation needs to be considered an investment in the outcome of the case, not an expense • A failure to investigate and properly preserve all findings as soon as an incident has taken place can create significant, expensive problems that may not be fixed

17. Pre-Suit Work • What are the results of your investigation? • Has counsel been assigned? • What liability picture has emerged? • Is liability clear and adverse? • If so, should settlement discussions be considered? • Should an amount of money be offered in good faith? • Should medical management be introduced on a BI case? • What other items can be done to reduce ultimate exposure? • If liability is not clear and adverse, play some games!

18. Pre-Suit Work (con’t) • Not Scrabble or Words with Friends • Utilize game theory • If suit is filed, where will it possibly be filed? • How will you respond? • Answer the complaint? • File a motion to remove to a different court? • File a motion to dismiss? • Tender retentions / deductibles / limits? • What other variables can be “gamed” so that you have a plan in place when suit is filed?

19. Suit Response • Now that you have game theoried most potential responses, put strategy into action • Who is plaintiff’s counsel? • What’s their background? • If you need an extension, ask for it • The responsive pleading does not have to be automatically be an answer • Removal • Dismissal

20. Suit Response (con’t) • The goal for discovery should be twofold: • Hold plaintiff to their proof by being aggressive in discovery • Constantly work to reduce plaintiffs case through motion practice

21. Answering the Complaint • Analyze the Complaint • Where are they looking to drive the case? • What are the Causes of Action? • Affirmative defenses can be tricky • As a public entity, in a large case, the answer filed may receive significant scrutiny • How will it be received by the public, or in the media? • If filing controversial responses, do you need a media management strategy? • Is your Heavy Hitter media trained? If not, who?

22. Litigation • Responsive pleading to the complaint filed: • Affirmative defenses: • Discovery – where the Defense can become the Offense • Interrogatories • Who will answer them for the defendant? • Will they make a good deposition witness? • Be thorough and deliberate when crafting them and propounding them on the plaintiff

23. Litigation - Depositions • Will the depositions be videotaped? • Who will be the defendant deponents? • Think and put together a plan for who will likely be deposed on your side • No such thing as too much preparation • Preparation is more than having counsel spend 30-45 minutes with them prior to the depositions • Mock depositions

24. Litigation - Depositions • What are their backgrounds? • Know what skeletons exist before the deposition • Plan to deal with them as early as possible • Deposing plaintiffs • Conduct ethical, legal background checks on those that you may be deposing • Employ what you know about plaintiff • Conversational approach, as opposed to adversarial, can often provide additional information

25. Litigation – Motion Practice • As discovery progresses, keep in mind plaintiff’s causes of action • What can be done to knock various Causes of Action out? • Ideally, through discovery, the Causes of Action can continue to be whittled down, and disposed of either through: • Motion for Summary Judgment • Motions in Limine

26. Litigation – Experts • Who will your experts be? • How are you selecting them? • What is their background? • Are there skeletons to be worried about? • Are there billing issues you will need todeal with? • What accreditations do your experts have? • Industry • Educational • How do they relate to people? Will they relate to a jury?

27. Litigation – Jury Consultants • Jury Consultants are best brought in early in a case • Assist with Mock Trials and Focus Groups • Provide helpful feedback on trial exhibits, graphics, animations • Can provide an overall textural feel to a case, which is beneficial for both the mediation, and trial

28. Focus Group • A moderator presents a narrativeto a group of people, and will thenask questions as to the group’s thoughts • Marketed as helping value a case • Can help with trends, evaluate arguments • Least expensive method of reviewing a case • Highly dependent on the moderator • Does not always provide most reliable data • Can be subjected to too many variables

29. Mock Trials • Mini trial, usually conducted in front of more than one group of people • More expensive than focus groups, but can provide better quality data • May conduct 1-2 per day, so that a number of theories can be tried out • Consider having defense counsel act as plaintiff’s counsel • “Think like a bug” • Use a quality opponent

30. Mediation • This is where the investment will pay off • Almost some form of ADR / Mediation is required, and this is a good thing • What is the goal of your mediation? • Who is your mediator, and how were they picked? • What do you know about the mediator and their style? • How do you put this to use and generate value?

31. Mediation (con’t) • What’s the plan? • Who will participate in the opening session? • What will the structure of the day be? • Will each side do a short presentation? • Authority • Make sure your structure broker is there, and engaged • Good faith • Written offers

32. Mediation (con’t) • Who will participate in the opening session? • Keep in mind that you likely have done this a bunch of times before, where the plaintiff has not • It will be emotional for the plaintiff • Make sure you are prepared for the day • It is emotional for all parties • There is significant down time, and small bursts of intense activity • Get as much sleep as you can the night before • Plan your meals for the day

33. Trial • Appellate Counsel • Retain them • Involve them in the drafting of all motions • They should attend each day of trial, and work with defense counsel • They should review the daily transcripts independently, highlight and act on any appellate matters • Build a case, if necessary, for an appeal • Motions in Limine to be argued

34. Trial (con’t) • Have a strategy to address a pre-trial settlement conference • Do you want to request one? • Is the judge forcing one? • Has plaintiff’s counsel requested one? • Do you have authority? • Are you using the jury consultant at trial?

35. Trial (con’t) • Trial attendance • Who will be sitting at the defense table? • Who else will be attending (adjuster, other interested parties) • Shadow jury • Address with judge and bailiff early on • Voir Dire • Do you get the list of potential jurors ahead of time? • Are there questionnaires to review? • What do you know about the juror panel that can be put to use? • Political affiliation is not the best predictor of a juror’s vote • Are you using the jury consultant to assist with voir dire

36. Trial (con’t) • As the trial progresses, let trial counsel work • No status reports • Have him or her focus on the days activities • Division of labor between trial counsel and appellate counsel • Appellate counsel should be handling all motions and protecting the record • Appellate counsel needs to work with trial counsel

37. Trial (con’t) • Plaintiff has finished their case – has plaintiff met their burden? • Motion to dismiss? • Protect the record • Settlement discussions can continue through trial • As the adjuster, or representative for the defendant, engage plaintiffs counsel in settlement discussions where appropriate • Keep defense counsel out of it – let them continue to prepare and try the case

38. Trial (con’t) • Be careful with the trash talk • Act as though there is a camera on you • Jury sees and hears things • Plaintiff sees and hears things • Can have a significant outcome on how the jury ultimately responds

39. Resolution • You’ve won – Great! • Will plaintiff appeal? • Do you have an Offer of Judgment to collect? • Use appellate counsel to handle any potential appeals • Thank your team – celebrate your successes • Conduct a post mortem with the team – what worked, what didn’t work, what can be learned

40. Resolution • You’ve lost – My Condolences • Post-trial motions • JNOV • Remititur • Do you have an offer of judgment to deal with? • Appeals • Appellate counsel • Post-trial settlement discussions • Thank your team – the sun will rise tomorrow • Conduct a post mortem with the team – what worked, what didn’t work, what can be learned

41. Final Thoughts • The best defense is a strong offense • Information has significant power • The media has a powerful effect on cases in litigation • Litigation Management starts today, and takes place every day, not just during a claim • Win as a team, or die as individuals

42. Thank You Richard Vincelette, President Rvincelette@wrberkley.com +1 (215) 553-7366 Stephen Dzury Sdzury@wrberkley.com +1 (215) 553-7382