This article is a companion piece to this video
Robust investigations are a hallmark of Rathbone Group’s subrogation services. In this episode of On Subrogation: Pre-Suit Investigations, RG partner and subrogation attorney Jason Sullivan offers 3 tip for optimizing your pre-suit investigations and setting the stage for a solid subrogation case that results in maximum recovery.
Best Practices for Pre-Suit Subrogation Investigations
The initial investigation in an insurance claim sets the foundation for later subrogation of said claim. There is no such thing as collecting too much information on an incident, as there is no such thing as gathering too much support for your argument for subrogation recovery.
Subrogation is a niche area of law, and most subrogation claims become complex processes. A proactive, organized, detailed approach at the outset of a loss can make the difference between a viable subrogation claim resulting in complete recovery, or suffering a total loss. There are 3 actions investigators and claims adjustors should take at the outset of a claim:
1. Ask Any Relevant Parties for Information
It’s simple, says Jason: just ask. When politely approached, people are likely to provide any requested information. It is very probable that if you ask the right questions in the right way, people will come forward with helpful information. Speak to anyone who may be relevant to the incident of loss, such as:
- The damaged party
- Witnesses and bystanders
- Neighbors/occupants in neighboring buildings
Consider the fact that everyone has camera and video at-hand on their smartphones. There are a number of ways people may contribute information to your pre-suit investigation. Even a simple case of the background of someone’s selfie can reveal information such as the position of a car moments before an accident occurred.
2. Ask the Government via FOIA
If your subrogation inquiry could benefit from government-compiled reports, just ask the government. Under FOIA (Freedom of Information Act), if a private entity requests information from the government on previous investigations, they are compelled to hand that information over. Consider things like an initial police report from a motor vehicle incident or an investigative report from a fire.
While the government is required to respond and comply with any FOIA/FOIA-like requests, keep two things in mind:
- If your request deals with an ongoing investigation, your request may be rejected if the government feels releasing the information would compromise their investigation.
- While the government is required to respond within a certain amount of time, there is often no requirement for length of time to turn over the records. In other words, you may have to be aggressive (but still polite!) in ensuring the records are handed over in a timely fashion.
FOIA requests often do not require any specific forms; you can send a letter with a specific request, and the government is required to respond and comply.
3. Compel Answers from Uncooperative Parties
A less common but still viable avenue to collecting information during the investigation phase of a subrogation claim is to request pre-suit discovery. Pre-suit discovery can be useful if you are having trouble identifying all liable parties or do not have enough information to fully draft a complaint.
Pre-suit discovery is allowed under Rule 27 of the Federal Rules of Civil Procedure. However, this rule limits use of pre-suit discovery to compel and preserve testimony, and should not be used to fish for information – that will come later during in-suit discovery. Rule 27 is to be used if you know the parties or relevant information exists and want to create a record and preserve evidence/testimony.
As with the vast majority of insurance law, especially in subrogated matters, states deal with this rule differently. Jason offers the example of Texas, which has its own pre-suit discovery statute specifically for identifying all claims and unknown parties.
Pre-suit discovery can compel parties who are otherwise uninvolved in the subrogated claim to turn over evidence. For instance, a shop owner with a surveillance cam or a homeowner with a doorbell cam; if they will not voluntarily hand over footage from the relevant time period, they may be able to be compelled under Federal Rule 27.
Devil’s Advocate: Is a Subrogation Claim the Best Course of Action?
A part of this initial investigation should look into if subrogation is the right idea in the first place. An insurance claim that looks great at intake might turn out a mess that results in even more loss if not properly considered.
The first step in this part of the process is those initial investigation practices we’ve discussed. But there are several additional factors a party should consider before deciding whether to initiate a subrogation action:
- Review the policy to determine coverage, exclusions, and insurer’s right to subrogation.
- Determine the jurisdiction in which to file, considering residence, location of incident, and the nuances of different jurisdictions’ laws on insurance subrogation.
- Identify all potentially liable parties, including any third-party liability that may be present.
- Determine how a negligence claim will be proven.
- Properly quantify all damages, including direct and indirect costs.
- Is there anything to recover? Find out the defendant’s financial status, if they were uninsured or underinsured, and whether they had applicable coverage to pursue.
- Review relevant statutes of limitations for a potential subrogation claim.
- Identify any evidentiary challenges, such as crucial evidence being destroyed or finding out a witness lied.
Subrogation attorneys should always perform a methodical cost-benefit analysis of the potential subrogation process before deciding to make a subrogation demand. For an in-depth discussion on determining subrogation viability, listen to our On Subrogation podcast episode: Know When to Walk Away.
Making the Most of Your Pre-Suit Subrogation Investigation
In summary, shoring up the inquiry phase of a subrogation claim is vital to building a solid case, and an integral component to your approach should be diligence. While we want to start out as personally and casually as possible when interviewing witnesses and requesting information, we need to ensure we exhaust all avenues for our clients.
If you would like to learn more about this and other important subjects in insurance law, subrogation strategy, and other relevant legal topics, visit Rathbone Group’s YouTube channel and podcast library for more episodes of On Subrogation.
Can’t find what you’re looking for? Email us at video@rathbonegroup.com or podcast@rathbonegroup.com to see your question discussed in a future episode.