Eliminate false claims at the start, reduce claims payouts at the end; all you need are the right eDiscovery tools.
As the coronavirus pandemic continues to hobble the economy and squeeze profits for companies of nearly every size, managers seek ways to reduce claims payouts associated with litigation while executives review all operational and administrative expenses.
Given the current financial climate and steady increase in the cost of litigation, claims managers trying to reduce claims payouts have their work cut out for them. The median cost of litigation for businesses in the U.S. skyrocketed 25% in 2019 to $1.5 million, according to Norton Rose Fulbright’s annual litigation trends report. The international law firm reported that “more organizations than ever before anticipate dispute volume to rise” this year.
As legal costs escalate, claims managers focus on various areas, including eDiscovery services, in their attempts to cut expenses and reduce claims payouts to litigants. Experienced claims professionals know that a centralized eDiscovery provider can be a key partner in helping realize those goals. A qualified provider can help reduce the material costs of the discovery process through innovative approaches and offerings, including remote collections, advanced machine learning, social media investigations and more.
By proactively working with their legal teams, claims managers can capitalize on eDiscovery services to curb ESI data collection and processing expenses and thereby reduce claims payouts. Here’s how savvy claims executives are doing it:
1. Leverage eDiscovery data collection tools to reduce claims payouts
Over-collecting ESI is often a leading cause of runaway eDiscovery costs. These days, ESI must be collected from a growing number of sources, including physical and cloud servers, desktop and laptop computer hard drives, tablets, mobile phones, email and multiple social media platforms. Further complicating the process is the need to collect data in varying formats (Docx, PDF and ODT, for example) and from different company departments (such as Accounting, Human Resources, IT, Legal and Sales).
Minimizing data collection costs is not as daunting as it seems. By implementing and following clearly written data collection policies and procedures, and by utilizing the latest developments in remote data collection technologies, eDiscovery managers can minimize the amount of data collected, which in turn will reduce the costs to process, host and review that data.
2. Use eDiscovery analytics and machine learning technologies to lower costs
One of the most effective ways to reduce eDiscovery costs is with up-to-date data analytics technology that efficiently analyzes and organizes data (not just reduces its volume), thereby substantially cutting the time attorneys spend reviewing that data. Superior machine learning platforms can significantly reduce the amount of ESI that needs to be reviewed by the legal team.
Advanced analytics and machine learning solutions, especially when driven by experienced experts, can handle everything from the more routine tasks, like elimination of exact and near duplicates, assembly of email threads and advanced search and concept filtering, to the more sophisticated machine learning and predictive coding processes that help automate attorney document review. When utilized correctly, these technologies can drastically cut the costliest part of any discovery process.
Claims managers should confirm that their eDiscovery vendor’s solutions are: 1) able to handle the organization’s varying cases; 2) using the latest technology to secure confidential data; and 3) legally defensible.
3. Outsource document review to a dedicated team
Considering the vast and ever-increasing amounts of data in daily life, it’s not surprising to see discovery costs soar as well. As data volumes grow, so does the necessity to leverage the most modern business concepts of well-defined, repeatable and efficient workflows to help meet that challenge.
To best reduce claims payouts, claims managers should seek a provider with a team dedicated to creating such efficient, effective and defensible review processes. The typical law firm or temporary contractor staffing model is often ad hoc and much more expensive than an outsourced dedicated review model. Not only does an outsourced dedicated review model save claims managers an enormous amount of ramp-up time with each new case, but it also saves substantial costs. Additionally, moving from the traditional law firm-centric billable hour model to a per-doc pricing model for document review projects can allow claims professionals to better predict costs up-front and avoid unknown or hidden soft costs associated with the hourly model.
4. Install policies to reduce data storage fees
The cost of data storage easily can increase, especially when no one is paying close attention. Legal teams, whether in-house or outside counsel, often err on the side of caution and retain much more ESI than is relevant to a case, thus adding to the overall storage costs.
Corporate eDiscovery teams should consider nearline or archive storage (storage that’s not immediately available but can be quickly brought back online) for ESI that is not directly being used in a case. Nearline storage costs are lower, and the data is easily accessible should you need it in the future.
If cases are no longer active, the organization’s eDiscovery team should have policies and procedures in place to hibernate data and limit access to key personnel. Fees for archived data are usually a fraction of the cost of live system storage.
5. Utilize social media investigations to quickly nullify false claims
By now we all are accustomed to people oversharing their lives and thoughts on an ever-growing list of social media platforms. While that might not matter for many, when it comes to legal claims, these abundant offerings of personal information could help you quickly spot and eliminate false claims before a case even begins, or reduce claims payouts later down the road.
Whether it be a personal injury, harassment, worker compensation or other such claim, what the claimant (or their friends and family) post to their social media accounts might contain the smoking gun to quickly close the case in your favor. You might find that an employee who claimed a work injury posted photos from a night out dancing and clubbing with friends, for example. Those types of clear contradictions can help get you not only reach a settlement but potentially seek repayment of costs as well.
Unlike many steps in a litigation process, social media investigations can be done quickly and at a remarkably low cost, especially when compared to the overall costs of fully defending the claims. Using just a few key pieces of information, and often for a few thousand dollars, an experienced investigator can generate a report that could end the case before it gets off the ground. Indeed, of all eDiscovery tools you can use to reduce claims payouts, social media investigations have the clearest and quickest return on investment potential.
The scope, variety and capabilities of eDiscovery services has exploded over the past several years due to dramatically improved, user-friendly information technology applications and distributed storage. Long before that explosion, nearly twenty years ago, BIA started building our tool belt. Whether it’s advanced analytics, document review (English and foreign language), social media investigations, or any number of eDiscovery tools not mentioned in this post, to quote our friends at Staples®: “Yeah, we’ve got that.”
If you’re a claims manager, we can help you reduce claims payouts and control litigation costs by providing the tools your lawyers need to achieve legal success for the company, so please don’t hesitate to reach out today.