This article examines claims litigation from the perspective of a third-party administrator, an insurance carrier’s in-house attorney who manages litigation, and an outside defense and coverage counsel. Often, these professionals come together in the management of the lawsuit through settlement avenues, or trial. Understanding the “behind the scenes” of the claims litigation process can help everyone work more efficiently. We will explore the individual perspectives of each professional, which will help provide insight so that everyone can work together as a successful and united claims litigation team.
THE PANEL
Sarelle Holliday, P&C commercial claims supervisor, Athens Administrators
Brendan Ross, attorney, Lindsay, Pickett & Postel, LLC
Amber Brock, senior litigation counsel, Shelter Insurance Companies
Moderator: Julia Grus, senior litigation counsel, Shelter Insurance Companies
Julia Grus: What would you like other claims litigation professionals to know or understand about moving a lawsuit, such as timelines, budget amounts, expense limits or other expectations for managing a lawsuit?
Sarelle Holliday: Communication, communication, communication. Every claims organization—whether a TPA, carrier, SIR, or other—has reporting responsibilities. When working with defense or coverage counsel, we value timely updates, whether through required reports, quick email updates, or phone calls. It is essential to inform the handling examiner of new information promptly so other interested parties can stay informed. Strong and effective communication prevents surprises that could lead to late reserve development or cases going sideways.
We require an initial case analysis within 30 days of filing an answer and a status update every 60 days thereafter—sooner if new information changes the case or management plan. These updates are critical for the claims file handler, who must meet additional internal reporting deadlines. When file handlers must repeatedly request overdue reports, it can create friction within the litigation team and the claims organization. A simple notification from defense counsel that a report is on their radar but delayed, along with an explanation, is highly appreciated. This allows the file and client expectations to be updated, reinforces that counsel is engaged, and helps maintain the trust essential for achieving the best results.
Brendan Ross: In my view, effectively managing a lawsuit is difficult when there are delays in communication between outside counsel and the claims professional. Prompt, two-way communication is critical to ensure that both parties are aligned on strategy, developments, and next steps. From my perspective, when responses from the claims professional are delayed, it can stall important decisions, slow the progress of the case, and potentially increase costs. Likewise, my responsibility as outside counsel is to provide regular updates and quickly address inquiries to keep the process moving along efficiently.
Amber Brock: We all manage files differently. For me, no matter what kind of case we are dealing with, I need to hear from my outside defense counsel at least every ninety days, and obviously sooner depending on the situation. Different companies may have different guidelines, and they may also differ based on the type of suit. My advice would be to ask the litigation professional what they prefer if there is not a specific company guideline and provide an update at that juncture. If there is nothing to report, then report accurately, i.e., "Plaintiff and her counsel are unmotivated, no filings since last update. No deadlines set by the court."
The worst kind of file is one where I have not heard from outside counsel in several months, especially if I have asked for an update. The easiest way to upset an adjuster or litigation counsel is to make them repeatedly ask outside counsel for an update with no response. Keeping a file updated timely is one of the easiest parts of litigation management, but when it is not done it can be detrimental and cause discord.
Julia Grus: In your role as a claims litigation professional, what would you like other claims professionals that you work with to know about handling expenses from your perspective and how they can assist you?
Sarelle Holliday: In the world of commercial claims, expenses can add up quickly, and whether you are dealing with an eroding policy or not, these costs impact case management. It is important to identify opportunities to keep expenses down during early discovery. For instance, in many cases, we can download and preserve EDR data without immediately paying for analysis. This way, if the case is resolved early, the additional cost is avoided, saving the client unnecessary expense.
We require detailed estimates for each phase of the litigation file. The initial budget is reviewed by the claims file handler, who either approves it or follows up with questions. As the file progresses, the budget should be updated to reflect any changes, ensuring it remains accurate and aligned with the case’s needs.
Brendan Ross: When addressing coverage issues, knowing the exposure on the underlying case is incredibly helpful. This information allows me to tailor my approach and avoid disproportionate costs, such as spending $10,000 on a coverage opinion for a case with only $20,000 in damages. If damages information is available, sharing it upfront ensures a more efficient and cost-effective analysis, aligning the depth of my work with the stakes involved.
Amber Brock: Budgets are required from our outside counsel, and we review and approve them considering specifics of each individual case. I recall drafting budgets in my role as outside counseI and sitting down to outline each budget category with as much detail as possible. I learned that budgeting helped me with my litigation strategy. Having an appropriate budget directly related to the work to be performed can help both sides stay accountable and manage the litigation most effectively.
In my role as senior litigation counsel, I often have outside counsel submitting budgets on all 10 files at once, and each budget is identical—this is not OK. No two files are the same. A two-vehicle MVA with one plaintiff and one defendant is not going to ever have the same budget as a complicated construction case with multiple subcontractors and several experts involved. Spend time preparing the budget so the carrier does not have to ask for more explanation because the budget seems unusually high.
Julia Grus: Does your company use KPIs to measure your internal work and the work of your outside counsel or vendors? If so, what is measured and how often are results communicated internally, to outside counsel or vendors?
Sarelle Holliday: KPIs are widely used by claims organizations, and Athens is no exception. Examiners and counsel are evaluated using a variety of reports and analytic tools. In my experience, these tools are primarily used proactively to examine and enhance processes. While KPIs can also identify areas for improvement, they should not be viewed as punitive in nature. Examples of KPIs we utilize include diary management, reserve conversion, adherence to notepad requirements, closing ratios, compliance with time-sensitive demands, and completion of required fields for Medicare compliance.
Brendan Ross: Whether I am working as defense or coverage counsel, timeliness of reporting is one of the most important KPIs I track, as consistent updates are critical for keeping my clients informed and prepared. Adherence to budgets is another key metric, ensuring that costs remain manageable and aligned with expectations. Tracking the case lifecycle and working toward early resolutions can be valuable, but I think the focus should always be on collaboration rather than using these metrics to apply pressure to claims professionals or outside counsel. While timeliness and efficiency matter, the quality of the result is more important than the speed of achieving it. If we apply KPIs thoughtfully, I think they can provide helpful insights without undermining our shared goal of delivering the best possible outcome for the case.
Julia Grus: Oftentimes, coverage is a question that needs to be reviewed by outside counsel. How do you manage the relationship with coverage counsel and what do you want to share about this process? I find clearly communicating timing expectations with my coverage counsel helps me manage my lawsuit and ensures the defense side has a coverage determination in a timely manner.
Sarelle Holliday: Determining coverage often requires some level of discovery. In these cases, the claims file is typically split into two separate files—one for coverage and another for liability/damages—each managed by different examiners to avoid conflicts. In certain venues, the liability case must be finalized before addressing the coverage, which adds time and expense to both cases. This makes frequent communication and ongoing reassessment essential throughout the process.
Brendan Ross: As we all know, coverage issues can present significant obstacles due to their complexity and the need, sometimes, for quick resolution. I find it important to have a clear understanding of the client’s specific coverage concerns early in the process. This enables me to focus my analysis and avoid wasting time or resources on irrelevant issues. Providing my client with targeted, actionable advice is key to resolving these issues efficiently.
Amber Brock: Coverage questions are (hopefully) identified when I initially receive and review a new lawsuit. Often, the coverage issues may be complicated and become more complex as you begin diving into the small details or receiving additional information through discovery.
When I receive a lawsuit and I believe there is a coverage issue, I prefer to first discuss with at least two other team members from my company. We have certain guidelines we must follow if we are going to outright deny an insured a defense or deny coverage for a particular claim. I often hire outside coverage counsel at the outset, to perform a coverage review only. Because we may be quickly approaching an answer deadline, it is important I request a coverage review timely. Often, it is recommended that we defend the suit under a Reservation of Rights. When a Reservation of Rights is issued to an insured and we decide to defend the suit under the reservation, the file is split, and I will ask another litigation counsel to manage the defense portion of that litigation while I maintain the coverage side.
It is important that two separate files are maintained throughout the litigation: one for coverage and one for the defense and it is then crucial to remember what information is appropriate to be shared and what should not be shared. It is imperative to convey to my outside counsel exactly what their role is in a "split-file" and what their responsibilities are as soon as they are retained. Who are they hired to defend? For my coverage files, I control the reserves and the authority so again it is important the defense side knows that any authority request needs to be cleared through the coverage side. Other companies may handle coverage situations differently, so we as litigation professionals should ensure clarity when working with our outside counsel to effectively maintain and manage each suit.
Julia Grus: What frustrations have you encountered when you need authority to settle a lawsuit and how can outside counsel help with this process?
Sarelle Holliday: The first step of obtaining authority is having appropriate reserves set on the file. We incorporate counsel's opinions alongside our own assessments to update reserves and make recommendations to the carrier. Internal roundtable discussions on cases help us stay calibrated while considering each file's unique merits. Additionally, we analyze jury verdicts on similar cases and evaluate the strengths of expert reports and potential testimony to inform our reserve-setting process.
Having sufficient proof of damages and documentation from the outside counsel is essential when presenting a case to the carrier for authority. Presenting a detailed and comprehensive case upfront allows the carrier to make an informed decision, avoiding unnecessary back-and-forth questions. This approach strengthens the relationship and helps prevent delays.
Amber Brock: Appropriately reserving the lawsuits help us evaluate and prepare for authority requests when needed. A general rule I keep is that I need to make sure my file is appropriately reserved every time I am looking at that file. In most cases, I should be getting updates from outside counsel at least every ninety days, so I should at least be checking my reserves at this time. I have certain guidelines I must follow when increasing a reserve to a certain amount. I never want to raise a reserve at the last minute, and I never want any of my files to be under reserved. We all get busy, and things pile up, but reviewing the reserve every time I review the file, ensures my company’s internal guidelines are followed and I have time to communicate with outside counsel when there are adjustments to case value.
I only have so much authority before I need to escalate the request up to my supervisor, or sometimes higher. What I have found stressful is when I have a case evaluation in my file and reserves are set per the evaluation. Then less than two weeks before mediation, I am faced with a much larger authority request above my level. I then must communicate to my supervisor why that additional authority is warranted (if it is). I sometimes find myself going back to the beginning of the reports and trying to piece together a narrative to support the request. I have found it helpful that if the case evaluation changes drastically and time is of the essence, that I have a very succinct timeline that would support the change in evaluation. Having the documentation and timely updates from Outside Counsel make this process painless; unfortunately, that does not always happen.
Julia Grus: Describe how your company engages with outside counsel, beyond the day-to-day communication related to lawsuit management. How has this been helpful or what would you like to see changed in this area of collaboration?
Sarelle Holliday: We collaborate with outside counsel throughout the year on annual training sessions, CE courses, best practice presentations, and various social engagements. These interactions foster an open-door relationship, allowing us to seek their expertise early in a case, even before it is formally assigned to counsel.
Brendan Ross: Beyond the day-to-day communications related to lawsuit management, I really value any opportunity to connect with my clients outside the office. For example, participating in LMI was a fantastic way to gain insight into how my clients view claims and litigation. Engaging in discussions and case studies helped me better understand their priorities and challenges. I think these kinds of training experiences are great, but equally important are purely social opportunities. Because all our communication is via email or over Teams/Zoom, having face-to-face in-person interaction brings us closer and makes our work together more effective.
Amber Brock: I am pleased with the way my company handles interaction with outside counsel. Luckily one of the states in which I manage litigation is where I practiced previously for over ten years. Obviously, I am familiar with many of our outside counsel, and I will attend in person mediations and trials when I can. Most importantly, our company hosts an "Outside Defense Counsel Retreat" every two years which has been a great success. The location varies, as we operate in several states. We offer CLE and it is a time where our inside litigation team can share some tips, do’s, and don'ts with outside counsel, introduce new people and just have that face time that we all miss so much. We realize that it takes a sacrifice for our outside counsel to travel and spend approximately two days away from their office, but we have enjoyed planning these retreats and have historically had a great turn out.