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Privileges and two arguments for a separation of much claims work from legal

In Corp. Counsel, March 2010 at A4, a partner at Anderson Kill discusses claims investigations by in-house counsel and two privileges. “For the work-product doctrine to apply, the investigation must be outside of standard claims handling process. For attorney-client privilege to apply, the attorney must provide legal advice and not conduct a factual investigation.” Later the partner adds: “If the matter could by handled by a layman just as easily as a lawyer, the matter may not be privileged.”

If a legal department handles claims, that is fine for coverage issues and litigation, but not fundamental fact-finding. Risk of privilege loss is only one reason why claims operations should be separate from the legal department (See my post of April 23, 2006: workers’ compensation claims that end in litigation; June 15, 2006: percentage of claims that turn into lawsuits; Aug. 5, 2005: “pre-law” groups such as claims; June 6, 2008: law department should not handle routine claims work; June 26, 2008: self insurance by large US companies has moved claims to law; March 13, 2008: Council on Ethical Billing; and Aug. 21, 2005: tension between lawyers and risk managers on notification of claims.).

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