Pump the Brakes: How to Keep Future Lawsuits from Spinning Out of Control

On a busy interstate in the American Northeast, a snow squall descended upon unsuspecting drivers going about their day.  While snow in that area is not uncommon, many drivers appeared deceived by the density of the storm and low visibility, leading to a pileup of dozens of vehicles that careened into each other, unable to stop in time to avoid the collision.  At least three people were killed and several more were injured, to say nothing of immense property damage caused by the accident.  Among the more jarring images were the semi-trucks barreling into much smaller vehicles with their occupants still inside, while others desperately attempted to time their escape to the shoulder of the road.

Unfortunately, accidents like this happen more often than anyone would like to see.  Still even a greater number of much smaller accidents occur every day; and while the number of vehicles involved may be lesser, the potential of harm to each involved individual remains significant.  That is why, no matter the complexity of loss, it is important for companies to have a collaborative legal team and strategy to respond to any situation and provide the best possible defense.  This requires complete attention to detail from the moment of the accident to the closure of the file.  Failure to do so could leave you careening down the road of litigation, unaware of the carnage that lies ahead, and unable to stop before the damage is done.

In this article, we will explore three main areas to be considered when handling any claim, but especially complex, catastrophic claims like the one described above.  First, before a lawsuit is even filed, companies, their insurers, administrators, and outside counsel must all participate in conducting a thorough investigation to determine the facts, preserve evidence, and identify any hazards that are likely to be encountered down the road.  Second, if and when suit is filed, companies, their insurers, adjusters, and outside counsel must maintain an open and honest lane of communication to avoid losing control in the pleading, discovery, motion, trial, or settlement stages of the case.  Finally, you must remember that workers’ compensation is a passenger, not just in your vehicle, but likely in several other vehicles as well.  Special consideration should be made to ensure that workers’ compensation does not become a costly blind spot.

I.            Accident investigation and pre-litigation concerns

When an accident occurs, especially a large one, a rapid response and can be key.  Although those initial moments may seem hectic and fast paced, they could be key in “slowing” everything down to properly handle the situation.

A.   Rapid Response

The Defense begins immediately following an accident. In a potential wrongful death case like the one described above; an attorney needs to be prepared to respond to an accident immediately. Immediate response can provide the defense with an opportunity to obtain information and assess liability and potential damages. Taking photos, statements, and ascertaining any environmental or hazardous conditions can provide the client with a great advantage early on. A rapid response can also provide the client the opportunity to somewhat control the situation. For example, you can locate the driver and make sure they don’t speak with anyone but you. However, be prepared to hire an independent adjuster to procure statements as you don’t want to become a witness later on. The amount of information that can be obtained following an accident is vast, so beginning the process as early as possible is key to best defend your client.

B.    Evidence Collection and Preservation

The trucking industry is highly regulated, and plaintiff’s attorneys love to try and use that to their advantage. Issues to be considered by both in-house counsel and retained counsel in document retention and litigation holds. Again, the following an accident the amount of potentially relevant material can be vast, but reasonable precautions need to be taken to ensure it is all preserved. Defendants generally have a duty to preserve at the time of the accident, as courts have routinely found a defendant is put on notice when a serious accident occurs. Both counsel and client need to have a correct understanding of the client’s preservation measures to avoid claims of spoliation. Litigation holds and notices should go to all internal persons with access to possibly relevant information or materials with reminders periodically.

C.    Spoliation

Spoliation occurs when evidence is altered, stolen or has become otherwise unavailable. A party moving for spoliation related sanctions must affirmatively establish that the missing evidence actually existed, not just allege it is missing. Often, the effects of spoliation cannot be reversed or remedied by the use of alternate evidence. See Ogin v. Ahmed, 563 F.Supp.2d 539 (M.D. Penn. 2008) (Court orders an adverse inference instruction pertaining to the defendants’ destruction of actual driver’s logs required by the FMCSR. Additionally, the court found Qualcomm messages that contained a recap of the driver’s logs were not sufficient to constitute production of the actual driver’s logs).

Given the unique obstacles that arise when a party is deprived of evidence, Courts have had to decide what

remedies are warranted in order to compensate the aggrieved party. Even if a party has a duty to preserve evidence, imposing sanctions for spoliation is not necessarily warranted unless the unavailable evidence was crucial to the underlying cause of action. Unavailable evidence can be deemed “crucial” to a case in one of two ways. First, the evidence can be crucial if the plaintiff cannot sustain his burden of proof without it. Second, the evidence can also be crucial in establishing a defense. Generally, if the absence of the evidence severely prejudices either or both parties, the evidence will likely be deemed crucial to the case or at least important enough to justify imposing sanctions for spoliation. The Court has wide discretion in imposing spoliation sanctions, but they can include adverse instructions, exclusion of evidence and/or expert, monetary fine, or in extreme cases summary judgment.

II.           Litigation concerns

Once you reach litigation and are preparing for trial you cannot change the facts.  However, there are certain strategies you can adopt to avoid a verdict spinning out of control.

A.   Discovery

At the discovery stage, keeping in mind what jurisdiction you are in is critical.  Does this judge entertain motions to compel?  Are discovery-related motions in limine permitted?  Checking the local rules can save you and your client time and money.  Furthermore, be weary of the Reptile theory in use even at the early stages of litigation.  For example, the complaint may contain allegations of violations of safety rules, unnecessarily endangering the public, or violations of a “duty to keep the public safe.”  Determine if it is worthwhile to pursue striking these allegations early.  If your client is issued requests for admission, use the applicable standard of care in the response.  For example: “Defendant admits that it used reasonable care and that degree of care than ordinarily careful person would use under the same circumstances by….”  Finally, is there a self-critical analysis or similar privilege that shields internal investigations from discovery?  In Ohio, no.  If it is a routine review done in the normal course of business, it will not be protected.

B.    Expert Witnesses

“Stealth” traumatic brain injuries (“TBIs”) are become more prevalent.  Stealth TBIs often have subtle or no symptoms and arise in non-catastrophic accidents, slip-and-falls, and other seemingly minor incidents.  One key to defending against these claims is to find an expert witness to determine a differential diagnosis.  Meaning, if it is not a TBI, what is the other diagnosis that could be causing these symptoms?  Taking the time to explore this possibility is worth it.

C.    Settlement options

Again, knowing your jurisdiction here is crucial.  What is the chance we see a nuclear verdict?  If there is a court-ordered settlement conference – who is presiding over the mediation?  If it is known in that jurisdiction that courts/magistrates/judges do not have a high settlement success rate, it may not be worth your time to participate.  However, if settlement is a possibility, it may be worth the time and expense to hire a private mediator.

D.   Trial Considerations

In voir dire, pay attention for Reptile questions. Are you permitted to object to these?  If the judge allows them, consider asking your own counter-Reptile questions.  For example, “[w]ould you all agree that every driver has a duty to drive safely while it is raining?”  In some jurisdictions, COVID has changed how we present witnesses.  Are you playing a video-taped depositions for the jury or is it a live witness?  If it is one of your key expert witnesses, you may consider absorbing the additional cost for them to appear live.  The jury will likely pay closer attention to a live witness versus a video recording.

 III.          Workers’ Compensation Concerns

Understandably, workers’ compensation often takes a back seat to companion civil lawsuits.  With limitations on compensation rates and the types of benefits permitted – notably, no pain and suffering – the potential exposures in civil court often take the right of way.  However, it is important to be aware of your surroundings at all times.

A.   Keep Workers’ Compensation in the Loop

In any accident where other people are hurt, there is a high likelihood that your employee could alleged injuries and file a claim.  These could be legitimate, fraudulent, or even just overstated injuries. That is why it is important to conduct a thorough investigation, not only in anticipation of a civil suit, but to preserve evidence and identify issues that could be relevant to your employee’s workers’ compensation claim.  Even if a claim has not been filed, ensure that your workers’ compensation attorney is provided with any photos of the accident, police reports, and statements by anyone involved in, or who witnessed, the accident.  By obtaining a statement early, we can hold the employee to their original account, and use those statements and other evidence to impeach any attempts to change their story to anyone from the judge to your examining doctor.

Also remember to provide the results of any drug or alcohol tests conducted following the accident.  Most states have some version of a reduction of benefits for safety violations, which can become significant leverage when coupled with your workers’ compensation lien.  For example, if reduction of benefits is proved, the amount left to be recovered by the employee could be less than the medical or temporary total disability benefits paid on the claim.  In that case, the employee will need to seriously consider accepting a lower settlement offer or risk walking away with nothing.

B.    Denying Negligence in a Civil Suit Could Undermine a Safety Violation Argument in Workers’ Compensation Claim

Speaking of safety violations, be mindful that denying your employee’s negligence in a civil suit filed by another party could undermine your claim to a safety violation argument in workers’ compensation.  In other words, it could be difficult to argue in civil court that your driver was not negligent when you simultaneously wish to argue that they were drunk or high in their workers’ compensation claim.  Again, the higher risk of exposure in civil claims will most likely favor abandoning the safety violation argument in workers’ compensation, but a thorough analysis of the issue is still worthwhile.

C.    What Impact Might a Pending Workers’ Compensation Have on Your Ability to Settle Claims

It is extremely important to be aware of any third-party claims filed by your employees, and to know your rights to recover any, or all, of the settlement proceeds from that claim.  To be safe, it is best to send a letter claiming your subrogation lien as soon as you become aware of the third-party claim.  This is true even if your employee has not asserted a workers’ compensation claim.

Furthermore, it is likewise important to know the rights of other employers/insurers to recover benefits paid for civil claims against your employee and company, and what effect that could have on your ability to settle your employee’s workers’ compensation claim.  If there is a significant dispute regarding the value of a claim, and the amount of your settlement offer in the civil suit is less than, or even close to the amount of, the subrogation lien of the other driver’s employer/insurer, it may not make for them to settle the workers’ compensation claim.  Rather, they may spin the wheel on trying the case.

IV.         Conclusion

The road ahead is never completely clear.  Sometimes the obstructions are greater than at other times.  However, knowing the route in advance can allow you to reduce the risks of casualty, particularly catastrophic casualty.  While it is crucial to have claims personnel who know how to identify the potholes, and in-house counsel to serve as your GPS, it is just as important to have outside counsel to serve as your personal guide on the highways and byways to which they are more accustomed and take the wheel when the road gets most treacherous. For over 40 years, ALFA International has been that guide for our clients around the world; and the future leaders of ALFA, trained by the best in the profession, are already taking over with two hands on the wheel to protect our clients’ interest for the next 40 years.