One of life’s simple pleasures is taking a lesson from nature and applying it to the complex and variegated professional world in which we spend so much of our lives. For subrogation professionals, one subtle, but important, such lesson is provided to us courtesy of the five million Canadian Geese which migrate annually and fill the skies with the promise of changing seasons. As Sigurd Olson poetically described in his best-selling book, “The Singing Wilderness”:
Suddenly out of the north came the sound I had been waiting for, a soft, melodious gabbling that swelled and died and increased in volume until all other sounds were engulfed by its clamor. Far in the blue I saw them, a long skein of dots undulating like a floating ribbon pulled toward the south by an invisible cord tied to the point of its V.
Every year Canadian Geese follow ancient pathways from their breeding grounds to wintering areas—an epic journey that has captured the imagination of mankind for millennia. Here in Wisconsin, we are blessed to be directly in the Mississippi Flyway, North America’s greatest waterway, more than 2,300 miles long and the most heavily used migration corridor for millions of Canadian Geese. From the Nunavut Territories in northern Canada to MWL’s New Orleans office, these amazing creatures fly at an average speed of about 40 miles per hour when migrating but may increase their speed to 70 miles per hour if they catch a strong tailwind. Migrations can be as long as 2,000 to 3,000 miles, and the geese are capable of flying up to 1,500 miles in a single day if the weather is favorable. Alone they would never survive the trip.
Fascinating is the cooperation between migrating geese. When you hear the geese honking, look up, shade your eyes, and note that the gaggle’s flying in an “echelon.” Everyone else will assume they’re flying in a chevron, but if it’s staggered—each bird flying just a little to the left or a little to the right of the bird in front of it—then it is an echelon, like tanks in a blitzkrieg or an armada at sea; whereas a chevron is an uninterrupted line shaped like an upside down “V,” similar to the stripes on the upper arm of the sergeant. But why do they fly in such a pattern?
Most people would explain the echelon as a means of saving energy, drafting like cyclists. And they would be partially right. But it turns out that birds in a “V” are actually performing a feat that is much more intricate and impressive than anyone could imagine. As a goose’s wings flap, a rotating vortex of air rolls off its wingtips. These vortices cause the air immediately behind the bird to be constantly pushed downwards (downwash), and the air behind it and off to the sides gets pushed upwards (upwash). If a trailing goose flies in either of these upwash zones, it gets free lift. It benefits from the hard work and the air flow created by the goose which slightly precedes it. Studies have shown that geese toward the rear of the echelon actually have lower heart rates than those toward the front, and they are required to flap their wings less frequently. They fly approximately a meter behind the bird in front, and another meter off to the side. Some geese prefer to fly on the right of the “V” or on the left. Some prefer the center, and others the edges. But on the whole, the birds swap places frequently and there is no constant leader. They pull as a team and each bird benefits from the hard work of the other.
The subrogation professional can learn a lot from these simple waterfowl. From the very moment a loss occurs, the subrogation clock begins to tick. The loss is described by the insured during the initial claim submission or first report and clues are given that a third party might be responsible for causing the loss. Far too often, the claim proceeds without follow-through on important questions about who or what might be the proximate cause of a loss. Instead, the focus is all too often exclusively focused on damages and getting the claims process in motion. Months or years later the file is transferred to a subrogation professional or vendor and the hard questions are first asked. Quite often, the delay in paying attention to recovery potential is extremely damaging or even fatal to the carrier’s ability to recoup its loss and turn back the hands of time for its insured.
Modern claims and subrogation handling require a symbiosis similar to that utilized by Canadian Geese. This teamwork is especially critical in companies with separate claims and recovery departments. Subrogation success depends on cooperation and the ability to depend on and benefit from the work of others in the claims chain. It is a learned trait and one that doesn’t develop naturally. Subrogation professionals must often rely on the ability of claims handlers—trained to limit liability and mitigate claim payments—to initially recognize third-party liability and valuable subrogation potential. Claims with potential third-party liability must be acted on quickly and/or be referred to the subrogation department or subrogation counsel to protect and preserve any potential for a successful recovery. Liability must be recognized and evidence must be preserved. Investigation must focus not only on the claims-handling aspects of the loss, but any and all third-party liability as well. Notice requirements – sometimes as short as 30 days – often depend on the initial claim examiner. Statements that do not address the nuances of third-party liability will be of little use to downstream subrogation professionals.
Successful recoveries by subrogation personnel heavily depend on the hard work and the vortex created by the claims professional who worked on the claim before him or her. Like the mysterious inter-cooperation of geese, the insurance echelon will fail if there is no discipline and cooperation. There must be open and frequent dialogue and communication between insurance professionals with the single objective of a successful subrogation victory in mind. Claims professionals support subrogation efforts and rely on the insured’s cooperation; the insureds’ risk managers must rely on the support of their management; subrogation professionals rely on claims investigators and the accuracy of information provided by the claims department; and all insurance professionals depend on quality and cost-effective subrogation action and/or litigation taken by a subrogation vendor or law firm. If there is any gap in the echelon, disaster can result. It is truly a team effort. Vince Lombardi is noted for saying, “Individual commitment to a group effort–that is what makes a team work, a company work, a society work, a civilization work.”
For the claims professional to perform effectively, they must be properly trained to recognize tort liability. They must put on their plaintiff’s hats and commit to setting aside any defense biases they may harbor. This is the time to be creative and think creatively, rather than simply default into noting that the insured was likely comparatively at fault for causing the loss. Subrogation professionals must likewise be trained to properly and thoroughly gather all the facts and preserve all necessary evidence. Experts and/or investigators may be needed. The company as a whole must recognize the need for an investment of time and money to achieve success. While being cost-effective is the very essence of success with subrogation, there are rarely any shortcuts that will not affect the ability to subrogation or the size of the recovery.
Subrogation is a team sport. The best teamwork comes from people working independently toward one goal in unison, and while teamwork makes the subrogation dream possible, a vision becomes a nightmare when the team is bad. Human nature leads to downplaying subrogation; because to recognize it demands significant additional work and effort for someone already very busy with just the claims-handling side of things. Claims professionals must be on the alert for any sign of third-party liability and must fully and completely document the file accordingly. Early witness statements that have nothing to do with coverage or the extent of damages are time-consuming but essential to successful subrogation efforts downstream. Evidence must be retained. Photographs must be taken. Documenting the actual conditions of a slip and fall should always, always be part of the initial claims handler’s checklist of items to perform. Without photographs and investigation, slip and fall cases—which are difficult to pursue even if all the proper investigation is promptly completed—become impossible to recover on. If an insured isn’t advised of potential subrogation and advised not to settle and sign a release, rights can be lost. In workers’ compensation claims, an employer quick to blame the employee out of fear of being sued must be informed about the Exclusive Remedy Rule and the fact that not only are they immune, but successful subrogation will lead to lower experience mods and reduced insurance premiums in years to come. Subrogation must become second nature even to claim intake personnel.
Self-insureds must also be promptly tutored on their subrogation rights and options. They are indispensable to their own success because only they have the best knowledge of the suppliers, vendors, procedures, and company culture involved in a loss. Where a product is involved, potential target defendants must be placed on notice. Subrogation claims should be reviewed frequently to ensure that the battle line is moving forward and not stagnating. Subrogation claims do not get better with age, and contrary to public opinion, do not increase in value based on the number of identical “demand letters” that are sent. Hire only lawyers who specialize in subrogation. Defense lawyers do what they do best – limit liability and see valid claims only rarely and myopically. When it is time for the tortfeasor’s liability carrier to consider cutting a subrogation check, the formidability of the team you have assembled speaks volumes about how committed you are to win the battle.
The road to successful subrogation is the road less traveled. It requires an investment and there are few shortcuts. As Muhammad Ali used to say, “I run on the road long before I dance under the lights.” It isn’t always easy, but the obstacle most often encountered is us. Like the selfless teamwork of migrating geese, we must rely on the training and professionalism of those flying ahead of us.
For more information on how to effectively improve your subrogation program and the results you achieve, or to schedule subrogation team training, contact Gary Wickert at [email protected].