By contrast, an insured interviewed over the phone by a claims handler has not been prepared, may not understand the implication of their answers, and may say one thing but mean another. Unfortunately, when a claims handler records these interviews, there are no opportunities to change an answer, qualify an answer, or explain that that’s not what the insured really meant. Once recorded, there is no going back. The recorded interview provides a plaintiff’s attorney a first crack at tripping up the insured into an admission of fault without having to lift a finger.

Harmful statements

Insureds routinely make harmful statements to your case during recorded interviews. Plaintiff’s lawyers pounce on these admissions, which are admissible in virtually every jurisdiction because they involve party opponents. In other words, whatever you hear your insured say during the recorded interview will also be heard by a jury.

Seemingly innocuous statements by your insured will be contorted by plaintiff’s attorneys and their experts to build their liability case against you. “I was going fast” will become, “Defendant was excessively speeding.” “I didn’t see anyone coming,” will become, “Defendant negligently failed to yield the right of way.”

“I took a sleeping pill last night,” will become, “Defendant was impaired on the morning of the accident.” “I only received a little training,” will become, “Defendant negligently trained its employees.”

Inaccurate estimates of speed and time can be extremely problematic in catastrophic injury and wrongful death motor vehicle cases. Accident reconstruction and human factors experts base their opinions about reaction time and accident avoidance abilities based on these imprecise estimates provided by the insured.

Taking a written statement can offer more protections than a recorded statement. (Photo: Shutterstock)

Keys to avoiding damaging statements

To avoid having to produce a damaging recorded statement of your insured, consider the following steps. First, determine whether your jurisdiction will shield discovery of recorded statements under a work product doctrine theory, in that the statements were taken in anticipation of litigation. Note, however, that some jurisdictions, like Connecticut, explicitly require “attorney involvement” in order to protect disclosure of a statement under the work product doctrine. [See Stanley Works v. New Britain Redevelopment Agency, 155 Conn. 86, 95, 230 A.2d 9 (1967).]

Second, have an attorney — in-house counsel or outside counsel — participate in these recorded interviews, which in addition to providing the necessary framework to invoke the work product doctrine in states like Connecticut, offers the additional protection from disclosure pursuant to the attorney-client privilege.

Practically speaking, use a conference call feature to have an attorney on the line who is present during the call and who can supplement the claims handler’s questions. Be aware that some courts do not shield from disclosure tasks performed by attorneys that are essentially tasks that claims handlers routinely do, such as investigative interviews. [See St. Paul Reinsurance Co., Ltd. v. Commercial Fin. Corp., 197 F.R.D. 620, 636 (N.D. Iowa 2000)] “An insurer cannot shield its entire claims investigation behind the work product privilege simply by hiring an attorney to perform what is in the ordinary course of the insurer's business.”

Taking recorded statements may increase bottom-line exposure

Third, have your attorneys themselves conduct these interviews without recording them, with an eye on not just fact-gathering, but also liability assessment. Attorney involvement will depend on a variety of considerations including the volume of claims, the types of claims, and the percentage of claims that end up in litigation.

For example, property damage claims frequently turn into personal injury claims. While a claims adjuster may not be worried when the insured concedes liability for a property damages claim, the insurer can’t escape when that same admission is at the forefront of a personal injury claim. Fourth, don’t record the interviews. Claims adjusters should consider interviewing insureds over the phone and taking notes of the calls without recording the interviews. Determine whether your notes are discoverable in non-bad faith cases.

Fifth, go off script during your interviews, especially in cases with high exposure. If you must record the interview, consider deviating from any prepared outline of questions so that you can follow up on answers and rehabilitate any damaging answers your insured provides. If your insured makes an unhelpful admission, have a set of rehabilitation questions ready that you can use to at least inject doubt as to what your insured actually meant.

In the aggregate, taking recorded statements of your insureds may increase bottom-line exposure. When taking these statements, consider that the contents may be discoverable in future litigation. For cases with obvious high exposure, consider departing from this routine practice and employing counsel from the outset to conduct these interviews.

Ben Carroll ([email protected]) is a partner in LeClairRyan’s Boston office. He focuses his civil litigation practice on defending cases involving wrongful death, catastrophic personal injury, products liability, construction accident litigation, municipal liability, and insurance coverage litigation.