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or years, insurers have been the target of bad-faith legal actions and judgments. These awards have resulted in significant amounts of damages, including punitive damages for sums of money reaching into the millions. Insurers have struggled at times with how to defend themselves against these types of claims. Its time for insurers to begin considering a new question: How do we show we acted in good faith in order to proactively address the potential for bad-faith claims?
the fire. In those cases, this is often the most important testimony the jury will hear. The trial judge and/or jury are considered to be the triers of facts in a case. When they weigh the evidence before them they will give consideration to a number of things including: 1 2 3 4 5 6 7 8 8 J Is the witness believable? Is the witness qualified? Are the witness notes incomplete? What is the attitude displayed? Is the witness prepared? What was the impact of the cross-examination? What is the volume or lack of volume of evidence? Is there evidence of a sloppy investigation? Is there a lack of evidence continuity (i.e., chain of custody)? Is there an issue of the integrity or contamination of evidence?
What Is Evidence?
In many cases, and in virtually all fire litigation cases, the testimony of an expert witness will be used. The expert witness is allowed to do something that no other witness can do in the case; they provide opinion testimony on the meaning of the evidence. In a fire-litigation case, the expert witness can testify as to his opinion of the cause of
When weighing the testimony and evidence, consideration will be given to the burden of proof. In a criminal court matter, the prosecuting attorney is required to prove that the defendant is guilty beyond a reasonable doubt. In a civil matter, the test is to prove that the policyholder committed or procured an intentional act by the preponderance or greater weight of the evidence. Some states require that the insurers evidence be clear and convincing, a more stringent standard. Whether it is a civil or criminal case, evidence must be presented to prove what is referred to as the Arson Triangle: Proof of an incendiary fire cause, proof of motive or some other form of connecting evidence, and proof of exclusive or ample opportunity. Note that actual proof of motive may not be required, depending upon the jurisdiction. In criminal cases, it is never an element of the crime, but may be part of the connecting evidence linking the defendant
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to the crime. In civil cases, most jurisdictions require proof of motive. In all civil cases, there must be evidence that inculpates or connects the subject to the fire. In the course of any trial, many different witnesses from both sides will offer testimony and evidence. Most of those witnesses must testify only to first-hand objective facts, but the rules of evidence allow for an expert witness to render an educated opinion. In an arson case, there could be a number of expert witnesses, including: 1 2 3 4 5 6 7 8 9 Fire scene origin-and-cause investigator Forensic accountant Chemist Metallurgist/materials scientist Fire scientist Fire protection engineer Forensic analyst Locksmith Electrical, chemical, mechanical, or structural engineer
Qualifying as an Expert
Before an expert is allowed to present testimony and offer opinions about the ultimate issues in a case, the court first will require the witness to demonstrate the requisite qualifications as an expert in that field. The witness must show some special knowledge or expertise in the field that an ordinary person does not possess. Through background, experience, and training, the witness must demonstrate that he possesses the requisite skills to be accepted as an expert by the court. When this is done, the expert may have to face challenges to their qualifications from both the opposing attorney and the trial judge. For many years, the rule in the U.S. was the so-called Frye Test. This rule was adopted by virtually every court and remained the standard for admitting expert testimony for more than 70 years. Under the Frye Test, the expert was required to show that his methods and conclusions had gained general acceptance in the specific field of his expertise. So long as the expert employed methods that were sanctioned by other experts in the field, the Frye Test could be satisfied. In 1993, the U.S. Supreme Court changed the rule. It adopted the Daubert Test, which charged trial judges with the responsibility of acting as the gatekeeper of evidence in the courtroom to ensure that experts who were testifying were using reliable
and scientifically sound methodologies. The court suggested a four-part test for judges to employ in determining whether an expert was qualified under the Daubert standard. The test included the following: 1 Has the theory or technique been tested, using appropriate standards and controls? 2 Is there a known or potential rate of error for the theory or technique? 3 Has the theory or technique been subjected to peer review by others in the field? 4 Has the theory or technique gained general acceptance and recognition by others in the field? In both civil and criminal arson cases
where the Daubert test is now the law, this has fundamentally changed the way cases are being litigated. Now, an expert testifying in an arson trial must face not only the opposing side of the case, but the judge. An experts findings and conclusions today are given more stringent scrutiny than ever before. At trial, the lawyer or district attorney offering the testimony of the expert will first outline and establish the background of the expert as shown on their curriculum vitae. This will demonstrate why the witness should be qualified as an expert by virtue of their technical expertise. The other side will be given the opportunity to cross-examine the witness on those qualifications, to suggest that the witness is not adequately trained or experienced in the field. In a Daubert ju-
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risdiction, the trial judge will challenge the witness on those qualifications in acting as the gatekeeper of expert testimony. This is often a more formidable challenge than the adverse attorneys cross-examination. A qualified fire expert also should be familiar with NFPA 921: Guide for Fire and Explosion Investigations. This is an investigative guide that was first written in 1992 and was most recently revised in 2004. It states that a fire investigation should be conducted utilizing a systematic approach, and recommends that the scientific method be employed. It also provides the appropriate component steps to accomplish a successful investigation. Perhaps the most significant component of the scientific method is the testing of an experts hypothesis about the fire. Hypothesis testing requires an examination of all known facts and a cognitive and/or experimental challenge of those facts, as well as a challenge of any possible alternative theories. Once a final hypothesis has been reached, it should include the identification of the ignition source, the first fuel ignited, and how the two came together to cause the fire. In addition, the expert should be able to offer proof that his theory has been tested and validated. In a case alleging arson, all reasonable accidental causes must be considered, analyzed, and eliminated for the hypothesis of an incendiary cause to withstand challenge.
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Although NFPA 921 is presented to be a guide to assist fire and explosion investigators, the reality is that it has become the prime document upon which any fire investigation will be scrutinized. It is widely considered to be the standard of care for fire investigators.
in that case which will be used to challenge their opinions and should know how to respond effectively to those challenges. The ultimate task of an expert is to make their opinions as fact-based and scientifically verified as possible, and to prove not only that their origin and cause opinion is correct, but that any alternative theory is incorrect. Insurers have an obligation to act in utmost good faith. The foundation for proving this is founded in the quality of your loss adjusters and the effective use and selection of experts. Being able to prove that you have a formal, defined process in place to select and maintain your approved list of experts will not only improve the quality of your decision-making, but will demonstrate to a court your commitment to fulfill your obligations to your policyholders. K Glenn Gibson is an executive general adjuster and CEO for Crawford & Company. He can be reached at glenn.gibson@crawco.ca. Joseph P. Toscano, CFI, works in fire investigation and litigation support for Chilworth Technology, Inc. He may be reached at sandkteach@aol.com. Guy E. Sandy Burnette, Jr., is an attorneyat-law for Guy E. Burnette, Jr. P.A. in Fla. He may be reached at geb@gburnette.com.
Entire contents copyright 2007 by Claims, a publication of The National Underwriter Company. All rights reserved.