GUIDELINES AND REQUIREMENTS FOR OUTSIDE ... - Canal …



GUIDELINES AND REQUIREMENTSFOROUTSIDE COUNSELCanal Insurance CompanyCanal Indemnity CompanyINTRODUCTION The following materials outline the guidelines to be used by outside counsel hired by Canal Insurance Company or Canal Indemnity Company (“Canal”) to defend or represent the interests of Canal insureds depending upon the matter-specific assignment. Defense Counsel Caveat: Canal recognizes that defense counsel’s professional and ethical obligations owed to the insured are paramount. We expect all defense counsel to exercise independent judgment when defending our insureds. In this particular regard, these guidelines are designed to be flexible and Canal strongly encourages defense counsel to promptly raise and discuss any conflicts that arise or may potentially arise that involve these guidelines. Our Claims professionals have been trained to seriously consider all such conflicts and to work with you to resolve them to the benefit of the insured.STAFFING OF FILES: A Team ApproachWith respect to how Canal-assigned matters should be staffed, we believe that successful case management is a cooperative team effort between Canal and outside counsel. Unless otherwise communicated by Canal, this team effort is headed by the Claims Adjuster and his or her Team Manager on the Canal side and, unless otherwise agreed in writing, the firm’s Canal-designated primary litigation partner for the Firm (“Lead Canal Partner”). Canal retains a law firm because of its desire to work with a particular attorney within that firm, not because it seeks to retain the firm, or lawyers in the firm with whom it is not familiar. In general, Canal has developed a Litigation Team approach that has as its core principal “one lawyer-one file.” This being said, we recognize that there may be occasions where additional approved resources may be needed. In order to obtain the best litigation result and control the ultimate cost of that result, Canal thus requests that a limited number of lawyers handle cases assigned by Canal. We expect the Lead Canal Partner to remain actively involved in our matters and to manage the firm’s relationship with the insured and Canal in order to meet the expectations set forth in these guidelines and the Canal-Firm engagement letter. In order to manage costs and to maintain bench strength, we expect the Lead Canal Partner to assign and supervise Associate and paralegal level tasks to an approved member of the Canal team at that level within the firm. No Canal-assigned matter should be transferred or assigned to any other person within the Firm unless Canal is made aware of this transfer in advance and agrees in writing to it. Team Structure-GenerallyDepending upon the severity or complexity of an assignment, each litigation team may have the following components:Canal A Canal Claims Adjuster and his or her Canal Team Manager.To the extent relevant, the Canal-assigned outside Independent Claim Adjuster or investigatorThe FirmLead Canal PartnerA pre-approved group of other partners, associates, and paralegals within the Firm depending on the complexity and severity of assignment and related tasksAssignment and Supervision within the Firm Within the Firm’s part of this team, individual files are to be assigned and supervised by the Lead Canal Partner to appropriate Canal-preapproved Firm team members (i.e., specific partners, associates, law clerks, paralegals) given consideration for the matter/task complexity, severity, and the team member’s position and experience level. (In the interest of its insured, Canal reserves the right to select certain attorneys to handle or participate in the handling of particular files); generally, one lawyer and, where appropriate, one paralegal should be assigned to a given matter, and those individuals should continue to work on the matter to its conclusion.In the event an individual on the firm’s professional team encounters a conflict that immediately impacts his or her ability to handle an assignment, he or she may obtain assistance from another similarly experienced lawyer or paralegal within the firm without prior Canal approval; In such case the Lead Canal Partner shall , within two (2) business days of the conflict recognition situation, provide the Canal Adjuster and Team Manager with notice of the situation and work promptly toward a mutually agreeable resolution and/or reassignment.Lawyer and paralegal assignments should not result in unnecessary duplication of time or effort. The Firm’s team will maximize the use of Canal-approved paralegal and law clerks to complete routine paralegal-level tasks and those functions that do not absolutely require a lawyers’ involvement. The team will likewise maximize the use of non-billing administrative assistants/secretaries to perform nonprofessional, clerical, and administrative tasks that do not absolutely require a paralegal’s involvement. In no event shall Canal be billed for a lawyer, law clerk, or paralegal’s performance of clerical or administrative tasks. Any additional resources used on a particular case must be approved in advance by Canal’s assigned claims Adjuster. Team Structure-Complex Litigation As noted above, Canal realizes that on more sophisticated exposures, there may be circumstances where “one lawyer-one file” is not a sufficient response. Pre-approved, qualified partners, associates and paralegals with relevant experience may be used when the goals of the litigation plan necessarily require the use of additional professional resources. However, the use of additional professional legal resources must be approved in advance and in writing by Canal, preferably when the initial case strategy is formulated. Examples of exceptional circumstances that might require attendance of more than one of the Firm’s professional team at a single event would be key or complex depositions, mediations, settlement conferences or trials. However, unless otherwise agreed to in writing in advance by Canal, only one approved attorney should attend and bill for these types of events.Duplication of Effort- Firm Business, Development, or Personal ConsiderationsAs noted above, Canal shall not be billed for duplication of efforts or attendance resulting from assignments, or re-assignments, made for reasons of in-house training, staff turnover, administrative expediency or internal personnel concerns. Except with respect to responses to complex discovery motions and briefs, billing for the review of the same document by multiple timekeepers is considered duplication of effort. However, paralegal preparation of discovery responses for review by attorney and the attorney’s final review of the responses is not considered duplication. We recommend that you discuss staffing of claims with your Canal contact at the outset of the development of the litigation plan.Primary ContactsCanalCanal’s case specific Adjuster shall direct and supervise matters assigned to outside counsel. That individual will be the matter-specific primary contact responsible for working with outside counsel to gather evidence, assess risk exposures, develop and implement a strategic litigation plan, coordinate litigation efforts, and internal and external reporting of case developmentsCanal reserves the right, at its discretion and at any time, to assume the handling of the negotiations of a case to conclusion.The FirmGenerally, the Lead Canal Partner shall serve as the firm’s matter-specific contact.However, when the Lead Canal Partner assigns the primary handling and contact designation of a matter to another attorney in the firm, the Lead Canal Partner nevertheless remains ultimately responsible for the work performed, the bills generated, the outcome, as well as the management of Canal’s continued relationship with the firm. Canal reserves the right, at its discretion, to request that the Lead Canal Partner resume direct responsibility for handling the file.LITIGATION MANAGEMENTCentral to the management of any lawsuit is a thorough planning process and a mutual understanding of the scope and terms of the assignment. Detailed discussions between outside counsel and Canal’s Claims Adjuster should take place at or near the time of assignment and continue throughout the lifespan of the case. Defense counsel is expected to keep its clients informed of key developments and issues, where logistically possible. In order to ensure that these discussions are meaningful, Canal requires a sequence of key activities to be accomplished.Assignment Letter. At the time of assignment, Canal will provide known details of the claim and initial direction. See sample Assignment Letter, Exhibit A. If counsel does not receive claim details and instructions within one week after the assignment of a file, please notify the Canal Claims Adjuster that this has not been received. Please note that there may be circumstances in which Canal may recommend limited initial activity to be completed by the firm.Conflict of Interest. Consistent with your ethical obligations and before the Firm accepts a Canal assignment, please notify the assigning Canal contact promptly and in writing of any conflicts of interest that exist or foreseeably might arise in connection with the assignment. An email confirmation of the results of a conflicts check is sufficient. Initial Activity. Immediately after accepting the assignment, there are certain, routine actions that counsel will need to initiate. It is imperative to make prompt and reasonable efforts to fully protect our insured during this early stage.Upon receipt of a new case, assigned counsel should promptly acknowledge the assignment in writing within 5 days unless urgent circumstances necessitate a more immediate response. The reply should contain the file caption, identity of the handling attorney and suggestions (if any) as to initial case handling. In addition, upon receipt of a new case, counsel shall notify the insured of his/her representation, inform them of their document retention, anti-spoliation claim obligations and file all necessary appearances, answers, etc., to properly protect the insured.Unless otherwise escalated, no later than 10 days after receiving the assignment, the handling attorney shall participate in a telephone conference with the Claims Adjuster. The purpose of this conference is to collaboratively identify areas of risk, conduct initial liability and damages assessments, develop an initial case management strategy, discuss specific staffing or resources needs, and to discuss anticipated indemnity and/or expense reserving related issues. Unless with respect to a rapid response assignment or unless otherwise agreed as part of a litigation plan or strategy, during this initial activity period the Canal Adjuster will continue to be responsible for conducting or coordinating ongoing investigations, such as witness statements, securing records and reports, photographs, etc. In order to best protect work product, the firm shall direct the Canal Adjuster’s gathering of evidence in anticipation of or in response to litigation. Please document your role in this important process. Except in connection with a rapid response or unless otherwise agreed, the Firm shall not hire investigators or other outside vendors to conduct this type of work without prior written approval from the assigned Canal Team Manager.You are encouraged to consult Canal’s Claims Legal Team who are available to advise and roundtable issues of fact, law, insurance coverage, policy interpretations, E-Discovery, or other legal matters that Canal may have litigated or otherwise encountered in the past. Please directly notify Claims Legal Manager and the assigned TM immediately should your Firm receive any form of notice or allegation that Canal or any of its vendors, including your Firm are accused of unfair claims practices or bad faith conduct in the handling of any matter. Initial Report of Counsel. One of the most important roles served by outside counsel is to provide regular, strategic, timely reports beginning with an initial report and initial litigation budget. The attorney assigned primary responsibility for a file is required to provide an initial report identifying key issues, status (e.g., work against or changes to the initial litigation plan), discussing, among other things: parties, venue, coverage or liability theories and defenses, legal and factual issues, liability and damages assessment, anticipated discovery, additional investigation, likelihood of success on the merits, and projected litigation expenses.The timing of the initial report will naturally be influenced by the status of the file investigation at the time of its referral to the law firm. This report is expected to soon follow the initial case management telephone conference referenced above. In no event, however, should the Initial Report be submitted to Canal later than 30 days after assignment. The initial report should be in the form set forth in Exhibit B and submitted in Word or Word Perfect format (an additional PDF copy is acceptable).Quarterly Review With Counsel. It is important, during the course of any litigation, that outside counsel keep Canal apprised of the status of the case as it progresses and of any key development that impacts the initial case plan or Canal’s reserves. Canal also requires all counsel to schedule a quarterly conference call with the Claims Adjuster on all files up to conclusion of the action. The conference should be strategic in content. It should not regurgitate or reiterate the case to date but should include a reasonably short, high level summation of key developments, including the following: A brief, concise account of the key activities and developments that have taken place during the preceding 90 daysSufficient detail on activities or documents that have a significant impact on our current strategy and reservesCurrent strategyRecommendations if developments indicate that we should revisit our plan A brief and concise list of activities or document production that is expected to take place during the following 90 daysRequests to undertake the activity that requires pre-approval Any change in the budget or litigation plan and why it is necessary Interim Communications by Counsel. Beyond these two forms of communication Canal should always be kept current and informed of significant developments. Significant developments include without limitation:New information which will change investigative or handling strategy, risk assessment, damages valuation, or reservesNew information which will change the evaluation of the case; to include medicals, prescriptions, surgery, or diagnosisNotice of key court appearances and other scheduled datesNotice of new and unprojected past, present or future expensesReceipt of settlement overtures, offers or demandsPursuant to your applicable Rules of Professional Conduct, it is your responsibility to maintain communication with your client and to keep your client apprised of the status of the case against him. Canal expects to be copied on any and all such written communication.Discovery. Prior to initiating any discovery, and ideally as part of the initial strategic planning communications, you and your assigned Canal Claims Adjuster should collaborate about the scope of such discovery, the information and benefit to be obtained, and the estimated cost. Discovery responses should not be routinely summarized.Advance written approval from Canal is necessary for the attendance of more than one timekeeper representing our insured at depositions, hearings, arguments, trial, meetings or similar events.Defense Related Discovery Requests. Discovery requests requiring routine information from Canal about the claim should be promptly forwarded to the Canal Claims Adjuster for review and consideration. During this transmission, Counsel should:indicate what assistance is needed from Canal to prepare its responses.provide Canal with a pre-filled draft response containing information provided to the Firm to date, an indication about what further information is needed, and;prepare a brief outline of recommended objections, if any. Document Transmittal. As stated above, Canal expects to receive same week administrative or clerical electronic transmission to Canal of copies of all work product generated and all documents transmitted and received in connection with the handling of the file (i.e., our files should match). This will help us to stay in synch with the file as it progresses and more efficiently process your invoices. Our engagement letter with your firm provides tips on how to do this efficiently. The only exception to this rule involves extremely voluminous GL Construction Defect construction project documentation but only when the Canal Adjuster has requested the firm in writing to house the documents and not to copy them to Canal. Where a collection of various records, (e.g., medical reports, financial documents, tax returns, etc.) have been requested, it is not necessary to forward each individual item as it is received. Counsel may await receipt of all (or substantially all) of the documents, and submit them to Canal as a group to be included at minimum in your next quarterly conference call. In the conference call, Counsel should:give a brief and succinct summary of the documentsexplain their role in the litigation and significance to the legal and factual issues presented.Employment of Experts. The engagement of medical or other experts for evaluation or trial purposes should be a subject of prior consultation between counsel and the Canal Claims Adjuster. You do not have any authority to retain experts at Canal’s expense without Canal’s advance written approval, which will not be withheld unreasonably.Mediations, Pre Trial and Trial: Conferences, Negotiations, ReportsCanal Participation. Pretrial conferences, mediations and settlement negotiations are critical to the successful disposition of any claim. Counsel should promptly notify the Canal Adjuster of the date, time, and expected participants of these events upon their receipt of notice of the same. It is essential that Canal receive from Counsel at least 30 days advance written notice of these events so that it may review and properly respond to the given situation. Canal considers all such meetings as settlement opportunities and therefore must be consulted for settlement authority and instructions prior to Counsel’s attendance. Counsel should promptly inform Canal of all opportunities to reasonably resolve the pending claim. Counsel must obtain settlement authority and instructions from the Claims Adjuster prior to any and all events involving settlement discussions. Scheduling and Company Attendance. Counsel should notify Canal immediately once a matter is scheduled for mediation, settlement conference or trial. When reasonably possible, the Firm will involve the Claims Adjuster in the date selection process. Unless otherwise agreed, Canal requires at least 30 days advanced notice for a Claims Adjuster to attend mediation or trial. Counsel is also expected to promptly and directly notify the insured, and their personal counsel, if any, of mediation, trial dates and attendance needs in order to provide the maximum allowable time for planning and preparation.Pre-Mediation Review. No less than forty-five (45) days prior to the beginning of any mediation, Counsel is required to schedule a conference call with their Canal contact and address the following issues: a current assessment of the liability and damage issues presented (including any evidentiary “problems” in connection with those issues)legal and factual issues in dispute,the identity of witnesses expected to be called (including experts)an estimate of the length of the mediation, anticipated costs in connection therewiththe status of settlement negotiations at that point, if any. Unless a Canal representative is present during mediation, counsel is required (at a minimum) to twice daily report status and negotiations progress to their Canal contact.Pre-Trial Reports. No less than forty-five (45) days prior to the beginning of any trial, Outside Counsel is required to provide the Canal Claims Adjuster and Claims Legal Manager with a comprehensive pretrial report setting forth an assessment of the coverage or liability and damage issues presented (including any evidentiary “problems” in connection with those issues), the legal and factual issues at dispute, the identity of witnesses expected to be called (including experts), an estimate of the length of the trial, anticipated costs in connection therewith, and the status of settlement negotiations at that point, if any. See Exhibit B.Unless a Canal representative is present during trial, trial counsel is required (at a minimum) to report twice daily to their Canal contact to discuss the status of the trial and its relative impacts on exposures and expected outcome.Process Services. Canal expects outside counsel to utilize the most cost effective means for service of process of subpoenas, etc.? In certain instances, such as out of town process service, forwarding papers to the sheriff of the county where the papers are to be served may be more cost effective than utilizing a local process server or an out of town process server.? Please use your discretion to obtain the best possible service cost effectively.Subpoena(s). Paralegal time billed for preparation of subpoena(s) should reflect the actual time it took the paralegal to prepare the subpoena(s).? Canal recognizes that a subpoena is a template and mail merge form of document and Canal should not be billed a separate charge for each subpoena prepared.? In addition: Any billing entries for mailing subpoenas are considered clerical and will not be reimbursed by Canal.? Research in preparation of subpoenas should include a detailed description of the research performed and are a separate billing entry from the preparation of the subpoena.? RUSH process service of subpoenas should be avoided and Canal will not reimburse for the “rush” fee on the process server’s invoice unless counsel provides an explanation why “rush” service was necessary.? Generally, counsel should be able to timely prepare subpoena(s) and avoid using “rush” services.Similarly, billing for form letters and documents that are 2nd or more in a group should reflect the actual time it took to prepare the documents and Canal should not be billed a separate charge for each document.SCHIP ACT (Medicare Set Aside). In order to protect the insured and Canal Insurance, it is counsel’s responsibility to ensure compliance with the requirements of the SCHIP Act (Medicare Set Aside) and any related regulation prior to finalizing any bodily injury settlement.Litigation Alternatives. Canal encourages the Firm to proactively explore and, when agreed by Canal, to pursue, creative alternative dispute resolution procedures such as mediation, arbitration and expedited case development. Such techniques may lead to improved results for the client at lower costs. We expect that you will be mindful of such possibilities and discuss them with Canal as they arise.Confidentiality. During the representation, your Firm may deal with confidential or proprietary Company information. This information may relate to a specific client of Canal, Canal in general, or Canal’s internal business processes. This information is very sensitive, and must be held confidential and privileged even after the Firm ceases to represent either Canal or its insured.All proprietary Canal documents or other materials entrusted to counsel must be maintained in confidence by counsel, and upon request, returned to Canal at the conclusion of the matter. Counsel may destroy Canal-assigned files and/or documents only with advance written authorization from Canal’s Claims Legal Manager.Media Relations. Without Canal’s prior written consent, Counsel must not comment to the media, on or off the record, with respect to any Canal-assigned matter.BILLING & EXPENSESCanal, like all members of the insurance industry, is ever mindful of the increasing costs of providing the services our customers – your clients – have come to expect. The cost of outside vendors, including legal counsel, has become a matter of constant scrutiny in hopes of securing the best possible services at reasonable and realistic prices.Hourly Rates. Canal expects that your legal fees will be based upon the lowest hourly rates that you charge for similar services to other clients. Canal processes all requests for rate changes via its Rate Review Committee. As part of this process, Canal’s Claims Legal Manager must be notified of and either Canal’s Claims Legal Manager or the Chief Claims Officer must approve in writing, in advance, any proposed change in hourly rates or billing practices.Billing Cycles and Submission. Unless otherwise agreed to in writing by Canal, all bills for legal services performed and authorized expenses incurred by your Firm in connection with Canal-assigned matters must be submitted via our web-based bill submission program, Legal eXchange. Details concerning this program are provided via companion documentation. The Firm agrees to incur any and all reasonable costs associated with the setup or use of this or any other litigation or expense management system implemented in the future.In order to develop the required accuracy in our planning process and to provide your Firm with a regular cash flow, Canal has adopted a three-month billing program which is mandatory except as provided below. Statements must be submitted on a rolling three-month cycle beginning three months from the date you receive Canal’s assignment letter. Subsequent bills must be submitted every three months thereafter, or three months from the prior bill WITH THE EXCEPTION OF THE INVOICES LISTED BELOW THAT MUST BE SUBMITTED FOR REVIEW AND PROCESSING BY THE END OF THE FOLLOWING MONTH:Invoices that exceed $5,000 and for any month and/or; Final invoices Before submitting your bills to Canal, the Firm’s Lead Canal Partner should review them for accuracy and ensure compliance with these guidelines and requirements. All bills submitted to Canal will be presumed to have the Firm’s Lead Canal Partner’s authority and approval. Prior Approval. Except in exigent circumstances, the below activities and those identified elsewhere herein as requiring Canal approval are not considered reimbursable without prior written approval from Canal. Failure to obtain advanced written approval from Canal may result in rejection of related billing. When prior written approval (PA) is required, please indicate (PA) when billing time or expenses for the previously approved activity. The best practice is to discuss these items with your Canal Adjuster during ongoing litigation planning sessions.Non-Routine Motion Practice. All non-routine motion work must have prior written approval, and said approval must be indicated on the invoice by inserting a (PA) with each entry that relates to the motion work. “Non-routine” is defined as any motion that counsel estimates will take more than 2 hours to research, draft and serve. Non-Routine Legal Research. All non-routine legal research must have prior written approval, and prior approval must be indicated on the invoice by inserting a (PA) with each entry that relates to the research. “Non-routine” is defined as any research that counsel estimates will take more than 2 hours to complete.Court Appearances and Other Scheduled Meetings. As emphasized elsewhere, Canal will not pay for more than one attorney to attend any meeting, deposition, conference, mediation, hearing or other event unless prior written approval is obtained. All billing items relating to such a situation must include the (PA) designator. Clerical/ Administrative Activities. Canal will not pay for administrative or clerical activities, i.e., work that can and should be done by secretaries, receptionists, clerks, runners, word processers, transcribers or other administrative staff. Travel. Canal will NOT reimburse any mileage expenses incurred for travel undertaken within a 50 mile radius of the geographical area of the office of the Firm at which the assigned matter-specific attorney professionally resides. Mileage expenses in excess of 50 miles may be billed at the current IRS allowable rate. Should, at Canal’s election and counsel’s agreement, counsel be asked to assume handling of a case outside their area, Canal will agree to make reasonable reimbursement for travel expenses (including time). In order for this type of expense to be approved and reimbursable, this matter-specific exception should be confirmed in writing between the Firm and Canal.When travel related expenses have been approved, Canal anticipates that counsel will be cost sensitive when making arrangements. Except as is provided in the Receipts section below, Canal will only reimburse the cost of economy travel and standard accommodation rates not to exceed $175 base rate per night. Where it results in cost savings, public transportation (i.e. taxis and/or shuttle services) should be used rather than private car rentals. Canal will only pay for cost of a mid-size car. When possible, please work with your assigned Claims Adjuster to take advantage of Canal’s contract rental car rate with Enterprise.As a general rule, Canal will not reimburse the expense of local travel, parking, tolls, and similar overhead. However, in the event, an approved timekeeper is required to travel to local courts or law firms and actually incurs direct case-related out-of-pocket expenses, for unreimbursed parking, subways, necessary taxis, etc., Canal will reimburse those expenses upon production of supporting receipts. This exception does not apply to toll charges incurred in the firm’s local area. If attendance is required for more than one matter, Canal or otherwise, the firm is expected to prorate these expenses.Multiple Appearances. As stated above, Canal will not pay for multiple representation at meetings, depositions and court appearances, except when such representation clearly is designed to achieve improved results or significant efficiencies, and only when approved by Canal, in advance and in writing. When prior written approval (PA) is required, please indicate (PA) when billing time or expenses for the previously approved activity.Intra-Office Conferences. Canal will not pay for intra-office conferences, telephone calls or other communications among members of the Firm’s team. The only exceptions to this rule are (1) when a partner is directing an associate or paralegal as to nature or scope of an assigned task or (2) a partner is directing a task requiring a different legal expertise to another partner in house. These exceptions do not apply to mentoring, training, or other periodic “team” meetings or file reviews.Rescheduling of Depositions and Hearings. Canal understands the difficulty of ensuring that depositions, hearings, and even mediations are held on schedule and that opposing counsel (either plaintiff or co-defendant) may be uncooperative or the court, inflexible. Canal is conscious of the significant added expense multiple cancellations of such events contribute to the cost of a case. Canal reserves the right to reimburse no more than one re-scheduling. A best practice is to promptly communicate the circumstances of cancellations and rescheduling as they occur to ensure Canal understands that the reasons for cancellation are due to external forces. Disbursements and Out of Pocket Costs General: Any single disbursement in excess of $500, including bulk photocopying expense reproduction or transcripts, etc., must be approved in advance and in writing by the Canal Claim Adjuster. Aggregate expenses that exceed $2000 must be approved in advance and in writing by the Canal Claim Adjuster.Deposition transcripts: Deposition transcripts should not be ordered unless:Requested by Canal InsuranceRequired by Federal, State or Local RulesNecessary for the defense of the Canal insured.Certain jurisdictions dictate that the noticing attorney is the “custodial” attorney who receives delivery of the original deposition transcript. The custodial attorney is then required to make the original e-transcript available to all other parties for copying. Counsel will comply with local rules and use every appropriate effort to electronically reproduce the transcripts as opposed to purchasing transcripts direct from the court reporter or otherwise incurring printing or hard copying costs. Any vendor discounts received by your Firm shall be passed on to Canal.Vendor Services General: In certain jurisdictions, Canal may have relationships with certain litigation support vendors for improved efficiency and more favorable rates. When they will benefit an assigned matter, Canal will communicate the existence of these relationships to counsel and request that counsel only use these vendors. Investigators and other Consultants: No Canal counsel may, at Canal’s expense, hire, contract with, or agree to a service agreement with any vendor of services, including but not limited to investigators, surveillance specialists, experts, physicians, and consultants (of any type), without prior written approval. Except in exigent circumstances, when investigative services or surveillance is needed, the Firm should first enlist the support of Canal SIU via the Claims Adjuster. In cases in which such services are required, while the Firm may recommend a vendor and assist in rate negotiation, unless otherwise approved in writing by Canal, the actual engagement agreement and all billings should be between the vendor and Canal and not the firm. When prior written approval of these types of vendors is sought, counsel should provide Canal with all relevant details concerning the individual available, including resume, professional credentials, hourly rates, and an estimation of the amount of service we will need.BILLING COMPLIANCE In order for Canal to process a firm’s invoices within a reasonable period of time, we require a certain amount of standardization in the invoices submitted via Canal’s online billing service, Legal eXchange. We have found that the biggest source of billing “push back” and delay is vague, block or generic descriptions of services performed. Every billable task actually performed should be separately entered and specifically described to ensure prompt payment. Canal has been and will continue to make an attempt to correlate the description with the documented file activity and what appears to be a reasonable time allotment. Canal will make any adjustments it deems appropriate and in doing so invites counsel to discuss the adjustment or resubmit more specific time descriptions. Except as provided herein, Canal requires that all bills are submitted via Legal eXchange.Required Billing Information. All Invoices Must Contain the Following Information:Claim numberName of the Canal Claim AdjusterInsured nameDate of lossYour taxpayer identification numberDetailed description of the work performedStatement of the time spent on each taskName or initials of the time-keeper performing each taskDetailed itemization of all disbursements (receipts must be attached)Cumulative total of fees and disbursements incurred on the matter to dateSchedule of each time-keeper’s hourly billing rateYou should not bill Canal for more than a 10 hour day for any one day or more than one file unless documentation demonstrating actual need and Canal approval is providedRequired Billing Format. The following principles guide bill preparation and submission: Hourly billing shall be in one-tenth (1/10) hour increments with minimum billing at one-tenth hour. Time billed shall be recorded contemporaneously with the tasks performed. Time billed should not be reconstructed or “reverse engineered” at the end of the day or week. Nor should Canal be “value billed” for time not actually spent performing the services rendered.Each task billed should be described in specific detail; e.g., entries for meetings and telephone conferences should identify participants, subject matter and purpose; legal research and preparation or review of pleadings, correspondence, memoranda and documents should reference subject matter, etc. Clearly identify documents referenced in your bills. (e.g., instead of review and revise document, state “review and revise employee exclusion section of MSJ memo”)Each task and its associated time should be listed separately on the statement (no bulk or block billing)The individual performing the task must be identified, together with his/her billing rateThe time billed for any task should not exceed either the actual time expended, or the amount of time reasonably necessary for the task, whichever is less (no standard or “minimum” charges)Activities performed to further multiple matters, such as court appearances on several cases or travel, should be fairly apportioned among all the matters, even if for different clientsFees for duplicative or redundant tasks will not be paidTasks should not be billed at a rate above the agreed-upon rate for the individual or job classificationNo individual may bill for a task performed by anotherCanal will not pay for the rendering of duplicative legal services. Therefore, it is critical to carefully and specifically describe distinguishing work when two or more timekeepers are working on related activities. If two or more timekeepers perform and bill what appears to be the same task, and without prior Canal approval, Canal will decline to pay for the duplicate task.Non-Reimbursable ItemsThe following items will not be accepted as a separate expense, cost or fee:Office overheadWord processing, data entry, or performance of administrative duties, including, but not limited to, copying electronic mediaAll local telephone charges (invoice must specify phone number and who called when charges are long distance) (counsel are encouraged to utilize Canal’s toll free number 1-800-452-6911 when contacting Canal)Time in budgeting, preparing or reviewing billsRoutine postage, in-town deliveries or court filings by law Firm personnelUnnecessary overnight mail, fax, outside messenger or RUSH servicesAdministrative time; e.g., “opening file” and “closing file” chargesIntra-office conferences, except as described in Interoffice section above.Proof-readingUnnecessary or excessive legal researchUnauthorized or excessive travel, lodging or in-town meals Unreimbursed parking (unless in conjunction with claim-specific and documented appearances described in Local Travel above or authorized out-of-town travel)Local toll chargesFirst or business class airline travelSecretarial, library, runner, or other clerical staff tasksComputer-assisted researchFax chargesAny markup or surcharge on bills of experts or billable time by the firmOther similar internal operating costs (i.e., internal messenger or courier services, refreshments, stationary, office supplies)PostageLocal transportation charges (including mileage less than 50 miles in your geographical area) except as provided in Local Travel above.Non-file related charges or purchasesReceipts Required All expenses charged to the company must be itemized, with copies of invoices attached at the time of billing including without limit;All travel expenses ($175 per night maximum for hotel expense unless approved in advance and in writing by Team Manager due to documented unavailability of rooms within this range.)Filing costs and feesSubpoena costs and feesCourt reporter chargesOutside photocopy expenses Consultant service billsCourt, mediation, and deposition parking and other approved Local or other travel receiptsPhotocopying/Reproduction. When reasonably possible, Canal encourages the use of electronic transmission and reproduction of documents. (e.g., copy to CD instead of print hard copies). When electronic reproduction is not reasonably possible, then Canal will pay for photocopying services necessarily rendered its files at the rate of $.05 per copy. High volume photocopying should be performed by outside vendors when more cost effective. In such cases and where logistically practicable, these expenses should be direct billed by the outside vendor to Canal. Otherwise, please upload the receipts for these expenses with the Firm’s related billing statement.BILL REVIEW AND PAYMENT PROCESSESCanal has adopted a policy of auditing/reviewing each invoice for accuracy, appropriate time allocation and compliance with our guidelines. It is Canal’s policy that we will reduce any invoice by the amount of the questionable items, make payment on the reduced amount and invite counsel to contact us to discuss any items they feel may have been eliminated or reduced in error. As noted above, all bills shall be submitted through Legal eXchange. All firms must be on Legal eXchange. Going forward, all firms performing Canal assigned legal services must submit all bills and invoices through Legal eXchange with the only exception being work performed on files that 100% of the total bill for services and expenses will not exceed $300 inclusive of all time spent from opening to closing. These bills are directly submitted to Canal’s Legal Bill Review Unit through the Legal eXchange transmission process.Billing Appeal ProcessJust as the Firm will fairly and ethically bill Canal for the time and expense reasonably incurred in the performance of assigned legal services, Canal will fairly line-item review the bills. In the event that Canal finds an entry that does not comply with these guidelines or appears too high, it will adjust the bill and the legal bill reviewer will promptly communicate that adjustment back to the firm. Tier 1 In the event that the Firm desires to explain or inquire about the bill reviewer’s adjustment, the first step is to communicate directly with that reviewer. Please treat our employees professionally. It is their job to ask questions and/or adjust if a billing entry does not make sense to them. Please do not involve the Adjuster or their Team Manager in this dialogue.Tier 2 In the event the Firm wishes to inquire about or appeal the adjustment in more detail, the Firm should escalate the matter and contact the Legal Bill Reviewer’s Manager, the Claims Ops Manager. The COM will work with you to resolve the issues and, as necessary, will involve in-house team members (including the Adjuster, Team Manager, and/or in house legal counsel) in the resolution process.Tier 3 In the event that there is a significant issue that rises to relationship level, please request the Claims Ops Manager to set a conference call between you, COM, Claims Legal Manager and Chief Claims Officer so that we may work promptly to mutually resolve the issue and move on. Outside Audits and File ReviewsCanal will from time to time conduct high level file reviews and independent audits of the law firm’s billing records and Canal-assigned files to ensure compliance and review performance. Findings will be discussed with the Lead Canal Partner, and any issues arising therefrom will be resolved through discussion between the Lead Canal Partner, and the appropriate Canal representative. In accepting the assignment of any matter, the Firm agrees to cooperate with any review or audit, and to give the auditors access to files, records, bills in electronic form, timesheets and billing reports, and to answer questions concerning any items on the file, bills, records or computer reports relating to those bills. The Firm further agrees to provide reasonable space and facilities in its office to conduct such reviews and audits. If an audit reasonably demonstrates over billing on a file, that Firm will immediately reimburse Canal.File Transfer In the event that Canal directs the law firm to discontinue work on one or more files and/or to transfer one or more files to another law firm, Canal shall deposit in the law firm’s client’s trust account (or in trust with a bank or acceptable trustee) an amount of money sufficient to secure the law firm’s claim for payment, said amount not to exceed the sum of all outstanding invoices plus a reasonable estimate of the final invoices on said files. The law firm shall immediately discontinue work on said files and forward said files as directed by Canal and shall cooperate in the transfer of said files. Canal’s payment in trust and the law firm’s cooperation in the transfer of files are without waiver or estoppel with respect to their right to arbitrate any issue. MediationIn the event that a dispute arises with respect to this Agreement, including but not limited to the rights, obligations and duties of the parties or amounts due and payable hereunder, the parties agree to mediate their dispute prior to filing suit or engaging in any other form of dispute resolution. Either party may demand mediation, in writing, in which case representatives of both parties, with full authority to resolve the dispute, shall meet within thirty (30) days of the written demand. The parties may choose to meet without engaging the services of an outside mediator in an effort to resolve the dispute but the parties must engage the services of an independent, outside mediator prior to either party filing suit or engaging in arbitration as provided herein. The parties shall confer and agree upon an independent, outside mediator and shall evenly share the cost associated with engagement of the mediator. Each party may be represented by counsel and each side shall bear its own costs.Thank you for adhering to these guidelines when performing Canal-assigned work. If you ever have any questions or concerns regarding these matters or your firms’ business relationship with Canal, please contact the Claims Legal Manager for business relationship questions and Claims Operations Manager for Bill Review and Legal eXchange questions. We look forward to working with you. EXHIBIT ACase Assignment Letter ContentEach individual case being assigned to counsel will be accompanied by a transmittal letter that includes, but is not limited to, the following areas:SERVICE OF SUMMONS & COMPLAINT. In the event the assignment involves the defense of a suit,Copies of the summons and complaint, and any other accompanying pleadings, discovery or correspondence.The exact date and individual the suit papers were served upon.Any problems with service that the claim representative has identified.Any logistical or other problems with time to answer.PARTIESIdentification of the known party(ies) and their counsel .All material information known about the individuals including vehicle information, business address and type, main contact (if party is a business entity), etc.Description of any known relationships between the litigants.Any potential cross-claims and/or information on third-party defendants (actual/potential).COVERAGEPolicy information, including type, number, effective dates, and coverage limits.Any appropriate information on questions of coverage (reservation of rights, non-waiver, etc.) Note: in no instance will defense counsel be requested to or should they comment to Canal on issues of coverage.The availability of any known excess or additional coverages.FACTS OF THE LOSSA complete description of the known facts as of the time of assignment.Any additional information which, while not yet substantiated, may be relevant to the handling of the legal services assignment.DAMAGESAll documented information contained in the Canal claim files.Confirmation of any information requested but not yet received.Canal understanding of the alleged damages.LIABILITYCanal’s preliminary assessment of the liability of all parties involved, including any claims for indemnity or contribution.Any potential defenses Canal feels may be appropriate for this case.INVESTIGATION TO BE COMPLETEDItems Canal requests counsel to pursue and develop.Those tasks which Canal will undertake and expectations for their completionAll vendors and investigations completed must be approved in advance and in writing by Canal.LIMITED ASSIGNMENTSCanal may ask your Firm to handle certain facets of the file and not a full assignment.EXHIBIT BRequested Reporting Format(Letterhead)DATEVia Email: (claimsinfo@canal-)Assigned Canal Adjuster’s NameAddressRE:INITIAL(or Interim or Closing) Report :Canal Claim #:Insured:Case Caption:Your File #:Date of Loss:ADR/Trial Date:Jurisdiction (liberal/moderate/conservative)Initial Legal/Claims Conference Date:Next Legal/Claims Conference Date:Dear:Based upon the information we have in our possession to date, we submit the following report.EXECUTIVE SUMMARY: [Insert very brief high level summary of state of the matter, recent progress, and next steps.]Case Summary (Please keep it concise.)Summary of Relevant Facts Brief accident/incident description, ID sources. Client’s alleged role or involvement in the loss and how it is allegedly causally linked to the claimed injuries/damages (or not). Key Fact Witness list- ID each person, their age, known contact details, synopsis of their currently known version of the facts, strengths/weaknesses, source (police report, statement, affidavit, deposition). As the case develops, update this section to add info/sources re: key fact witnesses. Key Evidence list- ID each item of evidence, its location, caretaker’s contact details, importance to case and preservation/retention efforts.Other physical, forensic or other evidentiary needs, issues or concerns. Other key informationSummary of LitigationVenue - ID venue and assigned judge. Should this case be removed? If not, where will the case be tried? What is the impact of venue, if any, on liability and/or value? Can the venue be changed? Should it? Has a jury trial been demanded? If not, do we want/need to demand a jury trial? Bench trial? Explain.The parties - ID each of the parties. What is their relationship with one another? Do we have or need copies of any contracts between them? Are there others who have potential exposure, who should be named as parties? Who are they? Should we proceed to bring them into the suit at this time? How? If not now, when? Who are their insurers?Pleadings - Summarize state of pleadings and related timing or other issues.Motions - Recommended, Pending or Resolved Discovery- What discovery do you now anticipate will be needed? Required? Depositions? (of whom?) Physical examinations? Medical review? Interrogatories? Document demands? Necessary motions to compel or protect. (What needed from Canal or client?) Retention/spoliation issues.Litigation Status -(PreSuit/Pleading/WrittenDiscovery/Deposition/Dispositive Motion/ADR/Trial/PostTrial/Pending Settlement/Closed)Key DatesCritical Issues and Experts This section should identify critical liability, damages and other issues that influence risk evaluation, reserving, and the resolution of the case. Include a brief legal analysis of each critical issue. Indicate the critical issues that have been resolved via discovery and investigation and, if not resolved, indicate the preferred method of resolution and whether the issue will be resolved during the period of the current litigation plan. As the case develops, the Claim Adjuster should be updated with any critical issues that are resolved and emerging new critical issues. Critical Liability Issues: Specific theories of liability pled against each defendantSpecific defenses and mitigating factors available to counter each asserted liability theory. (jurisdiction, service, statute of limitations, fraud, affirmative defenses, statutory violations, seat belt, cell phone, other? )Potential theories of liability, contribution, indemnity or other recovery opportunities available against other parties or nonpartiesID applicable Comparative Negligence and Joint and Several Doctrine Provide potentially applicable pattern jury instructions. Expected Liability Experts:Brief overview of types of anticipated liability experts that are expected to be retained by involved parties and their expected testimony.Critical Damage Issues:Alleged facts regarding the injury/incident and damages. Identify each plaintiff and a breakdown of the damages sought or potentially awardable in the venue. Medical expenses, (please indicate plaintiff’s life expectancy, any liens and whether the venue allows reduction to present value); Past, present and future all wage or earnings Loss, including plaintiff’s pre-incident annual income (please state the assumptions in support of future losses).Non-economic damages, punitive damages and/or multiple damages, Legal basis why they apply, may be limited or are not applicableIf the case is a death case, discuss the applicable wrongful death statute and what damages are recoverable under it and who is entitled to bring the claim. Expected Damages Experts:Brief overview of the types of damage experts that you anticipate will be retained by each party and their anticipated testimony.Other Critical Issues:Any other noteworthy issues (e.g., venue, judge, plaintiff’s attorney, insurance coverage issues relating to other defendants, government regulatory considerations and public policy considerations. Evaluation Please help to define our expectations. Based upon currently known information, please provide an objective evaluation of the case, including the potential verdict value, a discussion of the insured’s liability and the likely appointment of fault. The evaluation should also include a current settlement value. The basis for the evaluation should be clearly described. All reports and conference reviews should include a specific, but brief, discussion of each of the following areas (indicate those that are not applicable):Jurisdictional, public policy or governmental regulatory considerations. Basis.Strengths and weaknesses of the insured’s case, the plaintiff’s case and any other party’s case, Joint & Several Liability, known insurance coverage for other party(ies). Basis.Current probability of success on the merits and influences thereon. Basis.Probable apportionment of fault among defendants (assign percentages). Basis.Probable damages or range (compensatory, non-compensatory, punitive) if the case is lost including Attorney’s fees and prejudgment interest and the rate, if recoverable. exposure to insured after factoring in above points.Current, realistic settlement value and basis Whether a structured settlement should be considered.Whether the case should be tried. Whether a high/low agreement is a viable option.Resolution Strategy Is this a case geared toward settlement or trial or other?Suggested (agreed or proposed revision of the) operative strategy of the casePreferred method of resolution, including the proposed or projected timing of resolution. If mediation is an objective, recommendations for proactive, hardworking, fair mediators in your area and projected costs, availability, related issues and concerns.Key litigation and claims tasks that will direct the case toward the preferred resolution, with sufficient detail to understand how proposed legal services will support that resolution.Case StaffingID the lawyers and other timekeepers of the law firm that are currently performing or will be needed to perform services during this phase of the case. If not a preapproved Canal Team member, please separately go through new timekeeper approval process and provide us with copies of their bio. NamePositionRole in this caseApproved RateClosing Comments:Signature: cc: Insured ................
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