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General Liability Reserving Principles Symposium
Basic reserving philosophy dictates that the Claim Professional should promptly establish a reserve that represents the gross ultimate probable cost/exposure, including investigation and legal expenses. A reserve is not based upon present settlement value, but rather the ultimate expected cost/exposure, which is what a Claims Professional believes may be paid for a loss based upon the set of factors unique to that claim. This symposium will address the foregoing philosophy and other variables to consider in evaluating a claim for reserving purposes.

This one-day symposium will discuss:

  • Evaluation of Claims
  • Litigation Management Plans (LMPs)
  • Budgeting
  • Trial vs. Settlement
  • Witness Evaluation
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TIME TOPIC
 
8:45 AM to 9:00 AM Welcome/Opening Remarks
 
9:00 AM to 10:15 AM Reserving Philosphy
When establishing a reserve, the factors to consider will vary based on the circumstances of the loss. Each of the following factors will be discussed:
  • Injuries
  • Damage issues
  • Prior experience with comparable claims
  • Liability/compensability issues
  • Applicable law
  • Legal liability (include joint and several)
  • Comparative fault issues
  • The extent of permanency
  • Jurisdiction involved
  • Reputation and ability of counsel involved (plaintiff and defense)
  • Case potential
  • Anticipated legal fees and expenses

Appropriateness of reserving is of the utmost importance. The initial reserve should be based upon a careful review of the first report and your early investigative findings, and an appropriate projection of the ultimate, probable cost/exposure, based on the information at hand.
 
10:15 AM to 11:00 AM Evaluation of Lawsuits (Part I)
The evaluation of a lawsuit for reserving purposes requires that the Claim Professional consider many variables. The following factors for consideration will be discussed:
  1. Witness evaluation.
  2. Legal defenses.

    a.) contributory or comparative negligence
    b.) liability of co-defendants and third-party defendants or potential defendants
    c.) assumption of risk
    d.) hold-harmless agreements
    e.) indemnification and/or contribution
 
11:15 AM to 11:30 AM Morning Break
 
11:30 AM to 12:15 PM Evaluation of Lawsuits (Part II)
  1. Prior medical history of plaintiff
  2. Medical history of plaintiff related to this accident
  3. Plaintiff attorney's ability
  4. Verdict range for injuries claimed
  5. Defendant attorney's ability
 
12:15 PM to 1:15 PM Lunch
 
1:15 PM to 2:00 PM The Litigation Management Plan
A Litigation Management Plan ("LMP") and Budget gives the defense team visible targets at which to aim. The LMP and Budget enables the Claims Professional, and defense counsel to develop a realistic case strategy and cost estimate that can be updated and adjusted as case developments warrant. The LMP and Budget requires defense counsel to consider litigation strategy before each important phase of the case and gives the Claims Professional an opportunity to eliminate unnecessary legal tasks that the Claims Professional believes are not cost effective. A Budget allows the Claims Professional to measure the actual defense costs against the agreed-upon estimates. Each of these aspects will be discussed in depth.
 
2:00 PM to 2:45 PM The Three Phases of an Effective LMP
The following three phases of an effective LMP will be discussed along with their respective objective:
  • Phase I establishes the focus for the litigation
  • Phase II is a period of time after the litigation has been evaluated and settlement has been selected as the preferred means of disposition, but the case has not been concluded at the end of Phase I.
  • Phase III is that period when litigation is prepared for trial.
 
2:45 PM to 3:00 PM Afternoon Break
 
3:000 PM to 3:45 PM Case Studies
Working in small groups, participants review reserve case studies involving selected general liability scenarios. Each group will evaluate individual case studies to determine what reserve to set. After the participants have finished with their reserve analysis, each group will discuss how and why they arrived at the reserves they posted for each of the given scenarios.
 
3:45 PM to 4:15 PM Questions and Closing Remarks