It seems strange to suggest that one of history’s greatest military battles would have anything in common with modern insurance subrogation. In 490 B.C., the Athenian army defeated the invading Persian army in a battle in the plain of Marathon, located roughly 26 miles north of Athens. According to legend, after winning the battle of Marathon, the Athenians ordered the messenger Pheidippides to run 26 miles to Athens and announce the victory to the anxious city. Pheidippides raced back to the city in the intense late summer heat and upon reaching the Athenian agora, he exclaimed “Nike!” (loosely meaning “Victory” or “Rejoice, We Conquer”) and then collapsed dead from exhaustion. While the Nike story is likely a myth which doesn’t appear in any historical literature until it shows up in satire hundreds of years later, the history of the battle of Marathon itself provides modern-day insurance claims and subrogation professionals with something of great value that will assist in achieving subrogation victories.
The 5th century B.C. Greek historian Herodotus, the “father of history,” tells us that in 490 B.C., Miltiades, an Athenian general, ordered the Greek foot soldiers – named “hoplites” after their shields known as “hoplons” – into a slightly unusual formation. The hoplon shield had grips at the side rather than the center, jutting out to the left and leaving the right arm free to attack with a spear known as a dory in an underhand position. This design exposed the right-hand side of the soldier, which then had to be protected by the shield of the soldier to the left. It was a style of armor that forced its users to stay in a tightly-packed formation, known as a “phalanx,” which was later emulated by Roman legions and Alexander the Great. The hoplite alone was vulnerable. Only hoplites who remained part of the phalanx had a chance of surviving battle. It forced discipline and cooperation among the ranks.
Modern claims and subrogation handling require a symbiosis similar to that utilized by the Greek hoplites. Especially in companies with separate claims and recovery departments, subrogation victory depends on cooperation and the ability to depend on others in the claims chain. Subrogation professionals must often rely on the ability of claims handlers to initially recognize third-party liability and subrogation potential. Claims with potential third-party liability must be acted on quickly and/or referred to the subrogation department 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.
Successful recoveries by subrogation personnel heavily depend on the protection provided by the claims soldier standing to their left. Like the hoplons initially used with great success by the Greek armies, the insurance phalanx 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 cooperation of the insured; 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 phalanx, 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.
The best teamwork comes from people working independently toward one goal in unison. 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. 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.
Self-insureds must quickly be 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 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 enemy most often encountered is ourselves. Like the phalanx of Ancient Greece which came before us, we must rely on the training and professionalism of the insurance soldier at our side; and they on us.
For more information on how to effectively improve your subrogation program and the results you achieve, contact Gary Wickert at [email protected].