March 2013 7 Given the opportunity to view a largely undisturbed loss site, a potentially responsible party will have a difficult time successfully asserting a spoliation of evidence defence in subsequent litigation. – experts can miss key pieces of evidence, often assume their range of expertise is greater than it really is and even if they have firm opinions, may be incapable of communicating them clearly and coherently. It makes a great deal of sense for legal counsel to select the expert(s) for the insurer. Experienced subrogation attorneys have lists of highly qualified experts in different fields in numerous locations with whom they have worked in the past. Because of the attorney’s continuing relationship with these experts, the expert who is ultimately selected may ‘go the extra mile’ for the attorney, and rearrange his/her schedule so that the expert can be at the loss site within the shortest time possible. Just as important, many common law jurisdictions permit the expert’s communications to be privileged, so long as they were initially contacted by counsel. Preserve the loss site There is nothing more fatal to a subrogation action than a loss site not properly preserved. Without proper securement of the scene, investigators and experts will be unable to reach conclusions based on a view of the site as it existed at the time of the loss, or shortly afterwards, and important evidence may be lost or destroyed. This will severely hamper, if not outright defeat, a subrogation action. Place potentially responsible parties on notice. In order to avoid any spoliation of evidence problems, any party which may be responsible for the loss should be placed on notice, and be given a reasonable opportunity to inspect the loss site. This is a critical step. Oversee loss scene and artifact inspections by potentially responsible parties A potentially responsible party will likely want an opportunity for its representatives, experts, and/or attorneys to inspect the loss site. Given the opportunity to view a largely undisturbed loss site, a potentially responsible party will have a difficult time successfully asserting a spoliation of evidence defence in subsequent litigation. Off-site destructive testing of evidentiary artifacts can take place without the insurer being concerned that such activities will impair the possibility of recovery or impede the repair process. If subsequent ‘joint’ testing of certain key evidence is required, the attorney can (with the assistance of an expert) continue exercising control over the investigative process by directing the creation of testing protocols by experts. Do not hesitate to close subrogation A best practices program will have as one of its core principles the need to close files that do not have potential. Experienced counsel will ensure that only those files that are worth the investment of expert costs continue to be investigated, likely as soon as a fatal fact or unavoidable contractual term is discovered. In the longer term, experienced subrogation counsel can address many of the developments typical to the large loss scenario described above. The foundation set by the diligent and efficient early investigation is built upon at this stage. Once there is legitimate recovery potential, and sometimes in conjunction with technical experts, recovery counsel can: • Enter into a Common Interest Privilege/ Confidentiality/Limited License Agreement with the insured; in many jurisdictions this will cloak the investigation and communications with the insured © 2013 Xchanging