Claims Processes: Development and Management

Establishing and managing a sophisticated claims process is instrumental to effective resolution of complex issues involving claims.  In many instances, the claims process mitigates litigation risk while fairly resolving disputes outside the courtroom, where litigation costs and awards often exceed the value of the claim. At Crowell & Moring, we have significant experience helping clients with their claims administration program.  We have developed, implemented and administered numerous claims processes to successfully resolve hundreds of millions of dollars' worth of claims for our clients, which include Fortune 100 multinational corporations. 

Designing a Process to Value and Evaluate Claims 

Crowell & Moring works closely with clients and third parties to develop the necessary elements of a successful claims process. At the outset, claims must be valued, which often requires input from the client, experts, and other third parties. For fixed-fund settlements, part of the valuation process is determining how the funds will be fairly allocated to maximize the number of participating claimants.

In addition to determining how to value claims, we have significant experience developing an appropriate methodology to evaluate each claim. Claims may be evaluated in a myriad of ways depending on the source of the alleged damage. While some claims may require property inspection – either onsite or at a specific location – others may be evaluated via documents, including review of records, photographs, and other relevant information.

Implementing a Claims Process

Our extensive experience implementing claims processes includes:

• Drafting and providing notice to potential claimants and related entities.
• Developing communication materials for use on social media and claims websites.
• Coordinating with public relations and corporate business units to ensure a consistent message and to provide claimants with accurate information about the claims process. 

In many instances, permitting claims to commence or be processed through online claims submission can be an efficient option.

In addition to communications, we understand the variety of documents needed to successfully implement and manage the claims process, including requests for information, documentation of claim deficiencies, and release agreements. As with any legal process, certain ancillary issues must be considered, including insurance and subrogation claims, establishing of effective and fair appeal mechanisms, and ensuring proper communications with represented claimants.

Successfully Administering a Cost-effective Claims Process

We administer claims processes to ensure the mitigation of legal risks and the efficient settlement of claims. This includes ensuring that the settlement is administered according to agreed-upon policies and guidelines and remains cost effective. We work closely with vendors to maintain budgets and, when necessary, to adjust the process to address legal risk and litigation concerns as they develop.

Representative Matters

• Herbicide Product Litigation and Claims Process. Crowell & Moring assisted a Fortune 100 company in responding to allegations that its herbicide resulted in damage, including analysis of difficult challenges and decisions involving product withdrawal, selection of independent consultants and experts, defense of litigation, and implementation of a complex claims resolution system. In the early phases, we coordinated the causation and investigative work and implemented the process that continues today to resolve successfully thousands of claims. Those efforts bore fruit on the litigation front as well – together with co-counsel, Crowell & Moring obtained an early settlement and final approval in June 2014 of the Imprelis® MDL in the Eastern District of Pennsylvania. That approval was based in part on the claims process already in use, which had eliminated the value of litigation by removing from the class over 30,000 property owners. Crowell & Moring and co-counsel counseled the company, a team of experts, and consulting firm in creating the system by which the claims were valued and resolved, including the creation of release agreements and other documents. Creative strategy minimized the litigation risk and provided the company’s customers a fair resolution.
• Gulf Coast Refinery Work. Working with a real estate appraisal firm, we assisted with a property buy-out plan to create a green space between the refinery and neighboring residents. The purchase of homes resolved class action claims for property devaluation allegedly caused by ground water contamination and air emissions. We have also defended claims alleging community exposures to chemicals as a result of refinery explosion releasing hydrofluoric acid. The defense team tried a series of bellwether cases to defense verdicts and settled the remaining cases. In settling the cases, a fund was administered to over 10,000 people to settle personal injury and property damage claims. A claims administrator allocated the funds based on a predetermined formula after extensive negotiations with plaintiffs' counsel.
• Hazardous Materials Site Litigation. Together with Louisville co-counsel, we defended thousands of claims brought by workers and neighbors at a Superfund site in southeastern Kentucky over the course of 17 years. After a month-long jury trial, the team won a defense verdict against three coal mining companies that sought $140 million in lost profits as a result of their proximity to the site. The National Law Journal recognized the victory in its annual list of the country’s top defense verdicts. The next year, the team defended bellwether plaintiff claims of multiple myeloma, childhood leukemia, and other illnesses in a 52-day jury trial that led to a mass settlement of more than 550 plaintiffs' cases. Later, they won a week-long arbitration of a tort of outrageous conduct action, achieved decertification of a state court class action, and, in another bellwether plaintiff case, won summary judgment after excluding all of the causation experts under Daubert. In addition to successfully litigating claims, the team also assisted in settling claims, which included setting up a process to allocate a settlement fund. Under this process, pre-determined criteria were used to create a matrix to value claims. The criteria selected ensured that settlement funds were appropriately allocated.
• Fungicide Litigation and Claims. Crowell & Moring handled a 10-year birth defect litigation involving allegations of serious eye defects and other conditions from use of a home fungicide product. We litigated multinational (England, Wales, Scotland, New Zealand) cases through full discovery and ultimately prevailed on Daubert motions in two courts. In addition to successfully handling the birth defect litigation, Crowell & Moring helped develop a settlement claims process to resolve blocks of cases in the related crop litigation. Crowell & Moring valued the crop litigation claims based on a pre-determined matrix of damage categories.
• Plumbing Litigation. We represent a Fortune 100 chemical company in national litigation attacking plumbing products. The litigation spans over 20 years in both state and federal courts and at all appellate levels, including the U.S. Supreme Court, and in the lower and appellate courts of Canada and the U.S. Virgin Islands. These cases include multi-plaintiff actions, as well as attempted national, statewide, and province-wide class actions. We provide national strategy, class action strategy, coordination of all discovery (including the management and production of over two million documents) and management of a network of local firms. We defeated class certification in two attempted national class actions and obtained full faith and credit in a statewide collateral attack on the company’s earlier national class settlement, which was upheld on appeal. A claims process was developed early on before class actions were brought, which resulted in the settlement of hundreds of thousands of claims. The claims process would evaluate each claim and, if it met the criteria, offer retrofitting and/or compensation. After a national class action settlement in the United States, we coordinated the administration of a national class settlement claims facility. After a national and two province-wide settlements in Canada, we coordinated the administration of the Canadian settlement claims facility.