Schedule/Sessions

Breakfast

Keynote Speaker

Session 1 - Session 1 Presentation A: Flat Fee Agreements: Do They Pose a Risk of "bad faith" Exposure

Reprising and updating a round-table presentation from the CLM 2012 annual meeting, this panel will discuss the growing trend in the industry for buyers of legal services to demand ever greater flexibility from their selected counsel in the manner of payment for those services.

The question posed here is whether an insurer opens itself to a risk of "bad faith" exposure by insisting on flat fee arrangements in situations where they may in fact not be advisable.  In addition, does the Insured have to (a) be informed about, and even (b) consent to - a proposed flat fee arrangement?

A related question is whether the insurer can be held vicariously liable to the insured for the alleged inadequate representation by defense counsel, particularly where the retention agreement contemplated a flat fee arrangement for services. 

Session 1 - Session 1 Presentation B: Below-Limit Settlements: How to Handle Issues that Arise When Another Insurer Settles for Less than Its Policy Limit

The Primary Insurer Scenario: After years of litigation you reach a settlement with the policyholder.  Due to your excellent litigation strategy and strong coverage defenses, the policyholder agrees to a settlement in which you pay less than your policy’s limits even though the loss exceeds the limits.  You are glad this costly coverage litigation is done — but it may not be.  Depending upon the terms of your settlement and the applicable law, other primary insurers or excess insurers may be able to seek contribution from you. 

The Excess Insurer Scenario:  You are the excess insurer that attaches above the primary insurer that has entered into a below-limits settlement with the policyholder.  Your policy does not drop down or provides that it does not have any obligation until the primary insurer has paid its full limits.  The policyholder pays the shortfall or seeks for you to drop down despite your policy language. 

This session will address: (1) the steps a primary insurer can take in negotiating a below-limits settlement to achieve finality; and (2) the arguments an excess insurer that attaches above an insurer that settles for less-than-limits can assert and the likelihood of success with such arguments depending upon the applicable law and the policy language.

Session 1 - Session 1 Presentation C: Selection and Preparation of 30 (b) (6) Witness and Company Fact Witness - One Size Does Not Fit All

The purpose of this presentation is to have a discussion on the exercise of selecting and preparing your 30b6 witnesses from the perspective of the company and of counsel defending the case. It will vary from State to State and from Court to Court. What you can get away within the venue your suit is located. There are a multitude of issues that must be confronted including: the subject matter and breadth of the areas of inquiry; the number of witnesses necessary; time and scheduling issues; consistency on a subject matter; the personalities involved; one or more people who can speak for you on complex policy issues; system issues such as pricing programs or loss of income calculations.

The other side of corporate depositions is your fact witness. They are the individuals who worked the claim. They may be CAT claim representatives, line representatives, risk managers, or others. This discussion will also examine how to prepare and produce these witnesses. What to do with the problem witness. How to handle independent adjuster fact witnesses who are not your employees.

Break

Session 2 - Session 2 Presentation A: The Insurer's "Right" to Intervene and Other Problems When the Insured Assigns its Bad Faith Claims

The panel will explore the claims management and legal problems faced by an insurer who has  refused to pay an unreasonable demand on behalf of its insured in a catastrophic personal injury case with the unhappy result of an excess verdict, and an insured who seeks to enter into a settlement agreement with the plaintiff whereby: (a) the insurer is required to pay its policy limits; (b) the insured assigns to the plaintiff its bad faith claims against the insurer for the express purpose of allowing the plaintiff to pursue those claims in further satisfaction of the judgment against the insured; (c) the insured agrees not to take any action which would impair the validity of those claims; and refuses to challenge the judgment despite the existence of meritorious post-trial motions; and (d) the plaintiff agrees not to enforce the judgment against the insured’s personal assets. The panel will discuss the claims handling and legal challenges faced by an insurer who finds itself in this situation.  While the insurer may seek to file a Rule 24(a) motion to intervene claiming that its interests are directly at stake, by doing so it arguably places its interests over those of its insured.  Also, given the paucity of authority dealing with whether an insurer should be allowed to intervene in such circumstances, the success of a motion to intervene is far from assured.  The panel will offer its suggestions on how to deal with the bad faith traps inherent in this situation, as well as reviewing the arguments and case authority in support of and against intervention.

Session 2 - Session 2 Presentation B Tackling Tenders - Who's On First? Priorities of Coverage and Tools for Responding to Tenders of Defense and Indemnity

Ensuring that available risk transfer mechanisms are appropriately applied so as to properly allocate damages to the ultimately liable party is as critical to the claims and defense process as it is to commerce in general.  Contracts are signed each day with the obligation for payment of damages and/or defense in the event of claim or suit being transferred from one party to another. Commerce is dependent on these forms of risk transfer, with each contract incorporating that risk into its pricing. 

The effect of contractual indemnity agreements on the insurance industry is similarly built into the industry’s risk and pricing structure, making it extremely important that risk transfer tools, whether via indemnity agreements or other insurance, be properly applied.

Absent proper allocation of damages between legally liable parties, the insurance industry and commerce in general will find itself incorrectly paying claims and in the process incorrectly pricing their products and potentially adversely impacting not just their own company’s balance sheets but also those of their insureds.  As more and more insured take on significant SIR’s and otherwise become more educated about the claims process, they actively seek to minimize early or improper reduction of available liability limits through the payment of claims for which another party or insurance company should be paying. 

It is critical to proper claims handling and defense of insureds that all forms of available risk transfer methods are considered and evaluated when considering the insured’s exposure for the liability of another, the insured’s exposure for liability that should be borne by another, and approaches to take to ensure that the money paid on behalf of an insured reflects its reasonable exposure and that money that should have been paid on behalf of an insured can possibly be collected from other parties or insurers.  This session will examine the ways in which an insured’s indemnitee may be entitled to defense and/or indemnity under a CGL policy and resulting competing insurance implications,  while providing attendees with practical tools for effectively and appropriately responding to tenders. 

Session 2 - Session 2 Presentation C: Allocation Between Covered and Non-Covered Causes of Action

Break

Session 3 - Session 3 Presentation A: Allegations of Litigation Bad Faith and The Litigation Privilege

Sometimes bad faith claims are made against insurers based on legal positions the carrier takes in litigation, actions taken by the carrier’s counsel in litigation, and the conduct or testimony of company witnesses.  Closely related topics include what rules apply to the insurer’s continued investigation and adjustment of a claim that is at issue in ongoing litigation.  Are the parties limited to the Civil Rules?  Can doing so—or not doing so—itself be bad faith?  Must the “undisputed” part of a claim be paid once a lawsuit is underway with the insured, or is the entire amount fairly in dispute?  Can the conduct of professionals retained by insurers to investigate first and third party claims, or the conduct of experts retained by insurers create bad faith exposure to the hiring carrier? 

The legal, factual and practical application of the litigation privilege will be examined as developed under statutory and common law in various jurisdictions.  The panelists will discuss the use of privilege as a defense to extra-contractual liability claims arising from litigation conduct.  The panelists also will discuss what factors are relevant to evaluating claim adjusting needs and the carrier’s obligations when the underlying claim is the subject of litigation between the insured and the insurer. The relevance and application of the civil rules and rules of professional conduct will be explored.

Finally, the last section of the program will identify and explore potential pitfalls for insurer counsel that can arise when representing the insurer against the insured.  

Session 3 - Session 3 Presentation B: Sharing Your Secrets/Baring Your Soul: The New Discoverability of Reinsurance Information and Reserves

This session will explore the oft-neglected and overlooked issues raised when a policyholder in coverage litigation issues discovery requests for the insurer’s communications with its reinsurers and subpoenas documents relating to the reinsurer’s reserves.  Are these requests relevant?  Can they be quashed, either by the party insurer or the third-party reinsurer?  What about reinsurance intermediaries?  Does privilege exist?  Can it be waived?  Do these requests even put at risk the inviolate privilege between attorney and client?                 

This Panel will consist of representatives of the defense bar, policyholder counsel, insurers who defend coverage claims and present potential claims to its reinsurer, and reinsurers.  It will discuss the legal issues, present the arguments offered to the courts and consider how they have been resolved, identify problem areas for insurers, reinsurers and counsel and pose possible strategies for preserving privilege and educating claims representatives to avoid common traps. 

Session 3 - Session 3 Presentation C: Bearing Witness: Navigating the Bad Faith Minefiled During Trial

Networking Lunch