Since a negotiated settlement provides greater benefits to the client, DRM relies on negotiation rather than litigation to settle large insurance claims. While litigation may be necessary in some cases, it is slower, more costly, and less effective than a negotiated settlement.
Although we do not act as legal counsel, we are sensitive to the concerns of litigators and will cooperate and provide protective agreements and take other precautions where appropriate. In some cases a lawsuit may be advisable for some specific purposes, but the litigation usually can be held in abeyance or maintained at a low level of activity while the DRM process is underway.
Settling complex insurance claims through negotiation rather than litigation provides these benefits to the client:
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Lower Cost of Recovery. Large insurance claim litigation often costs several million dollars in outside counsel fees, regardless of the outcome. Internal costs may also be significant. The DRM process holds the cost of recovery to a reasonable fixed percentage of the settlement while minimizing demands on internal resources. |
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Faster Recovery. DRM's settlement process can often be completed in eighteen to twenty-four months. On the other hand, Litigation to conclusion typically delays the actual receipt of funds from four to six years, or even longer. Even if a litigated claim is eventually settled, it may be three to four years after the litigation begins. DRM's time savings result in a significant advantage because of the time value of money. Also, DRM promotes the fair transfer of information with insurers necessary to justify settlement. For example, we frequently encourage the early exchange of information that litigators may initially withhold. This sharing of information can speed up the settlement process. |
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Less Risk. When litigation is used to resolve a claim, there is a substantial risk that the insured will not recover anything. Insurers assert numerous coverage defenses and, if a court sustains even a single one of these defenses, the entire claim can be lost. Even when courts have issued decisions favorable to an insured, only one of the many defense issues may have been resolved, thus leaving the insurers with several more opportunities to prevail. The DRM process negotiates the claim in a reasonable manner and applies fair discounts for coverage defenses to eliminate the risk of total loss. |
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Maintain Insurer Relations. Most companies have on-going business relationships with their insurers. Rather than risking damage to that relationship with litigation, our process maintains a positive working relationship. |
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Fewer Internal Costs. Litigation drains internal resources. Depositions, document productions, consultation time, and trial testimony all involve significant internal cost. The DRM process is designed to provide an approach to information gathering and transfer that minimizes the demand on corporate employees. Distraction and diversion of internal resources can be held to the lowest possible level. |
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Confidentiality. Unlike litigation, DRM's methodology preserves confidentiality and privilege of all information that is discovered and developed for the claim. All information is tagged as confidential and is subject to the confidentiality and privilege clause of the settlement agreement; it is not released into public court records. |