Mass Tort Presentation

Taming The Mass Tort Beast:Taming The Mass Tort Beast:
Maximizing Insurance ForMaximizing Insurance For
Mass Tort LiabilitiesMass Tort Liabilities
RIMS SAN DIEGORIMS SAN DIEGO
APRIL 20, 2004APRIL 20, 2004
Lee M. EpsteinLee M. Epstein
Michael F. RettigMichael F. Rettig

Fried & Epstein, LLP 2
Taming The Mass Tort BeastTaming The Mass Tort Beast
(Overview)(Overview)
GoalGoal:: Secure a Defense and IndemnificationSecure a Defense and Indemnification
when Needed - - Avoid coveragewhen Needed - - Avoid coverage
LitigationLitigation
Key #1Key #1:: Compile the Right Team Gain CompleteCompile the Right Team Gain Complete
Key #2Key #2:: Coordinate Management ofCoordinate Management of
Underlying Case and Insurance ClaimUnderlying Case and Insurance Claim
Key #3Key #3:: Understanding ofUnderstanding of
Underlying Liabilities and AvailableUnderlying Liabilities and Available
Insurance CoverageInsurance Coverage
CautionCaution:: Do Not Let the Insurance Tail WagDo Not Let the Insurance Tail Wag
the Mass Tort Dogthe Mass Tort Dog

(Know Your Liability)(Know Your Liability)
Quantify Nature and Extent of Potential LiabilityQuantify Nature and Extent of Potential Liability
Nature of Claims AllegedNature of Claims Alleged
– Covered v. Uncovered ClaimCovered v. Uncovered Claim
Type and Severity of InjuriesType and Severity of Injuries
Timeframes InvolvedTimeframes Involved
Methods and Routes of ExposureMethods and Routes of Exposure
Company KnowledgeCompany Knowledge
– What was known about product when soldWhat was known about product when sold
– What warnings providedWhat warnings provided
– What known about specific uses and disposal practicesWhat known about specific uses and disposal practices
Type of Damages AllegedType of Damages Alleged
– Punitive/Consequential/CompensatoryPunitive/Consequential/Compensatory

(Know Your Coverage)(Know Your Coverage)
Looking for Coverage in All the Right PlacesLooking for Coverage in All the Right Places
Identify All Types of Potentially Applicable PoliciesIdentify All Types of Potentially Applicable Policies
– CGL, Products, D&O, E&O, 1CGL, Products, D&O, E&O, 1stst
Party PropertyParty Property
Quantify Available Insurance CoverageQuantify Available Insurance Coverage
Years of Implicated CoverageYears of Implicated Coverage
– Lost or Missing PoliciesLost or Missing Policies
– Insolvent InsurersInsolvent Insurers
Limits/Deductibles/SIR’sLimits/Deductibles/SIR’s
– Per occurrence v. aggregatePer occurrence v. aggregate
RetrosRetros
CaptivesCaptives
Coverage ChartCoverage Chart

(Securing a Defense)(Securing a Defense)
Prompt NoticePrompt Notice
Forward suit papers to insurer without delayForward suit papers to insurer without delay
Focus on allegations which are typically insuredFocus on allegations which are typically insured
De-emphasize allegations which are not typicallyDe-emphasize allegations which are not typically
insuredinsured
Initial notice broad - - target specific carriers asInitial notice broad - - target specific carriers as
facts developfacts develop
Request Immediate DefenseRequest Immediate Defense
Control Defense if Insurer Denies CoverageControl Defense if Insurer Denies Coverage
or Reserves Rights or if Any Conflict ofor Reserves Rights or if Any Conflict of
Interest DevelopsInterest Develops

(Coverage Issues)(Coverage Issues)
Applicable LawApplicable Law
Defense v. IndemnityDefense v. Indemnity
TriggerTrigger
AllocationAllocation
– Pro Rata v. All SumsPro Rata v. All Sums
– Primary v. ExcessPrimary v. Excess
– Owens IllinoisOwens Illinois
Number of OccurrencesNumber of Occurrences
Expected or IntendedExpected or Intended
Known LossKnown Loss
Duty to CooperateDuty to Cooperate
Potentially Applicable ExclusionsPotentially Applicable Exclusions

(Know Your Insurer)(Know Your Insurer)
Insurers are Very HierarchicalInsurers are Very Hierarchical
What authority level does claim rep. possessWhat authority level does claim rep. possess
Get to the decision-makerGet to the decision-maker
There is no Cookie Cutter ApproachThere is no Cookie Cutter Approach
Different insurers require different information in order tDifferent insurers require different information in order t
process a claimprocess a claim
Insurers are SlowInsurers are Slow
Provide sufficient lead time in advance of key eventsProvide sufficient lead time in advance of key events

(Get Insurers On Board)(Get Insurers On Board)
Fully Apprise - - Avoid SurpriseFully Apprise - - Avoid Surprise
Frequent status reports - paper trailFrequent status reports - paper trail
Package information so that liability canPackage information so that liability can
be fairly evaluatedbe fairly evaluated
Controlled access to Trial CounselControlled access to Trial Counsel
– Be mindful of applicable privilegesBe mindful of applicable privileges
– Have trial counsel be vigilant of coverage issuesHave trial counsel be vigilant of coverage issues
Make carriers full participants in defendingMake carriers full participants in defending
underlying caseunderlying case

(Get Insurers On Board)(Get Insurers On Board)
Develop Relationship with Carrier RepsDevelop Relationship with Carrier Reps
Build trust and respectBuild trust and respect
Mold facts -- do not misrepresentMold facts -- do not misrepresent
– Consider impact that trial strategy has on coverageConsider impact that trial strategy has on coverage
– Focus away from facts which defeat coverageFocus away from facts which defeat coverage
E.g., focus on product, not pollutionE.g., focus on product, not pollution
Realistically Evaluate CoverageRealistically Evaluate Coverage
Compromise where warrantedCompromise where warranted
Take a Reasonable ApproachTake a Reasonable Approach
If multiple carriers - - develop reasonable allocationIf multiple carriers - - develop reasonable allocation
methodologymethodology
Don’t stick it to any one insurerDon’t stick it to any one insurer
Seek Allies Among Insurer RepresentativesSeek Allies Among Insurer Representatives
Avoid Fronting Settlement FundsAvoid Fronting Settlement Funds

(Getting to Yes)(Getting to Yes)
Settlement Discussions/MediationSettlement Discussions/Mediation
Stress importance of carriers havingStress importance of carriers having
appropriate authority at mediationappropriate authority at mediation
If carriers hindering a desirable settlement,If carriers hindering a desirable settlement,
get mediator involvedget mediator involved
Seek insurer input regarding case valuationSeek insurer input regarding case valuation
Focus on risk to company of not settlingFocus on risk to company of not settling
within reasonable range and within limitswithin reasonable range and within limits
(punitives, etc.)(punitives, etc.)

(“Dotting the I’s”)(“Dotting the I’s”)
Settlement IssuesSettlement Issues
IndemnificationIndemnification
– FullFull
– LimitedLimited
E.g., to amount of settlementE.g., to amount of settlement
Form of ReleaseForm of Release
– ClaimClaim
– SiteSite
– Policy BuybackPolicy Buyback

(Summary)(Summary)
Compile the Right TeamCompile the Right Team
Retain consultants who posses the required expertiseRetain consultants who posses the required expertise
Success Linked to Realistic Understanding ofSuccess Linked to Realistic Understanding of
Underlying Liability and Available InsuranceUnderlying Liability and Available Insurance
coveragecoverage
Insurer Needs Similar to Management NeedsInsurer Needs Similar to Management Needs
avoid surpriseavoid surprise
properly accrueproperly accrue

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