INTRODUCTION
You represent an insurance company being sued for allegedly mishandling a claim. What can you do, both during discovery and trial, to transform your client into a “likeable” and “human” defendant? And, more importantly, should you even try? Or, should another method – such as including litigation as part of the extended customer service process – be the focus? Our panel will address traditional and current thinking about how and if an insurance company should be “humanized” as part of an overall defense strategy.
TRADITIONAL THINKING VERSUS 2017 THINKING
Traditional legal thinking tells us jurors decide insurance cases largely based upon sympathy for the plaintiff – and a corresponding dislike for the insurance company. In a similar vein, claimants’ counsel in ERISA litigation often seek to persuade the judge who will decide the case that the corporate defendant and its employees have disregarded the rights of their client.
Based on this “conventional wisdom,” many litigators advise their insurance clients to try to “humanize” themselves during discovery and trial. The hope is jurors will see the defendant in a more positive light – and possibly be persuaded to find in that defendant’s favor. The internet is full of legal articles advising insurers about how to appear more human, including tips like:
- “The use of plain spoken language, folksy and conversational … will assist in humanizing the corporate defendant.”1
- “Your demonstratives should inform the jury about the positive public and civic acts that your defendant has performed and the charities in which it is involved. Discuss the number of jobs the corporate client has created.”2
- The “[o]pening statement should include … a discussion of the ties the company has to the local community … numbers of employees, kinds of employees and the economic benefits and the human benefit the company’s business and services or products have provided.”3 A slideshow of employees at work was also suggested.
1 Diane Sullivan, The Jury Trial: Strategies for Humanizing the Corporation, AMERICAN BAR ASSOCIATION, http://www.americanbar.org/content/dam/aba/administrative/litigation/materials/ 2015_corporate_counselcleseminar/Materials/4b2_2_the_jury_trial_strategies_humanizing_corporation. authcheckdam.pdf.
2 Joshua Dubin, Tips for Defeating Juror Bias Toward Corporate America, LAW360, June 18, 2015: https://www.law360.com/articles/668902/tips-for-defeating-juror-bias-toward-corporate-america.
3 See Note 12, supra.
“Defense counsel is recommended to stay at a Marriott rather than a Four Seasons,” and should buy their “attire at [Walmart and JC Penny]” rather than Armani.4
But, does this approach really work? Or, is there a better strategy?
2017 THINKING
Decades of jury research have led to a counterintuitive, but data-supported, insight into how jurors think. The main problem with jurors in insurance litigation is not that they dislike the insurance company, but that they can quickly be made to fear the insurance company. Juror fear is the emotion often driving bad verdicts in insurance cases. If a plaintiff can make jurors fearful of the insurance company defendant’s behavior, that plaintiff is often highly successful at trial, particularly if the insurance company defendant does not know how to reassure jurors.
WHAT CASE FACTORS INCREASE JURORS’ FEAR?
Juror fear can be increased when an insurance defendant:
- Minimizes a mistake (especially when it’s obvious or egregious);
- Attacks the plaintiff’s character;
- Minimizes the damage to the plaintiff;
- Delays payment of a valid claim;
- Singles out an employee for blame; or
- Fails to show how a mistake has been corrected.
WHAT CASE FACTORS DECREASE JURORS’ FEAR?
Juror fear can be decreased when an insurance defendant:
- Implements policies and procedures that make sense and are easy to understand;
- Pays valid claims in a timely manner;
- Provides unhappy customers with a recourse;
- Actively manages claims;
- Stands by representations made by employees and agents; or
- Acknowledges mistakes.
THE “FEAR ANALYSIS”
4 Patrick O’Keefe, Humanizing Goliath, Softening the Perception of the Corporation as a Defendant, MICHIGAN LAWYERS WEEKLY, March 23, 2015, Vol. 29, No. 20, also available from http://www.okeefellc.com/softening-the- perception-of-the-corporation-as-a-defendant/
Having a modern understanding that fear, rather than disdain, sympathy, or hatred, drives jury verdicts in insurance litigation allows attorneys to more accurately evaluate the risk of a jury trial. For example, instead of focusing on how sympathetic the plaintiff is, a more accurate risk assessment involves questions like “How likely is it that the company’s conduct will make jurors fearful?” “Is there significant delay in paying the claim?” or even “How reassuring are my company witnesses?”
This modern understanding of juror thinking also allows attorneys to evaluate the usefulness of various trial strategies, including strategies like “humanizing” the insurance company defendant. The question to ask is “Does this strategy help reduce jurors’ level of fear?”
As noted above, some defendants attempt to use opening statements and demonstrative exhibits to inform the jury about the positive public and civic acts it performs in the community, the number of jobs it created, or its charitable giving. Even assuming the judge permits such statements, jurors frequently comment that such an approach does just the opposite of reducing fear and instead seems like a smokescreen. To many jurors, it seems like an insurance company is trying to hide bad treatment of a plaintiff behind good community works. At best, this information is irrelevant to jurors’ decisions; at worst, jurors see it as an attempt to cover up bad conduct.
RESTRUCTURING THE CORPORATE PHILOSOPHY TO ELIMINATE FEAR.
A “fear analysis” can even be useful for structuring a corporate philosophy:
Is there a way to structure a uniform, institutional approach to dealing with customers respectfully throughout the litigation process? One approach is to consider litigation as a part of the continuum of customer experiences, a reflection of the fact that underlying most suits is the belief that the company did not keep its promise.
Perhaps that process begins with the legal department in its day-to-day interactions with the claims department, working collaboratively on ensuring not only a full and fair review but also focusing on all of the items listed above – respecting differences of opinion and demonstrating attention to customer needs.
Insurance company employees could integrate the following concepts into their work and interactions with insureds:
- The written or spoken word does more than send a message. Otherwise, we would just send images or a list of options with check marks next to them. Rather, the words reflect your integrity and that of the company. Each communication ultimately becomes a story, recording the work you have invested in reviewing a person’s claim for benefits. They can also help calm emotions in a contentious situation.
- Think of yourself as an educator. Put yourself in the claimant’s shoes. He may have little experience with insurance policy terms. Include any reasons not to tell the claimant in detail what efforts you made to answer a question, retrieve a document, or review medical information supporting his claim?
- Communicate complex points in a simple fashion. By doing so, you are showing respect to the claimant and avoiding confusion. That may require re-reading a long letter, or having someone else do so.
- Claimants and insureds should be treated like a customer. It’s okay to empathize
– “the company expresses its sympathy for your loss.” Respect, professionalism, and objectivity are similar attributes of a meaningful message.
- Sometimes how you say something is more important than what you say. It may be helpful to use softer language on matters involving judgment and discretion that expresses your thoughtfulness and sensitivity (compare “it appears as though…“ to “it is obvious that…“)
- Strive for continual improvement. Does the last sentence in your letter or phone call match the tone and content of everything above it? Offering a claimant the opportunity to contact you is final, thoughtful gesture.
The corporate philosophy of humanization applies with particular force to depositions and of the company’s employees. Consider not only the obvious questions that will make the witness explain various components of the decision, but on the company’s commitment to reaching the correct result in a compassionate, thoughtful and unbiased manner. So, too, in a mediation setting, there is value from the insurer’s perspective in creating a personal connection with the claimant, even if the matter does not settle.
APPLICATION OF THE “HUMANIZING” APPROACH TO GROUP BENEFITS.
Let’s examine the group benefit environment, where the insurance company has a long-term relationship with its policyholder (the claimant’s employer) and in turn with each of its employees. Claimant’s counsel will often use the familiar concept of a “fiduciary relationship” in their summary judgment briefs and in court to portray the relationship as one where their client’s reasonable request for benefits is callously rejected by the insurer as a way of increasing its profits.
In this context, insurance company claim department employees who engage with group plan claimants in numerous ways throughout the average day are fully aware that an employee seeking benefits may justifiably see the claims administrator/insurer as her adversary.
Adopting a “humanization” approach in the employer-sponsored group benefit arena may be beneficial even for situations that do not ultimately result in the company
being brought into court. These routine, but nonetheless important, engagements include initial contact with claimants; communications with physicians, government officials and attorneys; responding to requests for information and preparing denial letters. Every interaction is meaningful and should convey the company’s mission statement of prioritizing each of its customer’s interests. Even the relatively simple act of paying a claim can show the company’s “human” side if conducted with respect and a positive, empathetic attitude.
If and when a claim does result in litigation, counsel’s work in conveying to the fact- finder of the court the insurer’s sense of community and habit of doing good works in the brief writing and oral argument phases of the case is then made much simpler – just tell it like it is.
DAY-TO-DAY PROCEDURAL PROCESS AND RELATIONSHIP BUILDING.
We’re now in court. Just as every customer interaction, every letter, every step in the process reflects the insurer’s human side, so too for every facet of the litigation process.
Have you ever been involved in a suit with opposing counsel or client who disrespected your client, relied on personal attacks and cross the bounds of professional ethics solely in an effort to win the case? Or seen counsel for an insurance company avoid meeting the claimant in court before a motion or settlement conference? Of course, these are easy examples of inappropriate conduct. More importantly, however, these actions will begin to create an atmosphere of fear once the case is presented to the jury or court.
Let’s remember, keeping in mind the various ways that the insurance company can “humanize” itself, that opportunities exist to continue that role-model behavior at initial scheduling conferences, mediation, discovery, non-dispositive motions and dealing with the court staffs (particularly when the case is to be tried to a jury).
Outside counsel has the ability to impress the court and reduce the fear analysis with a simple formula: by building relationships. This is particularly true where the company and counsel are in an out-of-state venue. How are those relationships built – by being reasonable, trustworthy, and forthright with claimant’s counsel and the court. If one of the goals of trying a case, whether to a jury or the court, is to convey the insurance company’s sense of humanity, then shouldn’t its counsel act in the same manner as the company did in the claim process? The answer is a resounding “yes.”
THE BOTTOM LINE
Jurors understand insurance companies are big corporations. Trying to “humanize” the company after litigation ensues is ineffective and wrong-headed. Instead, show jurors the company knows its business and manages claims well. Show jurors the company has taken steps to ensure claims are accurately paid with as little delay as
possible. Help your witnesses identify concrete steps the company takes in every case to resolve plaintiffs’ claims. Showing jurors and the court you understand (and have answers for) their fears is ultimately the best way to put a human face on the company.