Subrogation Shortcuts Lead To Drastically Smaller Recoveries

Litigation is rarely cheap, but it is often necessary. Nowhere is this truer than in the area of insurance subrogation, where those who resist paying subrogation claims assume that insurance companies are loath to pull the trigger and file suit and will, therefore, never pay full value on subrogation claims with even the clearest liability facts.

For decades, the insurance industry have been paying special attention to the attorneys’ fee line item in their claim department budgets and have been going to great lengths to find the perfect balance between keeping litigation fees and costs in check and maintaining high quality representation.

Insurers have turned to litigation budgets, in-house counsel, litigation management guidelines, litigation vendor databases, and law firms with lower hourly rates.

An entire litigation cost management cottage industry has sprung up and some insurers have even turned over the distasteful task of disallowing certain lawyer time entries and expenses to cost management vendors whose very existence is justified by cutting as much as possible from fee bills.