Becoming more involved with and helping manage lawsuits would benefit both the professional standing of risk managers—and their companies, according to an industry expert.

While many risk managers may be intimidated by the legal process, and would prefer leaving the company's lawsuits in the hands of lawyers, they should be looking to apply their risk-management principles when their organization faces the prospect of litigation, says Roger L. Andrews, an attorney and director of risk management for E.D. Bullard Co., headquartered in Cynthiana, Ky.

Andrews, president of the Risk and Insurance Management Society in 2000-2001 and currently chairman of the board for the Spencer Educational Foundation, notes that often risk managers don't have much say in litigation management because their company's lawsuits may be handled by another department. The terms of their insurance contracts also may leave them out of the legal process.

But risk managers should do all they can to assist with lawsuits because their expertise can make a big contribution, Andrews says—and he speaks from experience.

“When I came to Bullard, they would get six or seven injury lawsuits a year,” he says.

And now that an experienced risk manager is on the scene, how many do they see?

“It's now been seven years since we had one,” he says. “I think a lot of it is the fact that word gets around that [plaintiffs] won't get any money.”

The types of cases typically seen by Bullard are product-liability cases; the company, which invented the hard hat and the fire helmet, makes personal protective equipment.

“Most of the litigation I manage now is involving an air-supplied respirator used for painting and sandblasting,” Andrews says.

3 Litigation-Management Models

Andrews has developed three models for overseeing litigation: the legal model, the insurance-company model and the risk-management model.

“The one that's truly the most effective is the risk-management model,” he says. “This is because risk managers know the company better, know the products better and are more apt to reach out initially for some kind of alternative to litigation.”

Risk management, he explains, is a process—and lawsuits are best managed in accordance with the steps in that process.

“Managing means, from the time you are alerted to a potential claim, implementing the steps” that all good risk managers take when handling any risk, he says.

Those steps are to:

Identify the risk
Assess what the costs could be, including damage to the company's reputation
Come up with solutions
Implement those solutions
Evaluate their effectiveness

The most-important step of all when it comes to litigation management, Andrews says, is to get involved: consider litigation as part of the risk-management process and “don't be intimidated by the attorneys or the adjusters.”

Overcoming The Intimidation Factor

Why are risk managers so hesitant to take more control over the litigation in their company?

They may see the attorney as the expert and be reluctant to go up against their company's in-house counsel.

As a first step, Andrews advises risk managers to start making it a point to have more contact with their attorneys.

Risk managers also tend to be intimidated by insurance adjusters and their system. But because insurers' operations are leaner now, adjusters are often overtasked in terms of the number of claims they manage.

“It's an opportune time for risk managers to help them out,” Andrews says.

He also advises risk managers to find out the terms of their policy and communicate with the insurer to find out how to best get involved with insurers' attorneys.

“Personally, I try to take a more aggressive role in assigning counsel [from an insurer] who I feel are more familiar with the company and who I can work with in terms of managing the litigation,” he says.

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