adjuster disagrees with the standards, then you can establish that the company is not playing by the rules. This can be done later through your claims-handling expert. Most importantly, the jury gets to hear the special rules that apply to insurance com- panies early in the case, so that they can evaluate the conduct of the company with those standards in mind throughout the trial. Ultimately, these claims-handling standards should also become jury instruc- tions at the end of the case.
Preparing your claims-handling expert to testify A claims-handling expert should ful-
fill two roles in a bad-faith trial. The first is to give the jury a tutorial overview of the implied covenant of good faith and fair dealing. The second is to summarize all of the acts of bad faith conduct in your case along with supporting facts. When discussing the implied
covenant of good faith and fair dealing in general, the expert should explain the history of insurance bad faith and why we have it. This will in many ways echo what you will have already covered during voir dire about the purpose of insurance to provide peace of mind as discussed above. The expert should explain that the rea- son we hold insurance companies to such high standards is due to the uniqueness of insurance itself; concepts which you will already have introduced throughout the trial. Along with explaining the pur- pose of insurance bad faith, your expert should discuss the industry standards that apply to your case. These will be the same standards that you will have covered dur- ing your cross-examination of the claims adjuster(s) and supervisors. Once you have given the jury a tuto-
rial on insurance bad faith, turn to the specific claims-handling in your case. The key to properly putting on claims- handling expert-witness testimony in this regard is preparation, which starts during the discovery process. Obviously, you will need to obtain the entire claim file, but it is also important to obtain the claims- handling manual for the company. This information should be given to your expert as early as possible, along with the
deposition testimony you obtain during discovery. Once the information is reviewed by
your expert, spend time discussing his or her findings and conclusions and the facts that support them. Give your expert the benefit of your thinking concerning the claims handling as well. Between a thorough review of the discovery by both a qualified expert and you, all bad-faith claims-handling issues should be exposed. Whenever possible, give your expert daily transcripts of the relevant testimony that you obtain during trial. Once all of the issues have been
identified, organize them in a concise, summarized fashion so that you can pres- ent them to the jury in a user-friendly manner. This means connecting the facts that show the bad-faith conduct of the company to the violations of industry standards. Remember, by the time the jury hears from your expert, they will already have seen the key documents, heard from the witnesses, and have proba- bly begun to form their own impressions of the claims handling. The role of your expert is not to go through the entire claim file once again, but rather, to sum- marize all of the acts of bad faith that the file reveals and identifying the industry standards that were violated. Your expert witness’s testimony will be the closing chapter on your case in chief and will give the jury a concise, well-organized summa- ry of the bad-faith liability in your case. This approach to presenting evidence through your expert will also help you when arguing for a finding of bad faith during phase I of the trial.
Arguing bad faith in phase I When arguing for a finding of bad
faith in phase I of the trial, the work that you have done preparing your expert will be very valuable. Unlike the opening statement when you need to cover all the relevant facts, during closing argument you need to summarize the key facts that support a finding of bad faith. Your job during closing argument is to make the decision easy for the jury to reach. The best way to do this is to give the jury a list of every act of bad faith the
company committed. You should argue that any one of the acts listed should com- pel a finding of bad faith. Once you give the jury the overall list, go through each item and show the jury the evidence that you developed during the trial that sup- ports this conclusion. In addition to docu- ments contained in the claim file, this evi- dence will also include trial testimony, so it is always a good idea to order key trial testimony that you want to show the jury during closing argument. This is especial- ly true in longer trials when some of the testimony was heard a month or two before your closing argument. As you go through the list of bad-faith
acts and present the evidence that sup- ports your case, make sure to conclude your discussion of each item with an explanation of how this conduct violated the industry standard. As indicated earlier, the insurance industry standards that you will have covered throughout the trial should be requested as jury instructions. In summary, when arguing for a find-
ing of bad faith, your job is to identify all of the bad faith acts, show the jury the evi- dence that supports you, and then weave that evidence with the industry standards and the law. By giving the jury a well- organized presentation during closing argument, you make the jury’s job easier to find bad faith.
Putting on evidence of financial worth in phase II If you are able to reach a second
phase for punitive damages, the only new evidence that you will need to submit for the jury is evidence of financial condition. Depending upon the company, financial condition can be measured in different ways. The most common method of deter- mining the financial condition of an insur- ance company is the company’s policyhold- er surplus, which is calculated by taking the assets minus liabilities. Another measure might be the profitability of the company. In each case, you should work with your forensic economist to determine the most appropriate measure of financial condition. Make sure that you obtain, or have
your expert obtain, the certified financial statement that the company has filed with
JUNE 2011 The Advocate Magazine — 23
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