Negotiation
While Covington has a leading national practice in insurance coverage litigation, we also recognize that litigation is not to be undertaken lightly and does not always yield the most timely, cost-effective, or favorable result. Bearing that in mind, we try to resolve coverage disputes as quickly, favorably and cost-effectively as we can. In some cases a successful insurance recovery strategy requires both a litigation and settlement track, while in many others a successful settlement can be achieved without resort to the courts. Even in the latter case, we believe that our insurance clients benefit greatly from Covington’s unparalled track record in major coverage litigation.
Our philosophy of insurance negotiation is built on a few basic tenets. First, we believe that, whenever possible, principals on both sides with appropriate settlement authority should be involved in the negotiations. This ensures that business concerns — not just litigation positions — are addressed by people who speak for the company. Second, we strive to maintain a constructive relationship with the insurers with whom we negotiate. This approach enhances our credibility and effectiveness with insurer representatives, many of whom we have worked with many times over the years. Third, we carefully ground any settlement demand in the relevant facts and the coverage law. Rather than just throwing a number on the table, we have found that our clients do best when the demand is reasonable and well documented, and when the underlying assumptions and valuation methodology are clearly spelled out.
Applying these three basic tenets, we have succeeded in resolving hundreds of coverage disputes consensually, quickly, creatively, inexpensively and, most importantly, to the satisfaction of our policyholder clients. Individually, these settlements have generated recoveries ranging in size from less than a million dollars to hundreds of millions; in the aggregate they amount to many billions of dollars. These settlements have involved many configurations of parties including complex, multi-party negotiations. We have negotiated a variety of agreements, from interim funding agreements to full policy buybacks. We have negotiated settlements for a range of liabilities and losses, including D&O and E&O liabilities, asbestos, pharmaceutical and other tort liabilities, business interruption, environmental liabilities, employment liabilities, first party property liabilities. Finally, we have concluded settlements with both domestic and overseas insurers as well as insolvent insurers and state guaranty funds.
Mediation
Because mediations are negotiations conducted with the assistance and supervision of a neutral third party, we draw on the same negotiation and advocacy skills when we participate in voluntary and court-ordered mediations of insurance coverage disputes. We have extensive experience and credibility with most of the leading mediators, and we strive to strike the right balance between an evaluative and facilitative approach depending on the needs and position of each case.
Representative Matters
- For LTV Steel, numerous settlements based on environmental liabilities resulting in more than $40 million in recoveries.
- For Dow Corning, a number of large settlements for breast implant liabilities resulting in recoveries exceeding $1 billion, obtained in negotiations conducted under the auspices of a court-appointed mediator.
- For a manufacturer of industrial equipment, D&O settlements exceeding $30 million.
- For railroad clients, scores of settlements for FELA, environmental, and employment practice claims totaling more than $150 million.
- For a number of utility companies, environmental and toxic tort settlements collectively exceeding $200 million.
- For more than a dozen asbestos defendants, asbestos settlements far in excess of $1 billion combined.
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