Typically, we compress the case into two 90-minute presentations, one for the insurer and one for the policyholder. (We – that is, lawyers for the policyholder – play both roles, but I haven’t found this to skew the exercise in the policyholder’s favor; we don’t tell the jurors that the lawyer playing the insurance-company’s lawyer really is a lawyer for the policyholder.) The presentations will use key documents and graphics. One of the consultants with whom I’ve worked calls what we do a “clopening”, that is, a combination of opening statement and closing argument. Essentially, we summarize and present the evidence and then argue our case. We’ll have a group of 30 to 40 people who are the audience; sometimes we make the presentation to all the jurors, and sometimes we present the case twice or three times to different juror panels (this allows us to tinker with our presentations based on the feedback from the prior mock jury).

Reflecting on the exercises I’ve participated in over the years has led me to the surprising realization that one consequence of (what I believe to be) the downward moral spiral of the insurance industry over the last couple of decades has been the lowering of expectations of jurors as to appropriate insurance company conduct. Jurors may have experienced the runaround themselves in the adjustment of their own claims, seen major price hikes in personal-lines coverage, and been flooded the stream of news of corruption in the industry (such as the broker-compensation imbroglio, the AIG mess, insurer bankruptcies, or in some states insurance commissioners being in the pocket – or trying to be – of insurance companies). I think the conventional wisdom is that juries are therefore primed to sock it to an insurance company and to cast the policyholder as a hero that in a surrogate capacity is vindicating the rights of the jurors.

No doubt that some jurors have this reaction. But I am increasingly feeling that the accumulation of years and years of insurer misconduct has browbeaten juries into submission. It is not that jurors feel that insurers are right or correct; rather, there is more of a sense that this is what you get when you buy insurance, whether you are a big guy or a little one. (One can think of this as a variant on a blame-the-victim theme.) In some ways, it may even be a relief to jurors to see companies encounter the same runarounds and hurdles that individuals deal with. None of this is to say that the insurance company is doing the right thing or is properly construing the policy or forthrightly dealing with its policyholder. Rather, misconduct now may be increasingly seen as par for the course. (The recent movie The Incredibles portrays well some of the inappropriate attitudes and approaches by insurers, where one needs an ex-superhero on your side in order to have your claim fully paid.)

The startling cynicism of some jurors – and perhaps an increasing percentage of them – has some important consequences:

1. At trial, it is crucial to establish the standards by which insurers are to be judged. The jurors must understand that both the aspirations of the insurance industry and its (best) customs and practices embrace fidelity to the interests of the insured and providing help and support in the policyholder’s time of need. The jury cannot be permitted to take the reality of current (mis) conduct and raise that to a normative standard by which to judge the insurer’s actions.

2. Long before we get to trial or litigation, the policyholder needs to be mindful that it has to set up its claim well. This means not putting things on the table simply in order to take them away and thus have something to negotiate with; that only serves to legitimize insurer nit-picking. The policyholder also must consistently provide full and detailed responses to the insurance company, demonstrating patience but also showing that the insurer is abandoning the insured and failing to discharge its obligations. (I’m not saying that policyholders should threaten bad faith at every turn but rather explain how they need the insurer’s support and are looking to the insurer for help.) Policyholders need to cross their T’s, dot their I’s, and turn square corners, or one provides the insurer with a cover for misconduct. (For some guidelines on doing this see, Mayerson, Pursuing and Perfecting Liability Insurance Coverage: A Primer for Policyholders on Complying with Notice Obligations, 32 Tort & Ins. L. J. 1003 (1997), available http://www.spriggs.com/news/pdfs/MSM-6.pdf.)

3. Insurance companies should not be heartened by all of this. In the short term, this may help insurers win trials (or the bad-faith claim) by moving the line for bad faith further out, such that bad faith is considered less to be a breach of acting in good faith and instead to require evil and malicious conduct (collapsing bad-faith liability into punitive damages). In the long run, however, a recognition by consumers and businesses that insurance really isn’t there for you when you need it most will doom the industry. What value would there be in buying insurance? On this point, see the extraordinarily thoughtful article (that also discusses past episodes of insurer shenanigans), Richard Stewart and Barbara Stewart, The Loss of the Certainty Effect, 4 Risk Management & Ins. Rev. 29 (2002), available at http://www.stewarteconomics.com/Certainty%20Effect.pdf.