› Mass tort: The secret to recovering on small water losses     › Case study: Snatching victory from the jaws of defeat     › Did you know?: Use caution when employing expert witnesses

	MASS TORT The secret to recovering on small water losses
	Water damage accounts for several billion dollars in losses to homeowners and renters annually. Among the most common in-home water-related losses are those caused by failures of plumbing supply lines, which are used to connect toilet water tank fill valves to a home’s water supply. Modern plumbing supply lines utilize a flexible hose and coupling nut to connect the hose to the toilet’s water tank. The apparatus is called a flexible supply line, and when it fails, it does so by and large due to two major causes: the degradation and bursting of the supply line’s hose, and the fracture of coupling nuts made from thermoplastic. In both cases, the failure results from a defect in the components’ design. Subrogation claims for losses caused by flexible supply line failures are often too small for insurance carriers to prosecute cost-effectively on an individual basis. For this reason, insurance carriers close many claims involving failed supply lines without any attempt to recoup losses. Further, even in instances where insurance carriers investigate and prosecute supply line failure claims, the investigations are often limited and the claims are litigated on a piecemeal basis, thereby resulting in the promulgation of inconsistent liability theories and adverse results. Developing reliably successful subrogation strategies involving flexible supply line failures requires a more comprehensive, litigation-focused aggregate approach. Handled individually, flexible supply line claims are often cost-prohibitive to pursue and susceptible to differing, inconsistent results. By grouping and investigating the claims as a mass tort, carriers can develop an investigation and litigation plan that is predicated upon uniformity and strength in numbers. Procedures can be implemented to ensure that legal teams and experts are properly vetted, physical evidence is properly secured and preserved, and theories of liability are substantively refined and applied in a consistent manner to all claims. Ultimately, the goal is to aggregate claims arising out of common product defects and respond uniformly to manufacturers’ common red-herring defenses. If properly developed and implemented, this approach will not only provide a cohesive, cost-effective approach to the prosecution of supply line claims, but it will also provide a better recipe for recoveries. This article excerpted from an upcoming article in the Subrogator magazine.

	CASE STUDY Snatching victory from the jaws of defeat
	The Stutman team recently reached a settlement of $950,000 in a case that literally was almost lost on the day of the fire. On a Saturday afternoon in June, firm founder Robert A. Stutman received a call from the client’s adjuster about a new loss that occurred that same day. The initial report was bleak because the Fire Marshal was planning to order the demolition of the building due to safety concerns. Within minutes of receiving the call, Mr. Stutman immediately formulated a game plan that would allow an investigation of the fire scene while ensuring that the fire scene was safe for investigators to examine. The firm’s New Loss Department Chair, David P. Eastlack, immediately contacted a local fire investigator who traveled to the fire scene and explained to the fire officials how they could shore up the building so that it was safe to conduct a proper fire scene examination. Subsequently, the investigators retained by the Stutman firm worked with the local fire officials to identify the cause and origin of the fire. The investigators were able to retrieve video surveillance tapes, which revealed the fire’s area of origin. The appropriate parties were placed on notice of a possible claim and a joint fire scene examination was conducted. The investigators retained by the Stutman team found that a power cord had been inadvertently left pinched beneath a piece of equipment when it was installed. As a result, a lawsuit was filed against the company responsible for installing the piece of equipment. During a litigation in which approximately twenty depositions were taken, the Stutman Litigation team was able to show that the equipment had never been moved or altered in any manner such that the original installer was responsible for placing the power cord under the machine. As a result of the adjuster’s quick referral, the Stutman team was able to snatch a victory from the jaws of defeat.

	DID YOU KNOW? Use caution when employing expert witnesses
	It is important to remember to pre-screen experts’ qualifications when deciding what expert to retain for your subrogation investigation. In some jurisdictions, experts must possess specific qualifications before they can conduct an investigation. Failure to comply with these requirements can be detrimental to your subrogation case, and in some instances, can even result in criminal convictions for the expert. Thus, it is vital to familiarize yourself with the requirements of the jurisdiction in which your subrogation case will be proceeding. One jurisdiction with such a requirement is Arkansas. §17-30-301 of the Arkansas Code requires an individual to be licensed in order to “practice engineering.” This includes consultation, investigation or evaluation that requires engineering experience or education. A.C.A. §17-30-101. This definition may include activities typically performed by experts in the subrogation investigation. Interestingly, in Arkansas, an individual who violates these provisions may be guilty of a misdemeanor and could be subjected to various penalties, including fines and/or imprisonment. A.C.A. §17-30-102. Thus, if an unauthorized person serves in an engineering capacity in a case venued in Arkansas, that person could be subject to criminal liability. Maryland is another jurisdiction with similar requirements. The Maryland Code requires licensure before engaging in the practice of engineering, but an exception is provided for unlicensed employees of professional engineers. MD Code §14-301, §14-303(a), §14-501. “Practicing engineering” has been defined to include consultation, design, evaluation, or inspections that require education, training and experience in mathematics, sciences, engineering analysis/design, etc. MD Code §14-101. This may apply to the services that experts provide during the subrogation investigation. Violating this code can result in a misdemeanor crime, as well as various fines, imprisonment or other penalties determined by the State Board for Professional Engineers. MD Code §14-508. One additional example is Illinois. Statutes in Illinois prevent unlicensed individuals from engaging in the practice of professional engineering, which includes providing consultation or investigation services that require application of engineering laws, formulae, practices, construction methods, etc. 225 ILCS 325/40, 225 ILCS 325/4(o). The activities of an expert in a subrogation action may be included in this definition. Violating these statutes can lead to a conviction of a Class A misdemeanor or Class 4 Felony, imposition of fines by the Department of Financial and Professional Regulation, as well as additional civil penalties to be paid to the Design Professionals Administration and Investigation Fund. 225 ILCS 325/39, 225 ILCS 325/42. These are just a few examples of jurisdictions with specific requirements that could impact the experts retained in subrogation investigations. It is imperative to familiarize yourself with the applicable requirements in your jurisdiction in order to avoid negative consequences, such as criminal liability on the part of the expert, but also to avoid the unnecessary expense of retaining multiple experts to fulfill the necessary requirements. The appropriate research and decision-making at the outset of the subrogation investigation can prevent unwanted negative outcomes for all.