Experts in ADR Coverage Disputes
EXPERTS IN ADR COVERAGE DISPUTES
There are many times when the use of an Expert in ADR coverage disputes can resolve a case effectively and economically. Alternative Dispute Resolution (ADR) is an all-encompassing phrase for “let’s avoid trial costs and get this case resolved with reasonable costs”. Historically it usually includes Arbitration and/or Mediation. (It also includes the ancient, now forgotten, process when lawyers would talk to each other instead of just text, of going to the bar after a deposition and discuss settlement). The difference is that Arbitration puts the final decision for resolving the case in the hands of a decision maker (arbitrator) while Mediation allows the respective parties to decide when the proposed settlement offers are good enough to finalize the case. (The ancient process put the decision in the hands of the bartender). There are some variations and hybrid procedures such as non- binding arbitration which allows the parties to get a free look at how a neutral “judge” views the issues and allows the parties to ignore the result. There are also some Mediation procedures by which the Mediator is specifically permitted to make a “recommended” settlement based on his experience and knowledge of the case. Either procedure sometimes cries out for using an Expert in the ADR process to resolve Coverage Disputes. The Anderson Edge provides Experts in ADR Coverage Disputes.
Technical Knowledge and Education
Under either procedure, the Arbitrator and/or the Mediator (Hearing Officer) will need to know the facts and the law with respect to the case. If the issues are technical or complex, or require some special knowledge of a special industry, the attorneys for the parties will have to educate the Hearing Officer. The attorneys may be able to do so, but often it is helpful to have an Expert available to educate the Hearing Officer on the subtle issues involved in the coverage dispute.
In an Insurance coverage dispute, the underlying facts of the case are often fairly clear as to how, when and why something happened, but the policy of insurance will have coverage language and exclusions to coverage that are technical and have long historical tails that are used to interpret the meaning of the documents.
At this point, the Expert in insurance coverage can add great value to the ADR process. In an Arbitration, the Expert will be equal to a trial witness. The Hearing Officer can evaluate the expertise and credibility of the witness and compare their opinion to the expert on the other side. If the Arbitration is non-binding, the litigant gets a free look at how his theory of the case and opinions will hold up later if the case goes to trial.
In Mediation, the Expert serves to assist in several ways. First, in private caucus with the Mediator the Expert can give solid credible arguments to the Mediator to allow him to establish the coverage position and to challenge the position taken by the other side. The attorney for the litigant may be effective in communicating this information, but the fact that a qualified expert supports the position allows the Mediator to push the other side with the fact that (1) the other side is prepared since they already have an expert aboard, and (2) there is credible opposition to their interpretation of the policy. Second, if both sides have experts, the Mediator may seek permission to put the experts in the same room to debate their differences. Sometimes such discussions allow the parties to “boil” the case down to a key issue and eliminate the fringe issues, thus saving attorney and trial time down the road.
Early Retention of Insurance Expert for Coverage Disputes
Early retention of an Expert in a ADR coverage dispute case may save lots of headaches later on. The Expert can assist the attorney in preparing discovery and identify the key facts that are necessary to resolve the coverage dispute. This should be done regardless of whether the case is headed to Arbitration, Mediation or Trial. Even at the pleading stage, insurance expert evaluation can be significant. What happens if the Plaintiff attorney pleads causes of action that are clearly not covered (e.g. intentional torts and / or punitive damages) or pleads directly into an exclusion (negligence against an accountant related to securities law violations). Most accountant malpractice policies contain an exclusion for losses resulting from violation of the securities laws. It is important to know these issues before you commit to a strategy and move the case forward, only to discover that there are no funds to pay the judgment.
Use Insurance Experts in Insurance Coverage Cases as the Arbitrator or Mediator
If the litigants have a dispute involving insurance coverage, who best to act as an Arbitrator or Mediator to assist in resolving the dispute than an Expert who has specific knowledge of the technical area that is the center of the dispute. In an Arbitration, the Expert may be one of 3 arbitrators, or the sole arbitrator. In a Mediation, the Expert will probably be the sole Mediator. Remember, in Mediation, the parties control whether the case resolves, so even a Mediator that has some preconceived ideas, if he is good, can still drive doubts into the positions and opinions of the other side. He knows where all the coverage bodies are “buried” so to speak. If the parties do not like the possible solution, they simply reject it and move on to trial. But, at least they had a good opportunity to debate the issue with a knowledgeable Expert and get a feeling for the strength or weakness of their respective arguments.