SOURCE: Marks Paneth & Shron LLP

Marks Paneth & Shron LLP

March 09, 2011 10:51 ET

Savvy Insurers Take an Extra Step Before Deciding to Settle, Defend or Dispute a Claim or Pursue a Fraud: They Improve Their Odds by Adding Expert Knowledge of Economics and Forensics to the Case Preparation Team Right at the Start

Claims Disputes and Litigation Can Be Expensive and Success Is Uncertain; Early Participation by Experts Ups the Success Rate -- They Identify the Most Promising Cases and Improve Preparation, Says Authority on Litigation Accounting Services at Marks Paneth & Shron LLP

NEW YORK, NY--(Marketwire - March 9, 2011) - Insurers need to dispute some claims and pursue fraud but the process can be risky and expensive -- investigations, mediations and lawsuits are costly, and outcomes are uncertain. The smartest insurers take an extra step: They apply economic and forensic expertise early in the process, when experts can help counsel decide whether and how to pursue a case.

Expert guidance and testimony have long played a central role in the late stages of legal proceedings, when experts provide reports and serve as witnesses concerning the substance of the case and the appropriate damages. But many insurers wait until the late stages to engage them, often in the hope of minimizing fees.

But that's false economy, says an authority on accounting services for litigation, who argues that by applying economic and forensic expertise early, insurers can expect more wins and a higher, more cost-effective winning percentage. Experts can help insurers decide if a case is worth pursuing, disputing or settling, based on forensic evaluation of specific evidence and economic evaluation of likely damages. If the case is worth pursuing, experts can increase the odds of winning by helping develop strategy, guiding discovery and depositions, and mounting Daubert challenges to exclude the opposition's experts and achieve summary judgments.

"The sooner you add expert knowledge to the case preparation team, the greater the benefit you will be able to realize," says Donald M. May, Ph.D., a director in the Litigation and Corporate Financial Advisory Services Group at New York accounting firm Marks Paneth & Shron LLP. "Early engagement means better case strategy, better discovery, better expert reports and rebuttal reports, and better Daubert challenges to exclude opposing experts."

"The impact of this expertise on the success of the case more than justifies the cost," Dr. May says.

Dr. May, an authority on valuation who participates frequently in case preparation for insurance and other industries, is available for interviews and can author a bylined article on why -- and how -- to use experts in the earliest stages of case preparation. He can discuss:

  • Why it makes sense to add expert knowledge to the team right at the start. "An expert can help evaluate a case and decide if it's worth pursuing, thus improving efficiency and win rate," Dr. May says. "If the case goes forward, the expert can play a central role in the development of strategy and at several critical junctures."

  • How expertise can contribute in the early stages. "In addition to helping make the go/no go decision about the case, the expert can help shape how the case is developed," Dr. May says. "Expert knowledge of forensics and economics can guide the 'narrative' of the case, generate more effective depositions, inform the discovery process, improve the development of expert reports and rebuttal reports, and create effective challenges to opposing experts, both at trial and in mediation."

  • The growing role of Daubert challenges, and why expert knowledge can and should guide them. "Daubert challenges are increasingly a decisive factor in insurance litigation," Dr. May explains. "A successful Daubert challenge to exclude an opposition expert can weaken the opponent's case or even lead to summary judgment. A Daubert process led by an expert stands a greater chance of success."

  • How to choose the right expert. "Hiring an expert can be a complex process, and it deserves the same consideration as any other aspect of case preparation," Dr. May says. "There are several factors to weigh. Hiring from a group can be easier and more cost-effective than identifying the right individual -- but make sure that the group doesn't always draw on its own full-time experts: They may be force-fitting someone on you for their own financial benefit. You must also determine the type of expert you need -- forensic or economic, a subject-matter expert or someone who is also versed in litigation. And make sure that the expert has recognized subject-matter credentials as well as litigation experience. Finally, perform due diligence on individual candidates, through public domain searches and one-on-one interviews, to make sure they present well, can commit time to the case, and will fit comfortably into the team."

"Engaging experts early adds to the workload in the initial stages," Dr. May says. "But the payoff is a better prepared case that is more likely to succeed."

For more information, or to schedule an interview or arrange a bylined article, contact Katie Moscowitz of Sommerfield Communications at (212) 255-8386 or katie@sommerfield.com.

About Marks Paneth & Shron LLP

Marks Paneth & Shron LLP is an accounting firm with nearly 475 people, of whom 64 are partners and principals. The firm provides businesses with a full range of auditing, accounting, tax, bankruptcy and restructuring services as well as litigation and corporate financial advisory services to domestic and international clients. The firm also specializes in providing tax advisory and consulting for high-net-worth individuals and their families, as well as a wide range of services for international, real estate, media, entertainment, nonprofit, professional and financial services and energy clients. Visit www.markspaneth.com for more information.

About Don May, Ph.D.,

Donald M. May, Ph.D., is a Director in the Litigation and Corporate Financial Advisory Services Group at Marks Paneth & Shron LLP. Dr. May has prepared expert reports and expert witness testimony related to business valuation, hedge fund valuation, lost profits, lost enterprise value, time-series forecast models, asset and investment portfolio valuation and statistical forecasting models and methodologies.

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