Presenting Witnesses for a Bad Faith Case

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It is often remarked that at heart, trial attorneys are storytellers. While that remark contains an important grain of truth, trial attorneys work under severe constraints compared to a Balzac, Shakespeare, or Dickens. Trial attorneys don’t have freedom to create characters and stories from whole cloth but must work with the facts and characters given them, and that the rules of evidence allow to be presented in a court of law.

In insurance defense cases, the “characters” an attorney has to work with—the witnesses testifying on behalf of the company—present a series of problems that are often unique to insurance litigation. There are techniques of preparing witnesses, making effective use of their testimony, and testing the potential impact of their testimony that can help even the most experienced trial attorney be better prepared to win.

Difficulties in Working with Insurance Company Witnesses

Our research reveals a number of issues that are important to confront when preparing to present insurance company witnesses. Witnesses testifying on behalf of insurance companies present a series of problems that are often unique to insurance litigation. These issues, which are often important to confront, include the following:

The Inability to Remember What Was Said or Done

Because insurance claims handlers deal with a large number of requests, and can process a large number of claims, it is often the case that a witness can’t remember what he or she did on a particular claim.

Some witnesses take comfort in the fact that they cannot recall what happened or what they said to a policyholder. On occasion, there is no one to be found in a company that remembers what happened. Lack of a credible witness on what happened creates problems. Needless to say, jurors find the lack of recall upsetting. This is a problem that the defense counsel needs to handle in reviewing the testimony.

Insurance Companies Make Mistakes

It is not unusual in reviewing a claim to find that mistakes have been made in handling a claim. Witnesses have to be prepared to handle questions about those mistakes. Mistakes obviously create opportunities for the plaintiff counsel, but the witnesses can handle the fact that there were mistakes in a non-defensive way. In bad faith cases where mistakes have been made but jurors decide for the defense, jurors will often state that while there may have been sloppiness or ineptitude in the way the insurance company handled the claim, they don’t believe that there was dishonesty or intentional mishandling of the claim.

Resolving a Claim is a Two Way Street

In settling a claim, both the insured and the insurance company need to cooperate to resolve a claim. There is sometimes the potential threat of a bad faith lawsuit when a claim is being investigated or processed. This threat, and the feeling that the insurance company is being “set up,” can cause mistrust. These sentiments about being set up can cause problems in working with the witnesses. Resentment and anger can often show through in testifying, and become a self-fulfilling prophecy in that negative witnesses project an uncaring image for the insurance company.

The Former Employee

Due to employee turnovers and the length of time it takes for cases to get to trial, it is not uncommon in extracontractual litigation for people who handled a claim to no longer work for the company. The former employee witness presents challenges because it is more difficult to get them to focus their time and attention on the case. In addition, depending on the reasons for leaving the company, they may hold negative attitudes about the company.

When jurors are asked about the fact that a witness no longer works for the company, there is no consistent reaction or opinion. However, when witnesses are not called and the plaintiff attorney makes an issue of that, jurors often feel that the insurance company is withholding information.

The Virtues of a Minimalist Defense

Whatever methods of witness preparation you use in preparing an insurance defense, keep in mind that many jurors are predisposed to believe that insurance companies don’t care about their insured and only have eyes for a buck and the bottom line. Because witnesses on behalf of insurance companies can present the kinds of problems at outlined at the beginning of this paper, in some cases it best serves the defense to present a very minimal case. Severely limiting both the number of witnesses and the extent of their testimony can be your most effective strategy, rather than giving opportunities to the witnesses to reveal attitudes or behaviors that are damaging to your case, or to the plaintiff attorneys to attack your case themes. How can you know? Your best bet is to develop solid case themes, spend enough time with your witnesses to assess their demeanor and the nature of their testimony, and then test before you try.