6 Onstream The best practices insurer has elevated the concept of subrogation. Rather than an afterthought, leaving it to generalists, or perhaps the last box to tick on the familiar claims checklist, the best practices insurer requires that a cost-effective, but comprehensive, subrogation analysis be initiated upon notice of all losses above a defined threshold value. While an experienced adjuster may spot an avenue of subrogation recovery, in truth, he or she already has a multitude of responsibilities and is not a specialist in this area. Legal nuances, such as spoliation of evidence, admissibility of forensic techniques etc., as well as the trend of more sophisticated and aggressive adverse counsel, suggest dedicated recovery counsel may be best-equipped to advance an insurer’s subrogation interests. Competent and experienced subrogation counsel, especially for large losses, work very closely with the adjuster, the insured, and the insurer(s) to ensure all potential avenues of recovery are methodically explored, evidence is preserved, potentially responsible parties are placed on notice etc., whilst also ensuring that the insured’s repair efforts continue as quickly as possible. What a subrogation best practices program does and why; or, ‘How does this thing really work?’ So what would have happened if you had a subrogation best practices program in place at the outset of the claim? How does the subrogation process develop differently than with ‘business as usual?’ With a best practices insurer, subrogation counsel is frequently notified within 24 – 48 hours of notice to the insurer. Always keeping in mind that teamwork between the adjustment team, the insurer(s) and counsel are critical to a positive and on-going relationship with the insured, experienced subrogation counsel will then: Communicate with the adjuster It all begins with open and honest dialogue with the adjuster. Experienced adjusters likely have a history with the insured and the insurer(s) and are invaluable in many ways. Counsel should learn all that is possible about the loss and the insured and empower the adjuster, who may already be on site, to make inquiries relevant to potential subrogation recovery – not just opinions from the insured’s risk manager, but the initial gathering of critical paper and electronic documents, photographs, social media and potential witness recollections (albeit informally). If there is a reasonable potential for recovery, counsel should increase their presence on the file and, with the continuing assistance of the adjuster, begin direct communications with the risk manager. Communicate with the insured Whether to the risk manager or a senior financial employee, explaining the necessity of a subrogation evaluation and its potential benefits to the insured will establish a foundation for future interactions. Working with the adjuster to determine if this option is viable, or may be better addressed at a later stage, is an example of the sensitivity and sophistication counsel must exhibit early in the investigation. The dialogue should continue with operations staff or mid-low level employees who likely have the most immediate knowledge of the causes of the loss, at the appropriate time. After the initial discussions with the adjuster and insured, assuming there is a realistic avenue for recovery, the recovery lawyer should then consider contacting an expert. Counsel should then consider hiring an expert Assuming there is subrogation potential, it is important to ensure that qualified experts are promptly retained to assist in the investigation of a loss. Competent experts are ones who have past experience in litigation, know what to look for within their area of expertise, acknowledge when experts in other fields are needed in order to complete an investigation and realize that how they communicate their opinions to a judge or jury is often just as important as the substance of those opinions. Conversely, unqualified © 2013 Xchanging