If It Ain't Broke, It Ain't Being Used
November 2003
How can litigation management be working when
statistics show a steady rise in the number of lawsuits, growing bill auditing,
the trend to pay rather than fight frivolous lawsuits, and the increase in nuisance
claims? Clients and law firms need to communicate the betterment of each. Organizations
like the Federation of Defense & Corporate Counsel can help.
by Michael R. Boutot
International
Litigation Management Association (ILMA)
When is the last time you can remember buying a toddler a birthday or Christmas
present that was not broken after 2 or 3 months? Face it, if it lasted that long, it simply meant the child didn't
like it and thus it was not being "used."
For those who do not know, my wife and I happen to have parented 11 children.
(That is not a typo: eleven is correct.)
If there is one thing we can testify to it is this: If it can be broken, it will get broken! Or maybe I can say it another
way: If it ain't broke, it ain't being used.
Conceptually, the same is true in litigation management. Rather than saying,
"If it ain't broke, don't fix it," think about those toys and say, "If it ain't
broke, it ain't being used." In an era where litigation is on the rise, companies
are turning to experts to assist in the control, monitoring, and management
of litigation exposures and costs. Insurance companies and corporations alike
are recognizing that "old school" philosophy in litigation management is not
getting the job done. There is no "one size fits all" solution to the problem.
Is Litigation Management Working?
Let me share briefly why I believe much of what we today call "litigation
management" does not exist.
- Lawsuits have been consistently on the rise over the past 15 years.
- More and more good defense attorneys are leaving the practice of being
defense attorneys and becoming plaintiffs' attorneys.
- We have yet to fully embrace uniform guidelines. If a law firm has 100
clients, I venture to say they have 100 different set of guidelines.
- Technology solutions for law firms vary greatly from technology solutions
for claims personnel.
- Third-party retrospective legal bill auditing has become big business.
- Insurers and self-insureds continue to consider "nuisance settlements"
at alarming rates; that is to say, they are paying claims as an "economic
decision" rather than defending.
- Despite these "nuisance settlements" to avoid litigation, as indicated
above, not only are suits on the rise, but frivolous suits are growing likewise
at alarming rates.
As you can imagine, the list could go on. While I am not suggesting these
concerns are everywhere, might I suggest that they are in too many places? The
question is what are we doing or planning to do to "stop the bleeding"? Let's
face it, as mentioned in the introduction, if we are talking toys, regardless
of how expensive the toy is or how much we teach a child to be careful, sooner
or later it is going to break. The question then becomes: "What do we do now?"
We have become so concerned and cautious that we might lose that "big one"
that we have basically created a litigation management bubble. In other words,
because we are afraid something might go wrong, we have "thrown out the baby
with the bathwater" so to speak. Whether it is concern over running off our
defense attorneys due to strict guidelines, or "sticking to our guns" when it
comes to the top value of a claim, or embracing new technological solutions,
it is time we consider what our options are and move forward.
Is There a Solution?
So, what is the solution? I am not sure there is a "one size fits all" fix.
However, I do believe there are several opportunities that are available to
us. The one that I want to focus on for this article is establishing strategic
partnerships between claims personnel, risk management personnel, and the defense
bar. In other words, bridging the gap.
Those who have been in the industry 20 years or more will remember "the good
old days," that is, when relationships between adjusters and defense attorneys
was probably at its best. While some might say the key is to bring back the
trust factor, I wonder if the key is to bring back the understanding factor.
What I mean is that there needs to be a greater understanding of what each other's
needs are. While I obviously do not have the time here to address every need,
I think it is fair to say that the needs of each group will, in fact, vary.
And the best way to develop an understanding is to spend time together.
The Federation of Defense & Corporate Counsel
That is why I am a big fan of various organizations that focus on developing
relationships between clients and law firms. One such organization is the Federation
of Defense & Corporate Counsel (FDCC), previously known as the Federation of
Insurance Corporate Counsel, or the FICC). In my opinion, this is the most outstanding
defense organization of its type in the world. Founded in 1936, the FDCC has
become a premier tool and resource for training, development, and knowledge
in the defense of insurance and corporate litigation. It is an organization
of tremendous value in areas related to litigation and the defense of claims.
A brief cursory review of their Web
site will give you a sense of the value the FDCC can provide.
The FDCC is well represented by the insurance industry and large corporations.
Members include corporate counsel and claims executives from Winterthur Swiss
Insurance, Zurich-American, Marsh & McLennan, Fireman's Fund, Allstate, State
Farm, Kemper, CIGNA, Lloyd's, ITT Hartford, AIG, Royal, St. Paul, Liberty Mutual,
and many more. Corporations include Cooper Industries, Syntex Corporation, Merrell
Dow, Budget Rent A Car, Chrysler Corporation, Exxon, Nike Inc., Johnson & Johnson,
Marquette University Law School, and many more.
The FDCC is firmly committed to being part of the solution as opposed to
being part of the problem. While I have only been a member for about 2 years,
I have seen how eagerly the organization and its members seek to remedy many
of the obstacles we face today. While so many organizations limit their membership
to certain groups, the FDCC welcomes membership from corporate America, insurance
personnel, general counsel, captive attorneys, and outside panel counsel. In
fact, those who complement the business of insurance and self-insurance claims
and litigation management can also join as associate members.
The following are a few examples of the subcommittees and/or sections that
make up the FDCC.
- Corporate Members Forum
- Insurance Industry
- Premises liability
In addition to these functions within the organization, in 1994 the FDCC
began offering an annual "Litigation Management College." This is presented
each spring at Northwestern University's Kellogg School of Management. Due to
its tremendous success, the FDCC will offer its first ever graduate program
in May 2004. Designed to introduce successful practices in litigation management
to claims and risk management personnel, the college and graduate programs are
filled with opportunities to enhance your litigation management skills. To learn
more about the FDCC, including how to be a member, visit their Web
site.
Conclusion
So the next time someone says "If it's not broke, don't fix it," think of
toddlers and toys. Then think of what has gone wrong in the area of litigation
management over the years and say, "If it ain't broke, it ain't being used."
Then become a solution to the problem.
The views, content, and opinions expressed herein are solely
those of Michael Boutot and are not necessarily those, nor intended to be those,
of Crawford & Company and/or the membership and/or board of the International
Litigation Management Association (ILMA).
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