We hear a lot about carrier-counsel collaboration, but why is it important? According to CLM CEO Ronna Ruppelt, matters where outside counsel and the claim professional have ongoing and meaningful collaboration throughout the life of the claim, cycle times are shorter, indemnity is lower, and outcomes are more equitable.

Why is carrier-counsel collaboration important?

Partnership between carrier and counsel is a key element of a modern litigation strategy, yet each side has learned to work around a certain level of friction within these relationships. Both parties bring a unique perspective and expertise to the case – which means they also each bring a slightly different definition of success according to their organization’s business goals.

6 common elements of collaboration in all litigation

Litigation is a process. Regardless of the type of litigation you’re dealing with, there are fundamental variables that exist in every suit. Here are the common elements identified across nearly every claim, regardless of type, jurisdiction, or other factors.

1. Why is the matter in litigation?

Was it the first notice? Was there a negotiation impasse? Is there something else going on here? 

When looking at a new lawsuit, these are the first questions that must be addressed. Once both parties come to an agreement on why the claim is in suit, panel counsel can begin to work within the carrier guidelines to resolve the claim as efficiently and equitably as possible.

2. The open issues plus the desired resolution method should drive the handling strategy

How does the client want to get this resolved? How would you recommend getting this case resolved? Is this a case to try or one that could be successful with a dispositive motion or negotiated settlement? Your goal should be to calibrate your client’s ideal resolution with your recommended course of legal action for claim resolution as early as possible. 

Of course, the handling strategy may change as the case evolves, but early on, both sides should come to the table with a general sense of their ideal outcome and the path they’d like panel counsel to take to achieve it.

3. The litigation activities should support the strategy

Once you and your client are on the same page about the ideal resolution for the claim at hand — that collaboration between counsel and carrier — you’re ready to move into the specific litigation activities to get to that resolution.

For a very basic example, say you have a red light, green light intersection accident, and you have a witness. Your witness may be a teenager on the corner who happened to be standing there. They bring a certain amount of perspective and a certain amount of credibility. Or your witness may be a well-respected member of the community, such as a clergy person, who brings another type of credibility to your case. Wouldn’t that be the first person you depose in that case? If you depose the second individual, everything else may fall into place.

From the beginning, you should be in lockstep on what is this case about, what is the end goal, what is the strategy to get there, and the litigation tools that support a particular strategy.

4. Understand the risks and benefits of every litigation activity before it's undertaken

You need to approach every activity not only with an understanding of the associated cost, but also the potential risks and benefits. 

As counsel, how many times have you recommended hiring an expert, your client agrees to the activity, then kicks back your bill when they see it costs $25,000 – but they never asked how much it would cost before giving you the green light? On top of that, there’s always the possibility that the expert now tells you something you didn’t want to hear. So not only do you need to be prepared to justify your litigation actions to your client, you need to anticipate the risks associated with every decision, and be prepared to adjust your strategy accordingly to deal with it.

While handling strategy may change as the case evolves, early alignment between carrier and counsel regarding your handling strategy – and the inherent risks and benefits involved – is crucial to smooth communication and effective collaboration for the duration of the claim’s lifecycle. 

5. As new information is learned, re-evaluate the desired method of resolution and the strategy

As new information is learned throughout the suit, do something with it: share it, reevaluate it. Does it change the impression on liability or damages? Does it change the offer? Does it change the strategy from a negotiated settlement to trial? 

Whatever happens, you must evaluate a new course of action as new information surfaces. Doing nothing isn’t an affirmative decision. Take that information, evaluate, and adjust the strategy accordingly.

6. Counsel's ethical obligations and carrier's good faith duties

Last but not least, in every litigation process, there is counsel’s obligation to the representation of the insured. You don’t want to put yourself or the carrier in a position of malpractice or bad faith.

But that doesn’t mean counsel is obligated to try to protect the client or insured with every individual action or activity related to the suit. Some judgement and reasonable activities should not happen in every case, and its ultimately up to counsel to determine where that line is drawn.

The takeaway

These six elements of collaboration can seem fundamental, but somehow they are frequently missed in many claims litigation processes. But when collaboration happens early and often, carriers and counsel see reduced ALA expenses and indemnity.

Greater collaboration has become even more critical amid recent staffing shortages and economic concerns. In the adjusting world, there has been a hiring shortage for some time, and it’s only gotten worse through COVID-19 and the great resignation. But the claims don’t stop coming in, so every adjuster and attorney is facing increased workloads. 

Both sides stand to benefit from increased collaboration via shared technology and insights. To see more on this topic from Ronna, and more expert insights addressing the changing claims litigation landscape, visit the video hub from our exclusive Insurance conference.

Learn how Litify’s Practice Management solution for Defense Firms or Claims Litigation Management solution for Carriers can streamline your litigation process today.