COVID-19 Insurance Coverage Update

In a prior post, I predicted that “if history is any guide, policyholders may win most of the coverage cases” for COVID-19 related claims. I stated that my “prediction is based on the insurance industry’s experience in litigating various policy issues for environmental claims coverage 30 years ago.”

Apparently, I was prescient in my likening the COVID coverage claims wars to the environmental coverage claims wars. For in reading news accounts, it appears that policyholder coverage attorneys are doing their best to link COIV-19 claims to environmental claims by likening COVID-19 clean-up or property damage claims to pollution clean-up or property damage claims or COVID-19 exposure claims to exposures to asbestos fibers or exposure to toxic vapors or fumes.

Another big tie in with the environmental coverage wars is how policyholder attorneys are taking on insurers. I am noticing that they are taking a page out of their environmental coverage claims wars playbook and are zeroing in first on smaller insurers. I know this is occurring as I am seeing TV ads trolling for claimants who have policies with specific insurers who are mostly smaller insurers.

Taking on smaller insurers first is a pretty smart tactic on the part of policyholder attorneys. This is because smaller insurers as a general rule tend to stick with their local coverage attorneys.  They rarely hire the sophisticated BIG law firm coverage attorneys that the larger insurance companies hire.

The basic idea in taking on the smaller insurers first is that they will not be able to mount a formidable defense. If so, it would be easier to establish some favorable case law and gain some momentum in the COVID -19 coverage claims wars. Also, you may be able to get some easy settlement money to fund coverage cases with larger insurers.

As noted, taking on smaller insurers first was exactly the tactic that policyholder attorneys in large firms employed in the insurance coverage wars. To respond to this, insurers in larger companies formed the Insurance Environmental Litigation Association (IELA) and I was its Treasurer. One of our primary purposes was to intervene in coverage cases – especially those involving smaller insurers whose attorneys were simply overmatched by the policyholder attorneys at large law firms.

I think it unlikely that BIG insurers will once again form a group like the IELA to intervene in COVID-19 coverage cases involving smaller insurers and their overmatched coverage counsel. For one thing, there may  not be enough time to do so. I sense that the COVID-19 coverage claims wars will proceed to conclusion much faster than the environmental coverage claims wars.

Because of the high stakes involved in the COVID-19 coverage wars, it is incumbent on policyholders and insurers – and especially smaller insurers – to heed the advice I gave in my prior post. Make sure you hire competent coverage counsel who are in large regional or national firms. I know that what I am advising you to do is a more expensive course of action, but believe me if you do not hire the right coverage counsel and the other side does, you likely will wind up losing your own COVID-19 coverage claim war.

Whether a $1,000 an Hour for a Lawyer is Reasonable Depends on Whether You Need a Cadillac Escalade or a Honda Civic

“[T]he Court’s review of Sheppard Mullin’s bills suggests that the Beastie Boys opted to pay for, and received, the Cadillac Escalade, not the Honda Civic.” Beastie Boys v. Monster Energy Co., 112 F. Supp. 3d 31  (Dist. Court, SD New York 2015).

A D.C. lawyer recently asked me if I thought $1,000 an hour for a lawyer was reasonable. Being a lawyer myself, I gave him a lawyerly answer that “it depends.”

I’ve written posts before in this blog about $1,000 and even $2,000 an hour lawyers.  As I stated in one of those prior posts, an “expert” who consults on litigation management issues with corporations (who are the ones who mainly hire the $1,000 and $2,000 an hour lawyers) told me that lower rates are actually viewed as a negative by large corporations. Apparently very good $500 an hour lawyers are not looked at in the same favorable way that mediocre $1,000 lawyers are simply based upon their hourly billing rates. Continue reading

Why Insureds May Win COVID-19 Claims Coverage Cases.

Media reports are that many businesses and non-profits are looking to their insurers for “business interruption” and other coverages due to the COVID-19 pandemic. At first blush, it would appear that these claims for coverage face an uphill battle based upon what might be termed clear policy language (specially manuscripted policies notwithstanding).

But it would be premature for the insurance industry to declare victory on the coverage issues. For if history is any guide, policyholders may win most of the coverage cases.

Mr prediction is based on the insurance industry’s experience in litigating various policy issues for environmental claims coverage 30 years ago. As a former Director of Environmental Claim for two insurers during the environmental claims coverage wars, I witnessed first hand how clear and otherwise unambiguous policy language did not save the insurance industry by and large from having to provide coverage for environmental claims and their massive clean-up costs. Continue reading

It’s Deja Vu All Over Again As COVID-19 Presents Law Firms With Same Financial Issues Faced During The Great Recession

With almost daily report of law firm layoffs and/or reductions in compensation, it looks like the COVIS-19 pandemic is going to have the same effect on the financial health of the legal industry as did the Great Recession in 2007-2009.  And if what happened in the Great Recession is any indicator, law firm clients will need to scrutinize more closely their legal bills.

One reason for closer scrutiny is because of what happened in the Great Recession with regards to staffing cuts. In the Great Recession, the support staff rather than attorneys bore the brunt of law firm cutbacks. This was because law firms were reluctant to let go of the attorney talent they worked so hard to attract and invested so much to develop. So the only other place to turn for savings in a labor intensive business is to support staff.

As I have blogged about before, cutting back support staff and increasing the ratio of attorneys to support staff will save law firms money. But, it also almost invariably means increased costs for law firm clients. Continue reading

How To Discuss Fee Bill Issues With Your Lawyer – Part IV: The Nuclear Option

[This is the fourth and final post in a series of posts on how to discuss and resolve fee bill disputes with your lawyer. If you have not done so already, it is a good idea to read the first three posts in this series.]

Invariably, whenever I write a post about a lawyer getting disciplined for an ethics violation involving fee billing, I will get emails. Mostly from individuals with comments or questions about lawyer discipline. And so it was that after my post about an lawyer who got a six month suspension for overbilling, I received emails from individuals with questions on the disciplinary process for lawyers.

Some of the most frequent questions I am asked are how to go about filing a complaint (and if a lawyer is needed to file the complaint), will the disciplinary agency get my money back or get my lawyer to answer my questions (or do whatever it is they want the lawyer to do), and can my lawyer retaliate against me (or file a suit against me for slander) if my complaint is dismissed? So with this the fourth and final post in this series, I would like to answer these questions and share the basics of filing a disciplinary complaint against a lawyer. Continue reading

How To Discuss Fee Bill Issues With Your Lawyer – Part III

[This is the third post in a series on how to discuss fee bill disputes with your lawyer. If you have not done so already, it is a good idea to read the first two posts in this series as they detail steps that should be taken before getting to the point where the additional steps outlined in the post should be considered.]

In my last post in this series, I ended with the assumption that communications with your lawyer and/or the firm’s managing partner or other partners in the firm failed to resolve the billing issues.  In this post I will discuss what additional steps may be taken to resolve the billing issues once direct communication has not worked or has broken down. Continue reading

Overbilling Lawyer Gets Support From Her Overbilled Clients

Making the rounds of legal publications last month was a story about an attorney in MA who was suspended for 6 months for overbilling her clients by 450 hours. According to the facts set out in IN RE: DOREEN ZANKOWSKI , the attorney claimed to have worked an incredible 3,893 hours in one year. This included 3,173 billable and 720 non-billable hours.

And according the Opinion, in addition to inflating her own hours, the time billed to clients by associates who worked under her was also inflated. However, there was no word in the Opinion as to what was done with the associates who were aware that their time was being inflated.

In reading the unusually long 42 page Opinion, something strange caught my eye. Continue reading

Googling To Find Out If Your Attorney Uses Form Documents

In a prior blog post entitled “The ‘Does Anyone Have A Form That I Could Use’ Practice Section,” I poked gentle fun at a state bar practice section I belong to because most of the posts on the section listserve were from attorneys asking other attorneys if anyone had a particular form document that the inquiring attorney could use. Due to the volume of such requests, I had found it both amusing as well as telling that an awful lot of what attorneys do in most any practice area has to do with using forms.

And it seems that you no longer have to ask a fellow attorney for a form. You can just Google the name of a Motion or other type of legal document and you often will find a form. I have done this countless number times when reviewing legal bills from attorneys throughout the U.S.

Recently I had occasion to look up a Notice of Motion and Motion to Compel Testimony and Production of Documents in California. I suspected that the document the attorney billed 2 hours to prepare was a form document. So I Googled it, and sure enough I was taken to a form document. This form document not only had the basic form Notice and Motion, but it also had the argument for the attorney to use in support of the Motion including the supporting case authority. Comparing the attorney’s Motion with the form Motion, I could see that 90% of what was in the attorney’s Motion was in the form Motion. And the 10% the attorney had added did not take 2 hours. Continue reading

E-billing “Rules Engines:” They Work All of the Time Some of the Time

I’m going to write about something that many attorneys whose clients require them to submit their legal bills through e-billing programs already know. E-billing rules engines supposedly programmed to automatically spot and take deductions in legal invoices for violations of a company’s billing guidelines often do not work as advertised.

And when I say e-billing rules engines do not often work “as advertised,” I am talking about how e-billing companies promote the use of their rules engines.  As one e-billing company puts it on their website, “[Name of rules engine] automatically reviews, validates, flags, and adjusts line-item invoice charges to comply with billing guidelines.”

Wow! No human involvement needed. Just push a few buttons and sit back and reap the savings. Sounds incredible doesn’t it? Continue reading