Not too long ago, I was monitoring the trial of a large, complex
third party liability claim involving multiple plaintiffs, a fatality, a severe
injury, a bystander claim and several "dirty underwear" claims. It
was interesting and boring all at the same time, and I genuinely feel sorry for
the jurors who had to sit through that mess and render a verdict. It occurred
to me that most people have no clue what goes on in litigation, the costs
involved, etc. So, allow me to give you a primer on the world of litigation
from the perspective of a jaded insurance claims professional.
First, let me give you a little background and disclaimer. I have
been in the insurance business since 1991, and I've been handling claims since
1995. The majority of my years of claims
handling has involved handling, overseeing, negotiating, managing and otherwise
dealing with what are considered high exposure, complex and litigated third
party liability claims. I have dealt with attorneys on both sides of the bar. I
have seen good, bad and average attorneys. I have dealt with fraud,
exaggeration, malingering, faking, "lawsuit lottery", and a whole
host of things that people try to pull thinking it makes their claims more
valuable. I have seen the best and worst in people. I am jaded, cynical and not
a little biased against plaintiffs, attorneys and judges.
To sum it up, when people threaten to sue me, my company or my
insureds, I have a pretty good idea how things are going to play out.
So, where do we start?
First off, the United States Constitution and most, if not all,
state constitutions guarantees everyone equal access to the court system. That
includes illegal aliens whether we like it or not. According to my quick Google
Fu, something like 15 or 16 MILLION lawsuits are filed across the US every
year. Of those, on average, only about 2% of all lawsuits filed ever go to
trial. Some estimates even put that number at less than 1% (which is pretty
close to my experience at two large, national property/casualty insurance
carriers).
Statistically, that means the likelihood of you "having your
day in court" are slim. You are much, much more likely to settle your case
out of court.
Now, let's talk about the length of time involved. All states
have a statute of limitations which governs the length of time you have to
bring a lawsuit. It varies from state to state, and the limitations period can
depend on what kind of claim is involved. For instance, here in Texas the
statute of limitations (a.k.a. "the statute" or the "SOL")
is typically 2 years for most third party liability claims and 4 years for
claims involving contract disputes. One exception to that rule is the statute
of limitations for minor children. They get two years from their 18TH birthday
to file suit.
So, for example, let's say you are in a car wreck today (which
would be fairly typical reason for most people to consider litigation). It
could be as late as 2016 before you have to file a lawsuit. Some states have a
shorter limitations period (Louisiana is typically one year) while others have
longer limitations periods (6 years is the max on a personal injury case that I
am aware of and the majority of states have a two year statute). The statute can
be as long as 20 years on contract claims in some states; and most notoriously,
the state of Minnesota effectively lifted the statute of limitations in the
1-35 bridge collapse case a few years ago. That situation is a little more
complicated because it involves long term construction defect issues and is
hopefully an outlier rather than a developing trend.
There is usually no lower limit on when you can file suit. The
case I mentioned at the beginning of this post involved an accident that
occurred on a Saturday, and the lawsuit was filed first thing Monday morning.
However, in some types of cases, there can be administrative hurdles you have
to clear before you can file suit. Homeowner/Residential construction defect
cases and employment discrimination (a.k.a. EEOC claims) cases often involve an
arbitration or administrative right to sue process prior to filing suit.
Now, once you've filed your lawsuit, the waiting game REALLY
begins. With certain exceptions, the parties to a lawsuit are entitled to engage
in an information gathering process known as the discovery process. The
discovery process is usually subject to time table either agreed to by the
parties or dictated by the court and is usually governed by the controlling
law's rules of civil procedure (ex. a Texas civil lawsuit filed in state
district court would be subject to the Texas Rules of Civil Procedure). Some
courts are known to aggressively push the cases assigned to their dockets in
which affectionately become known as "rocket dockets". Other courts
are ambivalent at best and outright slow or corrupt/incompetent at worst.
The discovery process is usually comprised of three phases (more
or less). The first phase is generally referred to as written or paper
discovery. This consists of requests for written interrogatories (a list of
questions the party wants answers to...stuff like identify people with
knowledge of relevant facts, etc.), requests for production (give us copies of
stuff you have like police reports, photos, your Facebook account, etc.) and
requests for admissions (admit or deny that you are a moron, etc.). The next
phase of discovery, sometimes referred to as oral discovery, are the
depositions of parties and witnesses. Finally, there is expert discovery which
includes obtaining reports and depositions of potential experts including
doctors, engineers, etc. Written discovery typically happens first but can
continue through the life of the case as new information develops. Depositions
and expert discovery can and often to happen concurrently although experts are
often dealt with last just before trial.
Time wise, the discovery process can take as much time as the
court will give you. In my experience, six months is about the bare minimum to
expect for discovery in a simple two party car wreck case. It can go on for
years if the court allows it. On average, I would say 9 to 18 months is pretty
typical for most cases to get through the discovery process. As a rule of
thumb: the more complex the case, the longer discovery will take.
Two other major time sinks in the litigation process are
alternative dispute resolution (aka "ADR") processes such as
mediation and/or arbitration and "motion practice" where motions for
summary judgment, motions to dismiss, venue challenges and other legal minutia
gets argued before the court.
Generally speaking, courts are reluctant to dismiss a plaintiff's
claim(s) on a motion regardless of the validity of the motion or the soundness
of the legal position upon which it is based. Some of that is due to a trend of
increasing "liberal" or plaintiff oriented bias on the bench which is
an outgrowth of the popular election of judges in most states. Where you have
executive appointment of judges (such as at the Federal Court level), you tend
to see more motions for summary judgment granted than in courts where judges
have reelection to consider. Typically, a court will not entertain a ruling on
a motion until the majority of discovery has been completed. Part of the reason
for this is the nature of the motion for summary judgment outcome. A motion for
summary judgment (or dismiss, etc.) basically argues that there are no issues
or material fact for a jury to decide and that the plaintiff's (or defendant's)
claims should be denied or dismissed as a matter of law. Judges generally have
significant latitude and discretion on when and how to rule on a motion. Many
will "take the matter under advisement" which sometimes is code for
"I don't know what to do with this mess" or "I'm going to hang
onto this issue until I think I can leverage it into forcing one side or the
other to get more reasonable and settle this mess without the need for a
trial" or "my lunch is talking back to me and I need to go to the can
RIGHT NOW." Bottomline is that the judge can rule or not rule on a motion
at his discretion in his own sweet time (appellate judges are even worse).
The other major time sink which courts have really taken a liking
to is ADR because it disposes of the vast majority of cases through negotiated
settlement or a binding arbitration decision. ADR usually takes place after the
majority of written discovery has taken place but typically before the expense
of expert discovery is incurred. Expert discovery can be very expensive and
time consuming. So, most smart people try to see if there is a chance to settle
the case before incurring costs that will potentially put the case out of reach
for a reasonable result (we'll talk more about the economics of this shortly).
Frequently, parties will schedule a mediation after a motion for summary
judgment has been filed but before the court has ruled on it as a means of using
the uncertainty of the judge's ruling as negotiating leverage.
This is not to say that ADR is the be all end all of resolving
litigation. My experience has been that only 30 to 50% of cases settle or
resolve at the first mediation or arbitration (some arbitration agreements have
a "de novo" right of appeal to the traditional court system). The
remainder of those 90+% of cases that settle or resolve short of trial do so
via informal negotiations between the parties. But, ADR is usually key to
facilitating those negotiated resolutions.
Now, if you've negotiated the discovery waters, shot your wad in
ADR without getting a settlement you can live with and had the court ignore or
deny your motions for summary judgment long enough to reach the front of the
trial docket.... Oops. I forgot to mention the hidden time sink in all
this...the court's docket. Every case that is filed gets set on a court's
docket. Each court will eventually issue a document sometimes a case management
order, scheduling order or something to that effect which sets out the
deadlines and timeframes for each case. It's important to note that these
deadlines and timeframes are subject to change for any number of reasons
including conflicts with other cases, the court's hearing and motion docket,
etc. In some rural counties, there is one court for the entire county including
criminal, family and civil matters. In those counties, criminal matters take
precedence followed by family court with civil matters getting the leftovers of
whatever time is available. Woe be to the person awaiting trial in a rural
venue serviced by a circuit judge who presides over the courts of multiple
counties (yes, they still exist) due to sparse population.
You may have a scheduling order that says your case is set for
trial on date X; however, your case may be sharing that date with 15 or 150
other cases. This is particularly true of counties where there are large
metropolitan cities such as Dallas or Houston. If you are number 150 on the
docket for a given trial date, you are not likely to get reached and your case
will be continued to the next available trial setting. If you are number 15 on
the docket, there is a very real chance you may go to trial as other cases
ahead of you settle or continue for various reasons. If you are number 1 on the
docket or have a "special setting", you are going to trial unless you
cough up a lung or have a death in the family or can give the judge some other
REALLY good reason why you can't go to trial that day. Resettings typically get
punted 6 months or more down the calender. How much further down the docket
depends on how annoyed the judge is with one or both of the parties. This cycle
of continuations and resettings can go on indefinitely if the judge allows it.
So, anyway, digression over. You've made it to trial. Go buy a
lottery ticket. Your odds of getting the result you expect or think you deserve
are roughly the same. I've been doing this a long time, and one of the first
things you learn is that NO ONE can accurately predict what a given jury will
do with a specific set of facts on any given day.
Trial can last from a day or two start to finish for a simple,
two party, car wreck case to months for more complex cases. Trial starts with voir
dire (don't ask me to pronounce it, i've heard at least three different
ways to pronounce, and I'm not sure which is correct...nor do I really care).
It's a Latin derived term. Lawyers love Latin terms for some reason. Anyterm,
VD is when a panel of prospective jurors are brought in to be quizzed by the
attorneys (and sometimes the judge too) about various topics related to the
case and the jurors' potential suitability or lack thereof to serve on the jury
panel.
If you want to get out of jury duty, the most reliable way I've
come across is to be vocal and opinionated during VD. It's the quiet ones who
typically get stuck on the jury because that haven't said anything to annoy one
side or the other enough to make them either petition the court to strike them
for cause or to burn a preemptory strike on them. You can tell when you've said
enough to annoy an attorney when they tell you that they "want to hear
from some of the other potential jurors." That's the signal that they know
exactly who you are and what you stand for and they will probably gladly give
you a hall pass to get off their jury.
The bigger the case, the bigger the jury pool, the longer VD
takes. I was called for a pool on a capital murder trial about 17 years ago.
The pool was 250 potential jurors. VD took three weeks. The first day was just
filling out a 20 page jury questionnaire. Day two was general question of the
group at large. The remaining time was taken up by the prosecution and defense
conducting one on one interviews of each of the first 60 jurors before the
court.
Why the first 60? It's like this...the jury that gets seated to
hear the case (any case) is not the best and the brightest. It's the first 6 or
12 (depending on the court not including alternates) people from the pool who
are not disqualified or struck for one reason or another. If you are in the low
numbers of a pool, your odds of getting selected are substantially greater than
if you are in higher numbers.
That capital murder trial? The court didn't want to waste
resources interviewing all 250 if they could seat 12 plus three alternates out
of the first 60. I was number 16. Fortunately, the defense didn't like me
enough that they used a preemptory strike on me. It might have had something to
with my comment about not trusting sleazy defense attorneys. Perhaps. Same
principles apply in civil litigation although civil courts don't always use 20
page jury questionnaires.
After a (now disgruntled) jury is sat (empaneled is the proper
term), we get to the nitty gritty of trial. First, both sides make an opening
statement for the court in which they hope to show the judge and jury what they
intend to prove with the evidence. Opening statements are not testimony or
evidence although attorneys frequently try to use them as a vehicle to slip
little nuggets in that they may not be able to get in front of the court
otherwise. Plaintiffs always go first. Defense is second.
After opening statements, the plaintiff gets to present their
case in chief. They call witnesses to provide testimony and introduce evidence.
Let me take a moment to disabuse you of a notion here. Every witness is sworn
in by the judge with the traditional "do you swear to tell the whole
truth...." oath. The sad reality is that a game is being played out behind
the scenes out of the jury's presence in which the parties file motions in
limine in which the court determines ahead of time exactly how much of the
truth the jury gets to hear (or see). If an attorney strays out of bounds
during the questioning of a witness, the opposing attorney will make an
objection. The judge then rules on the objection by either sustaining,
overruling or admonishing the attorney to redirect. Particularly egregious
violations of the rules of the game can lead to mistrial and/or sanctions
against the offending party. So, to recap, the jury never gets to hear the
"whole truth". They get to hear what the judge and the attorneys have
agreed they can hear. Fair rarely enters into it.
Back to witness testimony. The opposing attorney can question the
other sides witness on cross examination. This will go back and forth on
redirect or rebuttal until both sides are satisfied that they have made their
points with a particular witness.
After the plaintiff rests their case, the defense can file a
motion for directed verdict asking the court to render in their favor usually
arguing that the plaintiff did not provide sufficient evidence to prove their
case. It is rare to see a court grant a directed verdict. Following the denial
of the motion for DV, the defense gets to put on their case in chief if they so
choose. Same rules apply as before. Plaintiff can cross exam the defense
witnesses.
Once the defense rests their case, there is the charge conference
in which the attorneys present proposed jury charges to the court. The court
hears arguments on the respective charges and eventually a decision is made as
to the final charge which will be given to the jury.
After the charge has been decided, the attorneys are ready to
give their closing arguments. This is where they have the final opportunity to
give the jury a road map to what they think the evidence proves and any damages
that should be awarded. Here again, plaintiff goes first and defense goes
second. There is one exception here. After defense gives their closing
argument, the plaintiff has the option to give a rebuttal (if they have
reserved some time for it). The plaintiff is, in effect, given the last word
before the jury begins deliberations.
Jury deliberations are an interesting animal. I have had the
pleasure of watching a mock trial involving three full jury panels in which the
"jurors" believed that they were actually rendering the verdict in a
case. The first thing that happened when deliberations began was that the
jurors ignored the judge's admonitions and talked about everything they were
told not to discuss or consider.
One of my co-workers (a woman) has a theory about jury
deliberations. Her theory is that the most opinionated woman on the jury will
sway the panel to her position. Here's how she gets there (and she has been on
a jury herself): Men, when arguing, tend to state their position, say what they
have to say and then fold their arms across their chest. At that point, men are
done arguing. They have nothing else to say. Women, on the other hand according
to her, will keep yapping until everyone gives into her just to get her to shut
up. Frankly, I'm not entirely sure she is wrong.
Jury dynamics and feedback is a whole 'nother other can of worms.
Needless to say, jury verdicts very rarely hinge on the facts or evidence and
oftentimes have more to do with something completely unrelated to the case than
anything else.
Now, after the jury is done messing around, you get a verdict.
Let's talk about the economics of that verdict for a moment.
Let's say for the sake of argument that the amount of the verdict
is $1,000,000. Does that mean the plaintiff gets $1,000,000? Hell no. First
off, on the plus side, the verdict is subject to pre- and post-judgment
interest. Here in Texas, for simplicity's sake, it's 5% per annum simple
interest (i'm not going to bore you with all the details of when it starts
accruing). So, if it took you 2 years to get to trial, that's $50,000 per year
in interest (again...for the sake of simplicity). So, we are up to $1,100,000.
Now the fun really begins because that $1.1 million has to pay the attorney,
the experts, the expenses and cover any unresolved economic damages (such as
outstanding medical bills or workers compensation benefit liens).
Plaintiff attorneys typically work on what's called a contingency
basis. This has its benefits and drawbacks as I will attempt to explain. A
typical contingency contract states that an attorney will take a percentage of
the total recovery plus expenses. The plus side is that the attorney takes
nothing if they recover nothing. Most of the contracts I've heard of use a
sliding scale. The attorney will take 33% if the case resolves before suit is
filed, 40% if it resolved after suit but before trial and 50% if the case goes
to trial and verdict. That percentage is taken often calculated AFTER expenses
have come off the top. So, if an attorney spends $100,000 on things like court
reporter fees for depositions, expert fees, exhibits, advances, travel, etc.,
he or she is going to take that $100,000 off the top and then take their
percentage of what's left. Using our hypothetical verdict, that means that the
plaintiff would be netting $500,000 from a $1.1 million verdict BEFORE any
unsatisfied economic damages have been paid.
The drawback to a contingency fee is that, in smaller cases, it
is frequently possible and even highly likely for the attorney to make more
than their client and even for the client to net NOTHING. You mean to tell me
that I could be patient, wait all that time, slog through trial after beating
the odds to get there and still get nada, zip, zero?
Yep, you betcha.
So, why don't you hear more about that?
In a word, ethics. Most insurance claims professionals are
ethically prevented, if not legally prevented in some states, from encouraging
or discouraging someone from engaging the services of an attorney. It has to do
with conflicts of interest and the unauthorized practice of law. I can get away
with it here since I am not advising anyone on the specifics of their
particular case or trying to dissuade them from seeking the advice of counsel
as I am just merely presenting factual information for your enjoyment and
edification.
In fact, I will go one better. I encourage you, should you find
yourself in a situation in which you may need to consider litigation, to
consult an attorney. Actually, you should probably consult at least three (many
will offer the initial consultation for free or for a small fee) to comparison
shop not only their opinions of your case but their fees as well. Then, you can
make an informed decision of whether or not it is a wise investment of your
time and money to pursue your claim further.
Just know that the value of your case is not likely to magically
increase in value for the claims person just because you've retained an
attorney.
Thus endeth this lesson.
Dear Sweet Jesus - i thank you for all that i have learned from this post. i have learned much. but in reading this thing in it's entirety, i believe that i should be compensated for losing 5yrs off of my life-span. now i am going to go and hire a lawyer and sue you Daddy Hawk. even though it will probably take 17yrs to come to court (international law suit and all of that!) but i am sure to get at least $50 bucks of of the $15,000 settlement.
ReplyDeletenow because i actually read through all of that - i will make you read through all of this and you BETTER read it!
back in the city we lived next to an empty lot that was for sale for a million years. we had a 25ft hedge that ran between our two properties. someone bought the property next door and one morning i woke up to hear a chainsaw. someone was cutting down one of the last white pines in all of ottawa. i called the police. they told me to call the bylaw office. someone would come out in a day or three. i told them they were out there cutting down the tree now. crickets. tree down. then 2 days later a backhoe started digging and knocked out 10 full feet of those fully grown hedges along with about 40 feet of our fence. i called the police. crickets. i called the bylaw office. crickets. and then i called a LAWYER!!!!! by the time it was all over, the majority of our fence and hedges had been ripped out, a McMansion had been built on top of the property line, and for $7500 our lawyer sent 2 very-strongly worded letters. actually, that's a lie. the letters were bland at best. we learned our lesson.
thank you for reminding me of that lesson.
your friend,
kymber
kymber, I will make you a one time settlement offer of 50% off your next subscription renewal to this blog.
DeleteYou are welcome for the reminder of the lesson learned. It still sucks that your new neighbors in the city didn't have the courtesy to consult with you before tearing things up. While we are on the subject, how can they build right on the property line? Down here, most zoning laws include a "build line" which leaves a buffer zone between the building and the property line to avoid this kind of nonsense. If they had thought about it, any problem on that side of the house would require them to get the permission of the neighboring property owner for repair people to go on the neighbors property o fix anything. Otherwise, it would be trespass.
For future reference, people running chain saws typically don't get paid enough to argue with someone pointing a shotgun at them.
Daddy - make it 75% off and i will call the lawyer back and tell him to cancel the lawsuit.
Deletei don't even know where to begin to be able to answer your questions. apparently the city of ottawa wants new construction and will overlook all kinds of zoning things. the nitwit who built almost right on top of us had our whole street shut down for two days while digging out to the city water supply?!?!?!? apparently that was ok. our lawyer did put us in touch with the contractor that ripped down our fence and hedges but they said that once they were finished of the 250 million other contracting jobs that they already had lined up they would come out and repair our fence.
anyway, after all of that happened we got the house ready to sell in about a month and sold it to the first couple who came to our only open house. they made an offer for full asking price the next day. and we showed them and explained to them all that had happened. they asked if they could back on the weekend with some family members - about 200 cars showed up in our driveway and our house was packed. the girl's family were a very tight-knit greek family and her father walked along the property line with a measuring tape. he told us that he would put buddy through hell as he was a big property owner in ottawa. needless to say, before we even moved, our next door neighbour had to remove his air conditioning unit to the other side of the house and a whole row of new hedges were planted - all of which came from her father making complaints to the right people. when jamie went back to ottawa the following year, he drove by our old house and the fence was completely rebuilt. we are pretty happy that the buddy who built a mcmansion on top of us is now dealing with next door neighbours who have clout. i am sure that her father has all kinds of complaints against that guy with the city....it's like karma really works or something eh?
much love to you, The Queen, and sweet M&M always! your friend,
kymber
kymber, 62.5% off my normal, low, low subscription rate is my final offer.
DeleteNo offense, but it sounds like y'all picked a crappy lawyer. He put YOU in touch with the contactor?? Why didn't HE get in contact with them and give them a chainsaw enema? $7500 Canadian must not buy as much as I thought. I'd be asking for a refund if I were you, 'cause he did exactly jack squat nothin' for y'all.
I'm glad y'all were able to give the nitwit an epic karmic beat down with the big, fat, Greek neighbors.
Daddy - we can't go lower than 68.5 %....and that is our final offer. otherwise i am calling the lawyer.
Deletecrappy lawyer? we called the bestest and mostest known lawyer's office in the city and were handed to a 28yr old guy who just passed the bar exam. but we still had high hopes for him. we thought he would, at the very least, write strongly worded letters. WRONG! as for the karmic beatdown....teeheehee. the girl's dad had worked in construction in ottawa for some 40 yrs....you can bet that for over the past few years he is putting that nitwit through hell. teehee. yes, i know that i am bad for giggling over that.
as always, much love to you, The Queen, and baby M&M! your friend,
kymber
kymber, my offer is now 60%. You will actually net more if you accept it than if you hire your lawyer and pay him 33% of whatever you hope to get.
DeleteBestest and mostest known lawyer huh? That was your problem. They have egos and refuse to supervise their minions. Also, you bring up a great point I didn't get into which is the internal workings of lawfirms. Partners very rarely do any grunt work instead passing off mundane tasks to "baby lawyers" so they can get some billable hours in, get experience, etc. Baby lawyers need to be supervised and given direction. Good partners can do this effectively. Bad partners or partners with severe ego issues...not so much. Your baby lawyer wasn't getting the supervision and direction he needed.
Great information! Insurance companies don't like to pay claims and some inspectors or adjusters are invented to deny claims. With this said, if you have a legitimate claim, you should expect to be treated fairly and expect the insurance company to honor the claim. Claims Pages
ReplyDeleteSophia, I'm not sure what you mean by "some inspectors or adjusters are invented to deny claims", but I will say that claims people tend to be a jaded and suspicious lot by nature (it comes from too many dealings with sleazy lawyers and angry claimants). Insurance companies are in business to make money like every other business. As such, saying they don't like to pay claims is almost akin to saying the Pope is Catholic. Having said that, some companies have a well deserved reputation for being difficult and reluctant to pay claims while others are less difficult. Perhaps my next articles in the series will be on insurance companies and adjusters.
Delete