Four Key Strategies for Early Claim Intervention and Resolution
If you’ve spent any time handling or overseeing claims, there’s a major prevailing theory that reigns true over and over: “claims DO NOT get better with time”. While this isn’t a new theory, there are two emerging trends that support it now more than ever. These two “trends” are Investor Financed Litigation and the Reptile Theory.
While I call these emerging trends, the reality is they’re nothing new, however, we’re beginning to experience both more frequently. Investor Financed Litigation consists of financial investors funding and supporting plaintiffs in legal cases in exchange for a portion of the settlement. To be successful, lawyers then use the Reptile Theory to scare the jury into believing their safety and/or survival is in jeopardy.
In a previous blog post, our Senior Vice President of Risk Services described these two theories in more detail. He stated that when combined Investor Financed Litigation and The Reptile Theory can be disastrous to a company. Let’s review the four imperative prevention strategies that your organization should consider in order to avoid a significant loss.
Early intervention and resolution is the best way to combat these plaintiff tactics. Early intervention can look different based on the injury and type of loss, however, key considerations include:
- Compassion: When there’s an event, show compassion. It’s common that when a loss occurs compassion and remorse are confused. An apology may or may not be appropriate depending on the fact pattern. Compassion is a good way to humanize a company and can lead to early discussion of how a situation can be resolved.
- Right the Wrong: Discuss with your counsel how a wrong could be rectified without giving up any potential defenses during litigation. I’ve seen companies successfully contact consumers and resolve their claims for a reasonable amount, as opposed to waiting for suit, and allowing the situation to grow into a class action event.
- Consider an Early Settlement: This is probably one of the most challenging considerations for certain situations. There’s always a cost to defend a matter, and there are settlement options (like confidentiality requirements) that can help keep these matters out of the public.
- Early Mediation: The right mediator can help position a claim that’s early in the process for settlement. If attempted before experts and depositions comes into play, a just resolution can be achieved without both sides incurring excessive legal costs.
For more information or to review your risk management practices, contact a member of the ‘A’ Team today.
- Claims Management Flyer
- Investor Financed Litigation and the Reptile Theory
- How to Play and Win in Claims Mitigation
- Seven Tips for Preventing EPL Claims
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