Expert Witness Consulting and Its Relationship to Research, Service and Teaching
THE RHA REVIEW
Volume 16, No. 1, Fourth Quarter 2009
By William J. Warfel, Ph.D., CPCU, CLU
Oftentimes, insurance and risk management (IRM) professors are asked to serve as either a consulting or testifying expert witness in insurance litigation. Since 1997, I have been retained in about 40 cases -—primarily by insurance carriers, policyholders and insurance agents/brokers. These cases typically involve determining the existence of a breach of contract, evaluating the handling of an insurance claim (i.e., whether the insurance carrier acted in bad faith) and evaluating whether an insurance agent/broker breached his or her professional responsibility to a client. Like any competent expert witness, I have testified on behalf of both the plaintiff and defendant. Insurance contracts at issue include commercial general and umbrella liability, commercial property, commercial automobile, homeowners, personal auto, surety bond, financial institution bond, builder’s risk, and individual health and life insurance.
Naturally, university administrators and faculty may question whether expert witness work contributes to the mission of the IRM program, college of business and/or the entire institution. Such particularly is the case in view of the fact that expert witness work is lucrative. What, then, is the relationship between expert witness consulting and research, service and teaching? In short, serving as an expert witness furthers the university’s goal of creating and sharing knowledge with society.
First, a research article that you publish may catch the eyes of an attorney. After seeing my article on redlining, published in the CPCU Journal, an attorney contacted me to inquire about doing some expert witness work. The attorney represented an insurance carrier in a legal case in which the plaintiff alleged racial discrimination regarding the carrier’s underwriting practices. Although I was not retained in this particular case, this example illustrates how research is intertwined with expert witness consulting. Had I been retained, my research would have been relied upon to address a legal dispute. Agreeing to serve as an expert witness would have furthered the university’s goal that its faculty’s research be applied for the benefit of society.
Second, articles that have been published by the expert witness are sometimes referenced in a deposition. One instance was a legal case involving the interpretation of a public official bond; opposing counsel requested that I produce all articles published during the course of my professional career. In defending the plaintiff’s position, I referenced the custom and practice of inserting provisions in insurance contracts and surety bonds that serve the purpose of controlling moral hazard. Several of my articles in which this custom and practice were referenced were cited for illustrative purposes.
Third, once a legal case has been brought to resolution, depending on its nature, an article may be published based on the case, especially if a court makes a ruling on the various pertinent issues. As an example, I was retained by an insurance carrier in a legal case in which the key issue was whether the applicable builder’s risk policy constituted inland marine insurance or property insurance. The Arizona Appellate Court ruled in favor of the carrier based on its conclusion that the policy constituted inland marine insurance as opposed to property insurance. As a result, I was able to publish articles related to this case in The John Liner Review and Risk Management magazine, further contributing to the university’s goal.
Expert witness work also provides opportunities to develop relationships with various attorneys who in turn may be helpful to you. The attorney who contacted me about the aforementioned redlining legal case introduced me to his colleague, who represented the National Manufacturers Association on proposed federal legislation pertaining to asbestos litigation reform. Largely using data obtained from this attorney, I was able to publish articles addressing asbestos litigation reform in the CPCU eJournal and Risk Management magazine.
Fourth, an expert witness is often asked to review numerous documents and prepare a report or affidavit that addresses the issues in a legal case. Judges and/or attorneys rely on these reports or affidavits so that the case can be appropriately resolved. The research skills utilized in drafting the report or affidavit are essentially the same skills utilized in preparing an article for publication. An IRM professor can take advantage of highly developed research skills and apply them not only for the purpose of publishing articles but also to assist others who are involved in legal disputes.
Service at virtually all universities is defined broadly to include not only service to the school itself but also service to the general public. It extends well beyond the preparation of students to become productive members of society. Indeed, a university — especially one that relies on government funds — has an obligation to serve taxpayers in general, specifically, individual members of society, members of the business community, and local units of government. This obligation includes “loaning” a faculty member for the purpose of helping address a problem, and, given the global nature of society, should have broad application, not just in one’s home state but throughout the country and possibly farther.
Clients in various legal cases in which I was retained include: (1) an insurance agency that has historically hired graduates of the university’s IRM program and has provided support to the program in other tangible ways, (2) a prominent member of the local business community who has paid substantial state and local taxes over the years, (3) a small town that had a coverage dispute with a surety with respect to a claim that had been filed under a public official bond and (4) a middle-class homeowner who had the unpleasant experience of interacting with a rogue claims adjuster concerning a fire insurance claim.
Courses in an IRM curriculum address, among other topics, risk management concepts, requisites of an insurable exposure, and the custom and practice concerning (1) interpretation of insurance contracts and surety bonds, (2) handling of insurance and surety claims and (3) an agent’s or broker’s responsibility to a client.
First, reference to legal cases is an important tool in teaching the above items to students. For example, in one case in which an attorney who represented an insurance agent retained me, I testified that the agent was justified in not recommending that a client purchase professional liability insurance. A warehouse legal liability policy that had been secured by a broker was designed to address the loss in question. The purchase of professional liability insurance, therefore, would have resulted in unnecessary duplication of coverage. Avoidance of unnecessary duplication of coverage through the proper design of an insurance program is an important risk management concept that is taught to all IRM students.
Second, many IRM graduates pursue professional careers in sales and claims. Legal cases in which a claims representative acted in bad faith in the handling of an insurance claim or an insurance agent/broker breached his or her professional responsibility to a client remind students about the consequences of failing to meet the applicable legal standard. I recall being contacted by an attorney who represented an insurance agent who happened to be a former classmate and close friend. Due to a conflict of interest, I was not retained but did learn from my friend of his regret in failing to document several communications with the client. Of course, this lesson was relayed to students in my courses, some of whom undoubtedly will become insurance agents/brokers.
Third, serving as an expert witness helps one refine teaching skills and think in a more precise way about important insurance and risk management concepts. For example, in depositions conducted by opposing counsel, an expert witness is expected to explain clearly the application of IRM concepts to the legal case in question. Unfortunately, particularly at the undergraduate level, students often fail to challenge their IRM professors. The tragic result is that an IRM professor may become deluded into thinking that he or she has all the “right answers.” These professors may fail to study carefully the application of important IRM concepts and one day may become ineffectual.
Fourth, similar to those with CPCU designations, all professors of IRM should continually seek to maintain and improve their professional knowledge, skills and competence (Canon 2, Code of Professional Ethics of the American Institute for CPCU). Although keeping informed on technical matters relating to course content in an IRM program does not ensure success in teaching, at a bare minimum, technical proficiency is absolutely essential if one is to be an effective educator. Serving as an expert witness is one way for an IRM professor to meet the aspiration, expressed under the canon, of improving his or her professional knowledge, skills and competence.
In summary, expert witness work is fully consistent with and supports a university’s mission with respect to research, service and teaching. Although most universities do not actively discourage this kind of activity, they fail to understand and recognize the linkage between expert witness work and the university’s mission. Clearly, in failing to actively encourage IRM faculty to engage in expert witness work, a university detracts in a tacit way from its mission.
This article originally appeared in the April 2008 issue of CPCU eJournal and is reprinted with permission of the CPCU Society, Malvern, PA.