Loss control plans stand upon twin pillars: insurance protection and risk management. The first is a financial product to defray personal or business losses, the second is a managerial regimen to prevent such losses or reduce their severity. Risk management is the proverbial “stitch in time that saves nine.” Does risk management end at the courthouse steps, or can it continue even after counsel for the parties stand and address the court: “Ready, Your Honor!”
Assume that all the appropriate risk management measures have been put into place, but a loss has occurred, a lawsuit has been filed, and a jury is about to be impaneled. Is the final act of the play that is about to begin in the courtroom predetermined? Not necessarily. What lies ahead is not yet set in stone, or even wet concrete. A lot of things can happen during a trial.
The steps in the risk management process are worded variously depending upon the source, but they include:
- Identifying, analyzing and evaluating (or ranking) known risks;
- Treating (or responding to) them; and
- Monitoring the results.
By the time trial begins, the risk has been identified, analyzed and evaluated by at least two parties duly represented by learned counsel, who have reached opposite conclusions about the risks of having 6 or 12 good citizens, sworn and true, decide their dispute for them. By the time a trial begins, it may seem that there is nothing left to manage about the risk — just wind up the lawyers, judge and witnesses, and enjoy the show. But not really.
Managing risks at trial
Risk managers are often present during high-stakes civil trials. They might be from corporate counsel’s office, outside counsel acting in a monitoring or coverage role, insurance claims professionals, or someone else who is well versed about the case and can provide an independent report on the day’s events.
I have been in trials in which the claims representatives outnumbered the jurors — a silent audience of anonymous note writers, intently scrutinizing each raised judicial eyebrow, each juror’s yawn, each witness’ jitters. Often they’re at the trial to assist an insurer in making its decision about whether to let the case go to the jury or “pull the plug” by accepting the last settlement demand — assuming the start of the trial has not changed the plaintiff’s mind about accepting that valuation. There are other invisible stakeholders in a trial’s outcome who want an independent answer to a three-word question, “How’s it going?”
As one who has tried, settled, mediated, won, lost and monitored cases, I believe the trial-monitor’s prime directive is the same as the Hippocratic oath’s first principle: “First, do no harm.” Put another way, please don’t make trial counsel’s job harder than it already is. Defense counsel has prepared witnesses, written motions to be heard during trial, and done a thousand other things to steer the case toward the best result. The risk manager is there to observe, report and recommend, not to tinker with defense counsel’s plan.
The earlier reference to a trial as a play is not far from the truth. Defense counsel has carefully scripted how the drama will unfold. After the curtain has risen isn’t the time to tug at Shakespeare’s puffy shirt to suggest that he take Hamlet out of the play and replace him with Romeo.
During trial, lead counsel acts more like a jet fighter pilot than an author. Counsel must make split-second decisions: whether to drop a witness from the list, cross examine, or object to questions, and when to sit calmly or react with dismay when opposing counsel rants.
U.S. Air Force Colonel John Boyd coined the term “O.O.D.A. Loop” to teach new pilots how to react fast. An O.O.D.A. Loop is not a sugary breakfast cereal. It’s an acronym for “observe, orient, decide and act,” — four steps that take place in the blink of an eye between the onset of a stimulus and the onset of acting on that stimulus. During an air battle pilots must observe events that move as fast as their aircraft. They must orient themselves to give attention to the event, then decide on a response and act on it. Once the decision is made, the debate is over. There is no time for regret and there are no mulligans. It is a “loop” because immediately after taking action the pilot begins again by observing.
While observing a trial, I may disagree with a dozen split-second decisions defense counsel makes on a given day, but that makes none of them wrong or me right. However, as noted, I’m not there as a movie critic.
More than a watcher
That said, the risk manager at trial should be more than a mere “trial watcher.” The risk manager’s role is to closely gauge how the jurors react to the evidence, the witnesses, the opening statements and closing arguments of counsel, and the judge’s instructions on the law. These factors are weather vanes, indicating the way the wind is blowing. The next step is to report not only what has been observed but also any inklings the observer has developed about the trial’s trajectory.
Though a risk manager mustn’t interfere, there must be private daily communication between defense counsel and the stakeholder’s trial monitor, out of sight and hearing of jurors, court personnel or witnesses. It’s a good idea to ask defense counsel before trial begins to set aside a few minutes to talk before trial begins or, preferably, soon after the trial day ends. In those conversations, my role is to ask, “How do you think it went today?” If I have developed a good working relationship with defense counsel he or she may follow up with, “And what’s your opinion?”
The trial monitor can also be the messenger who notifies the stakeholder that help is needed. Companies and insurers can provide many resources to aid trial counsel in steering the case, from permitting the defense firm to involve a second paralegal to assist with exhibits or another attorney to help prepare witnesses to testify. Perhaps trial counsel needs to quickly file a motion that becomes necessary during or after trial to preserve appellate rights, and an example is available in another case. The stakeholder might need to parachute-in a trial technologist to fix or replace an uncooperative computer that keeps freezing when prerecorded witness’ testimony is being played back. The discussions with defense counsel about such subjects should be along the line of, “Tell me if there’s anything you need,” not, “Here’s what you need.”
In this regard, it’s good to keep in mind that trial budgets are only estimates, not guarantees. “For the want of a nail…” – a cautionary saying goes about the king who was unseated from his horse during a battle because of a loose horseshoe.
When bad tidings are good to hear
There are times when the trial observer has to deliver bad news.
Two examples come to mind. The first was a case with an eight-figure exposure, though there are a lot of numbers between $10,000,000 and $99,999,999. My view of the evidence was less optimistic than others’ and the case ultimately settled in the area I thought it might. That’s not due to any unique predictive ability — it was simply having someone articulate a worst-realistic-case scenario. I would have been happy to be wrong, but hearing the downside led to a better informed decision.
The second case was smaller but still large: a bus accident case in which the injured pedestrian suffered a horrific death. The case was evaluated as having a $2.5 million value. For various reasons I pegged it at $4.5 to $6 million. The jury came in at $4.6 million, as I recall. Not good news for the insurer, certainly, but they were prepared to deal with a number in that range based upon input from the second set of eyes, or, in my case, a third eye.
A risk manager at trial plays an important role that defense counsel cannot fill, that of an objective observer. The risk manager may not always affect the outcome of the case, but the input can often help manage expectations, if nothing else.
Louie Castoria (email@example.com ) is the co-chair of the Professional Liability Practice Group at Kaufman Dolowich & Voluck LLP, a national law firm, and a mediator. He is a member of the Board of Directors of the Professional Liability Defense Federation, and chairman emeritus of the Insurance Educational Association. This article does not provide legal advice. The views expressed are the author’s and not necessarily the firm’s or its clients’.