One of the first things a claims professional or attorney must do when assigned a claim is to preserve the related evidence or notify others to preserve it. If you doubt how important this is, consider this hypothetical exchange based upon actual judicial hearings between judges and defense counsel.
The plaintiff brings a motion to strike defendant's answer because the defense repaired a vehicle involved in an accident:
Judge: “Counsel, I think that the only appropriate sanction is to strike your answer and allow the plaintiff to prove up her damages.”
Counsel: “Your honor, we have pictures of the vehicle, it's just that the vehicle was repaired before anyone got notice of a claim. It was a minor accident and no one reported being injured at the scene!”
Judge: “This plaintiff is scheduling a 4 level cervical fusion and your defense is that this accident didn't cause it. Repairing the vehicle and not preserving the EDR (event data recorder) information has prejudiced her. I could exclude your expert but I’m afraid that a jury could still make an inference that the crash was insufficient to cause her severe injuries, so I’m striking your answer.”
Counsel: “But judge!”
Judge: “Next motion.”
Spoliation of evidence is the destruction or significant alteration of evidence or the failure to preserve evidence for another's use in pending or future litigation. (Williams v. Russ (2008) 167 Cal. App. 4th 1215). Spoliation destroys “fairness and justice, for it increases the risk of an erroneous decision on the merits of the underlying cause of action.” (Cedars-Sinai Medical Center v. Superior Court (1998) 18 Cal.4th 1)
In Cedars-Sinai Medical Center v. Superior Court, the California Supreme Court eliminated spoliation of evidence as a cause of action. The Court emphasized the availability of other remedies, including terminating sanctions, to punish or correct spoliation of evidence.
The way spoliation claims are handled depends on the jurisdiction. Some require the plaintiff to actually send a notice to preserve evidence and others place the burden on the defense as long as the defense knew or should have known about the potential for a claim.
Most auto claims start pretty much the same way. There is an accident between two vehicles. Each party notifies its insurance company and each investigates to some degree. Property damage is usually settled between the carriers. Cars are repaired or salvaged. In the meantime, one of the parties, usually the one not at fault, starts treatment for bodily injuries (BI). That party notifies the other party's insurance company of the BI claim perhaps saying she has neck and back pain and is being treated by a chiropractor.
Around this time, a lawyer for the claimant becomes involved. The claim does not settle and the suit is filed and served. The insurance company then has its lawyer or panel counsel defend it. The claim's file, including the investigation, is sent to the defense attorney for his use and evaluation. By the time the lawyer gets the case, some of the evidence may have already been modified or destroyed. Even after the lawyer gets the case, there is still a risk that evidence may be modified or destroyed if he does not handle it properly.
The minor accident with a soft tissue claim then takes a turn. The first set of interrogatories are sent and responded to and it is now disclosed that the plaintiff is claiming she has degenerative disc disease and the accident has caused it to become symptomatic to such an extent that she cannot work and needs to have surgery to correct it. The potential value of the claim has gone from thousands of dollars to hundreds of thousands of dollars.
The defense attorney and the claim's manager both agree that this minor, no damage auto accident could not have caused these injuries. They agree to budget $5,000 to hire an expert accident reconstructionist and a biomechanical engineer to look at all the evidence and offer an opinion on whether the accident, in terms of the force and direction of the impact, was a substantial factor in causing the plaintiff's injuries. The cars have been repaired by this time and the event data recorder (EDR) in each car has been erased over. The experts look at photos, review the police report, look at the scene, read the depositions of the parties and come up with their opinion that there was insufficient force to cause these injuries.
The plaintiff's attorney sends interrogatories and asks for all defenses to be disclosed. The defense discloses that it will claim that there is insufficient impact to cause the injuries. It is also disclosed that the vehicle has been repaired and the EDR no longer has information related to this accident. However, there are photos of the damage to each vehicle (black and white and not of very good quality) and there are repair invoices showing what was repaired.
The plaintiff's attorney gets the responses and immediately files a motion to strike the answer of the defendant for willfully destroying evidence that the defense is relying on to defeat causation. The motion indicates that the defense is going to claim that the force and direction of the impact was such that the accident could not have caused these “tragic injuries” to the plaintiff. Further, it indicates that the defendant repaired the vehicle without notifying the plaintiff's attorney and also failed to preserve the data in the EDR. Finally, it argues that simply excluding defendant's experts would not be sufficient as a sanction because the jury could still “make the mistake of finding that there was insufficient impact to cause the terrible injuries plaintiff suffered.”
The defense replies that plaintiff repaired her car as well without telling the defense. The plaintiff could have asked for the evidence to be preserved knowing that repairs were likely, that there are photos that exist and can be used, and that the experts could be deposed and that the issue goes to the weight of the experts’ testimony, not its admissibility. The defense argues that there is no evidence that the destruction was done maliciously or in an attempt to prejudice the plaintiff. The judge rules in favor of the plaintiff and strikes the answer saying, “Insurance companies know better.” At that point, the judge sets a date for the plaintiff to come to court and prove up her damages. The defense can attend but not take part.
This scenario can occur in just about any case. Striking an answer is an extreme remedy but not so extreme that it is not used by the courts. It is up to the claims manager and the defense attorney to take reasonable steps to preserve evidence and avoid this situation.
From the claims standpoint it should be standard procedure to notify the potential claimant (and attorney if there is one), that the evidence is going to be changed (i.e., repaired, destroyed) so if they want to examine it or take custody of it, they need to so advise. Likewise, the notification should alert the claimant who must also advise the claims manager if there is going to be any change to the evidence. In some cases cars or other vehicles should actually be stored to allow for their use as evidence throughout the case.
From the defense attorney's standpoint, as soon as she has been advised of the matter, she should take steps to ensure all evidence is preserved. In the initial letter to the client notifying of representation, the attorney should advise that all evidence must be preserved and should not be modified or destroyed without first contacting the attorney. In addition, the attorney should also send notification to the claimant and the attorney for the claimaint to do the same thing. Such a notification is generally referred to as a “litigation hold notification.”
There are various ranges of sanctions that courts impose for not properly preserving evidence. They range from instructions to the jury to make an adverse inference, to monetary sanctions, to excluding experts and striking answers. All of that can and should be avoided by carefully dealing with that issue from the first moment a claim is made.
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