9 January 2023 / Tiffani N. Palmer

Top 5 Subrogation Tips: Don't Let Your Claims Become an Afterthought

Attorney Tiffani Williams recently attended the National Association of Subrogation Professionals’ (NASP) Roaring Subrogation Annual Conference in Marco Island, Florida. She was joined by shareholder and subrogation group chair Ted Traut and director of business development Chris Kimes.
So many individuals and organizations were featured at this informative conference. Now, Tiffani is sharing her top five takeaways regarding subrogation recovery.
Subrogation recovery starts before the loss is ever paid. The NASP Conference provided an array of interesting topics, from subrogating autonomous vehicle accidents to an overview of ocean marine losses. However, the central focus of the presentations can be boiled down to the following: 

1. Proper preparation is key.

According to attorney and founder of Saltz Mongeluzzi & Bendeskey Trial Lawyers Robert J. Mongeluzzi, strategic decision-making can be utilized in subrogation cases to determine the long-term goal of successful recovery. This involves:
  • Defining the nature of the subrogation case
  • Gathering information
  • Developing options for recovery
  • Evaluating those options
  • Choosing and taking action

2. The first step in defining the nature of the subrogation case is to recognize early on that a subrogation case exists in the first place.

Define a tentative theory for your subrogation case. The tentative theory of your subrogation case is the basic, underlying idea that not only explains your cause of action and factual background, but also ties the two together. The subrogation adjuster should list out the facts of the matter, including all indisputable information, and consider any relevant laws and common sense factors that might play a role in the perception of the information. The length of this statement depends on the complexity of the case, but it is generally brief. 

3. Preservation of evidence is critical to avoiding spoliation.

Once the subrogation case is recognized and defined, all evidence needs to be preserved. This includes both electronic and tangible evidence. It’s important to establish which pieces of evidence are critical to your subrogation claim. Then, identify the at-fault party for the loss, put all parties on notice in writing of the loss and potential subrogation, and provide all parties with an opportunity to inspect the relevant evidence. It is important to keep in mind that spoliation can occur due to a multitude of reasons including; changing worksite conditions, transient witnesses, transient equipment, injury scene clean-up, total loss salvage handling, and claims repair/replacement handling. 
To avoid spoliation of evidence, quickly arrive at the accident site before it can be altered or cleaned up. Document the scene by taking photographs, videos, measurements, statements, and inviting the opposing side to examine the site and preserve any critical evidence that may be needed to prove or disprove liability. Also, enlist the guidance of your expert and counsel to assist with what evidence needs to be preserved. In addition, send preservation letters to all parties that may be in possession of possible evidence. 
However, in the real world some evidence is inadvertently lost or destroyed. The claim adjuster must start thinking about the implications of the lack of evidence on the subrogation case, including the party that lost, altered, or destroyed the evidence. In many cases, an exemplar of the evidence may be utilized. An exemplar is typically a model or patterned copy of the relevant evidence. The claim adjuster must determine the hurdles in identifying the exemplar, cost and expenses considerations, availability of the original evidence, and age and revisions to the original evidence.
Exemplars can be identified by looking at the subject unit or conducting interviews, examining brand markings, locating the make/model/serial tag, listing the date of manufacturing or revision dates, instruction manuals, reviewing purchasing receipts, and identification by the features. There are also legal and practical considerations to evaluate.
The adjuster should examine whether testing should be done unilaterally or jointly:
  • Can spoliation be raised if a destructive analysis of exemplars are conducted? 
  • Are there instances where exemplar examination or testing can negatively affect your subrogation case?
  • Is it worth taking a risk by using a different make model or revision of exemplar?
  • Are we ok with the manufacturer providing the exemplar?

4. Gathering the right information.

Here are some things to identify:
  • The proper experts to retain for the initial investigation of your loss
  • The role each one of your experts will play during the initial scene investigation
  • Whether additional or non-testifying experts are necessary to retain throughout the pursuit of your subrogation case
  • Whether certain experts are necessary to retain to establish/prove specific elements of your subrogation case
  • Information, documents, discovery, and depositions necessary to supply each expert during the pursuit of your subrogation case
  • Define the role and opinion of each one of your experts:
    • Identify overlapping duplicative opinions of experts
    • Ensure the opinion of one expert does not undermine or negatively impact the opinion of another expert in your case
    • Identify the importance and role your liability and damage experts may play with one another
    • Identify the proper method to adequately prepare the experts for their depositions and trial
Each claims file should contain:
  • Proof of liability
  • Files notes
  • Medical bills and/or damage estimates
  • Correspondence to/from insured
  • Current itemization of bills
  • Which party has the money
  • Determination of the decision maker
  • Reference to current law for the jurisdiction
  • Any applicable policies or master plan documents

5. Develop options for recovery.

The first step in recovery is not to let the case go stale. If you can settle a portion of the case, resolve that portion and leave open the option for settlement of additional features in the future. For example, settle your medicals first, like Med Pay or PIP. Then leave open the option to settle the BI. Subrogation recovery options vary from filing arbitration, suit, intervention into an existing suit, or filing a lien against a recovery. 
If settlement is the recovery option, there are several considerations to consider to increase your chances of recovery. When attempting to settle your subrogation case, develop a game plan before the negotiations start. Ensure you are knowledgeable about the issues and your counterpart. Identify issues during settlement that delay or halt negotiations and prevent your cases from settling. To increase the longevity of your negotiations in the future, work toward a win-win settlement but react strongly to an untrustworthy party at the negotiating table. Avoid negotiating with yourself because it takes two parties to negotiate or renegotiate a settlement. 
Once the case is settled, identify the proper and required parties to execute the release. Then you can confirm all settlement terms and the potential pitfalls. From there, identify when motions to enforce settlements should be filed and how they may work to have your case settled. Lastly, identify the required terms of dismissal and settlement documents to be filed and the importance surrounding the timing of the filing of said documents. 
If a settlement is not possible, your subrogation claim may need to file suit. Effective litigation involves utilizing strong experts, engaging in effective discovery, and having a strong trial presentation.
When engaging in effective discovery, keep in mind that there are three primary purposes of discovery:
  1. Fact-finding
  2. Impeachment or obtaining admissions (whether that be turning a witness, setting the standard of conduct, or establishing safe parameters for cross examination)
  3. Preserving testimony.
Ensure you maintain a discovery plan throughout the process and utilize that discovery plan to determine the forms of discovery that are appropriate. At the time of trial, capture the jury’s attention with a powerful opening statement and apply the opening statement to lay out the case themes. Ensure that key phrases are repeated three times to ensure it resonates. 
If you have any questions or want to connect, please contact Tiffani at any time.
This blog is not a solicitation for business and it is not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.

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