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HomeMy WebLinkAbout10 O.C. RISK MGMNT. 08-06-01AGENDA REPORT MEETING DATE: AUGUST 6, 2001 400-70 NO. 10 08-06-01 TO: WILLIAM A. HUSTON, CITY MANAGER FROM: RONALD A. NAULT, FINANCE DIRECTOR SUBJECT: ADOPTION OF ORANGE COUNTY CITIES RISK MANAGEMENT AUTHORITY LITIGATION MANAGEMENT POLICIES AND PROCEDURES SUMMARY: As a member of the Orange County Cities Risk Management Authority (OCCRMA), the City of Tustin has participated in the development of the attached Litigation Management Policies and Procedures and supports their adOption by the City Council. RECOMMENDATION: By action of the City Council, adopt the Orange County Cities Risk Management Authority Litigation Management Policies and Procedures as a policy of the City of Tustin. FISCAL IMPACT: None. DISCUSSION: For approximately eighteen months the City of Tustin staff has participated in rewriting the OCCRMA JPA's by-laws and plan document. This major project was initiated by the.member agencies' City Managers, who felt that the JPA was not providing the insurance coverages necessary to protect its members. On November 6, 2000, the City Council approved the changes to the JPA Agreement and coverage plan. A major component of this process was the development and adoption of a set of Litigation Management Policies and Procedures. The City Managers also requested that OCCRMA's coverage document be amended to include coverage for a larger portion of each City's legal expenses per covered claim. After reviewing coverages provided by other insurance JPAs, it was agreed that OCCRMA should expand its coverage of members' legal expenses but members should also agree to a set of Litigation Management Policies and Procedures to protect the members' assets in the JPA. During the past eighteen months, OCCRMA staff have been working with the City Managers and legal staff of the member Cities to develop the attached set of Policies and Procedures. The Board of Directors of OCCRMA feels that these procedures address the concerns of the members by expanding the plan document's coverage of legal expenses and protecting the assets of the JPA. Lois Jeffrey and her staff made significant contributions to the development of these procedures and were one of the first firms to approve them as they are presented for your approval. Staff approved the implementation of these procedures as an OCCRMA Board Member, and recommends the City Council adopt them as a City policy to be used by our legal representation on covered claims. Ro Finance Director RAN:ts Attachment RAN:OCCRMA2001 LitigationManagementPoliciesAndProceduresStaffReport. doc Resolution No. 001001 Resolution of the Board of Directors of OCCRMA Adopting Litigation Management Policies and Procedures WHEREAS, the Board of Directors of the Orange County Cities Risk Management Authority has determined that it is in the best interests of the Authority that 'the coverage contract offered by the Authority include coverage for defense expenses; and WHEREAS, to help insure that such costs are minimized and controlled for the benefit of all members, and with the goal that such cots be equitably financed and paid, it is essential that such costs be consistently controlled and managed; and WHEREAS, all members of the Authority have a role in the management of litigation costs, NOW, THEREFORE BE IT RESOLVED' 1. The Board of Directors of the Orange County Cities Risk Management Authority hereby adopts the "Guidelines for Billing of Legal Services By Defense Counsel," (the "Guidelines") attached hereto as Exhibit A. 2. The General Manager is directed to require adherence to the Guidelines for all counsel retained by the Authority 'for the defense of any covered claim brought against a member agency (including the Authority) which is determined to be within the scope of coverage offered by the Authority and as to which the Authority is incurring defense costs. 3. Adoption of the Guidelines, and conformance with the provisions of this policy, shall be required of each Member Agency as a condition of participation in the general liability group insurance program of the Authority and reimbursement for any defense costs incurred by the Member Agency for any claim which is determined to be within the scope of coverage offered by the Authority. Defense costs which are incurred prior to the date that the case was reported to OCCRMA are not incurred in conformance with this policy and shall not be reimbursed. 4. Prior to commencing work on any claim, written acknowledgment and acceptance of this policy and the Guidelines shall be required of any law firm retained, or in- house counsel assigned to the defense of a claim by any member agency or other covered person. A copy of such written acceptance shall be submitted to the Authority prior to the commencement of any services for which compensation will be sought. The Authority shall have no obligation to reimburse any member for any work performed or costs incurred by any law firm or in-house counsel that has not acknowledged and accepted this policy and the Guidelines. 5. The Authority hereby authorizes its Litigation Manager, to oversee and implement this policy and the Guidelines on its behalf, provided that in the event any dispute arises over the implementation of the policy or the Guidelines, the matter shall be referred to the General Manager for resolution. If the matter cannot be resolved, it shall be referred to the Executive Committee for final action. The Litigation Manager shall keep the General Manager infom~ed of all significant case developments, and shall forward reports received. The Litigation Manager shall be a qualified person or firm selected by the Board or Executive Committee. 6. Each Member Agency shall authorize the Litigation Manager of the Authority, or another qualified claims management company approved by the General Manager of the Authority, as Litigation Manager, to oversee and implement the litigation management policy and the Guidelines on its behalf, provided that in the event any dispute arises over the implementation of the policy or the Guidelines, the matter shall be referred to the City Manager or other decision-maker on behalf of the Member Agency. required to: e In addition to complying with the Guidelines, all defense counsel shall be A. Identify to the Litigation Manager who will be working on the case and the role of each attorney identified. Personnel assigned to the "team" shall be qualified to perform the work expected to be assigned in the judgement of the attorney and the Litigation Manager. The work of others on the case, not on the "team" shall not be billed without prior approval by the Litigation Manager. If changes are made to the members of the team, time spent bringing new members up to speed on the case should not be billed without prior approval. Billing rates shall be agreed to in advance for all team members. B. At the beginning of the case, provide to the Litigation Manager a summary of the legal issues presented, a litigation budget, an evaluation of liability and the potential for settlement or other resolution, in the form reasonably requested by the Litigation Manager. C. Provide the Litigation Manager with periodic updates, updating the counsel's evaluation of the case, and the budget, if necessary, every 90 days and whenever there are significant developments in the case. D. Obtain approval of the Litigation Manager for depositions to be taken, retention of experts, and other activities in accordance with the Guidelines. E. An analysis should be provided to the Litigation Manager in advance of any settlement conference, arbitration, mediation or trial of the posture of the case, pros and cons of proceeding, piobability of an adverse result, and likely range of the award or verdict. F. After trial or settlement, provide an evaluation of the case to the Litigation Manager, including the attorneys' own performance, and prospects for appeal. PASSED, APPROVED AND ADOPTED at a regular meeting of the Board held on the 19th day of October, 2000 by the following vote, to wit: AYES: 9 NOES: 0 ABSENT: 2 ABSTAIN: 0 ATTEST: Secretary EXHIBIT A ORANGE COUNTY CITIES RISK MANAGEMENT AUTHORITY GUIDELINES FOR BILLING OF LEGAL SERVICES BY DEFENSE COUNSEL POLICY Actual and reasonable time will be paid for negotiated attorney fees. Billing will include a full description of services provided along with a clear explanation of the purpose of the work performed. No expenses considered to be overhead will be charged. Reasonable expenses will be reimbursed with proper documentation. PURPOSE To establish consistent billing guidelines for defense counsel which are equitable. BILLING PROCEDURES . Frequency of billing: Billings will be submitted monthly and no more than 20 days in arrears. All billings will be for~varded to the following address for approval and payment' Alex Barrios Carl Warren & Company P.O. Box 25180 Santa Ana, CA 92799-5180 e Billing increment: The minimum billing increment is .10 of an hour. e Billing information: All bills will contain the following information: a. Case name b. Carl Warren claim number c. Dates of service d. Full description of services page I e. Attorney or other person providing services Billing rate for each person providing service g. Actual time spent by each person on each activity h. Itemized list of disbursements and totals Total fees and expenses on current invoice Cumulative costs since inception k. Amounts paid to date and current outstanding balance. Se Description of work performed by each individual: Each legal activity must be clearly defined. Vague descriptions of services which do not describe the precise nature of the work performed will not be paid. Vague descriptions, include, but are not limited to the following: · Research · Strategy · Analysis · Discovery · Conference · Preparation · Review Examples of detailed descriptions include, but are not limited to the following: The identity of participant(s), what was discussed and purpose (telephone calls, correspondence, meetings) The purpose of a court hearing/conference, and name(s) of attendees The identity of each deponent/interviewee The purpose of extensive review of transcripts (deposition or trial) The specific issue researched The specific non-deposition discovery worked on and the nature of the work performed The specific trial preparation performed page 2 Se e ge o 10. 11. 12. 13. The specific motion worked on and the nature of the work performed The identity of material/documents reviewed Block billing: Multiple activities lumped together will not be paid. Each activity must be shown and charged for separately. Time entries should be grouped only where activity takes less than one tenth of an hour, and grouping is necessary to avoid minimum increment billing. Value billing or task specific flat charges' No minimum time mounts should be allocated to any particular task. All task entries should reflect the actual amount of time spent performing such tasks. Excessive time' All motions exceeding 8 hours require prior approval. The Litigation Manager must be contacted before proceeding with demurrers, motions for summary judgement, and any other motions for which significant research and preparation time will be required, or which can seriously impact the direction of a case. The time to summarize discovery and depositions, and prepare correspondence must also be reasonable when compared to the content and purpose. Quarterly Summaries' No more than one-half hour per case for this summary should be billed without prior approval. Normally, less than one-half hour will be required. Apportioning time' When work is performed on a number of matters in addition to the case being billed, only that portion of time actually spent on the claim should be billed. Such situations often arise during delays at court appearances, and other situations where delays are unavoidable. Reimbursement of cost items' Expenses under $1,000 will be paid by the law firm and included in the monthly billings for reimbursement. Approval for deposition and experts must be obtained in advance. Actual receipts for expenses over $25 must accompany the request for reimbursement. Reasonable costs will be reimbursed at the actual cost, with no markup. Each expense must be itemized to determine the exact nature, purpose and necessity of expense. Record of timekeeper: The original records of the timekeeper should be maintained and will occasionally be requested. The bill should reflect the actual time as recorded by the timekeeper, unless the time is excessive, and therefore lowered. Any increased time over the timekeepers original record should not occur. Increases, on an exception basis, must be documented and justified. Preparation of invoices' Preparation of invoices, review by attorney, and negotiating billing questions are considered overhead and shall not to be charged separately. page 3 14. 15. 16. Review of bill: The supervising attorney should review the bill before it is finalized. No bill should be increased without documentation and justification. Interest charges' Undisputed invoices in the required format will be promptly processed. Interest will not be paid for any late payment of fees or disbursements. Rate increases' Rate increases will only be paid if approved in advance and in writing. TRAVEL EXPENSES Travel time: Travel time by automobile will be compensated at the full hourly rate when work cannot be performed. Travel time by airplane will be compensated at one-half the hourly rate, however, when work is performed on our behalf on the airplane, travel time will be reimbursed at the full hourly rate. No billing should occur during time working for other clients. o Out of town travel: Out of town travel must be .approved in advance. Each expense must be separately identified with the amount and date incurred, and receipts for all items over $10 must be provided. Travel expenses must be apportioned between all clients, based on time billed to each client. The following items will be reimbursed: a~ Airfare: Coach or economy rate will be paid. Airline vouchers must be submitted for reimbursement. b. Hotels' Moderately priced hotels will be reimbursed, and if available, hotels providing discounts should be requested. Meals: Charges must be reasonable. d~ Rental Cars: Intermediate class cars will be reimbursed. Rental cars must be refueled prior to returning to the rental agency. Insurance coverage is not payable. ee Personal Items: Toiletries, laundry service, in-room movies and other personal services will not be paid. STAFFING le Attorney assignment: Assignments will be made to attorneys with the appropriate level of expertise. Requests not to assign a specific attorney will be honored. page 4 e Attorney billable hours' Only those tasks actually performed by an attorney will be billed at attorney rates. All work will be performed at the appropriate level. Improper staffing assignments are not payable. e Multiple staff More than one attorney will not be paid for doing any task, including appearances at court, depositions, trials, and reviewing and analyzing documentation and legal research. Exceptions must be approved in advance. o In-firm conferencing: Time for administrative and supervisory conferences will not be paid. Exception will be the time of the senior attorney and associate attorney participating in the conference if the meeting is necessary to some significant legal event, such as an upcoming trial. Billing entries must include the subject and purpose of internal conferences 0 Change in attorney assignment' The time required for a new attorney to become familiar with a claim due to reassignment of work from one attorney to another in the firm will not be paid, unless the change is at our request. Gl Paralegal' Paralegals should be used for those aspects of a law suit, such as page/line deposition summaries and medical records summaries which do not have to be performed by an attorney. Assignment to a paralegal should not result in duplicative reworking by an attorney. Paralegals will not be paid for performing clerical work. e Appropriate Staffing: Clerical work performed by fee generating personnel or paralegal work performed by attorneys will not be paid. RESEARCH Routine research: Routine or elementary legal research, including issues considered to be common knowledge among reasonably experienced counsel will not be paid. 2~ Updating work product: Prior research completed for other matters or files will not be paid. Only that portion of the actual time spent on research that updates the work product will be paid. e Authorization of research: Research in excess of five hours must be approved in advance. Exceptions must be authorized in advance. e LEXIS/WESTLAW or other on-line services: Only the actual cost of computerized legal research will be paid. page 5 OVERHEAD EXPENSES NOT BILLABLE The following are examples of expenses that are considered overhead and included in the attorney's hourly billing rates. A separate charge for these items is not billable' le Administrative fees or percentages' Only actual time will be charged with no percentage markups or increases. e Non-attorney/Non-paralegal staff: Work performed by staff, including library staff and file clerks, etc. will not be billed. Exceptions must be authorized in advance. , Clerical work: All clerical work, including clerical work performed by fee generating personnel will not be billed. e Word Processing Se Preparation of bill' Preparation, review and resolving billing questions is not billable. Ge Internal delivery/courier: Internal services will not be paid unless necessary and less costly than outside services. Standard mail should be used whenever possible. e Summer Associates/Summer Interns .8. Trial preparation when trial is not imminent e Page/line summaries of depositions' if trial or use is imminent. With prior approval, summaries will only be paid 10. Correcting work: Proofreading, editing and correcting substandard work product will not be paid. 11. Organizing files 12. Opening files: The administrative process involved with opening or closing files will not be paid. 13. Training and education 14. Staff supervision 15. Ordering medical records and other documents 16. Document stamping page 6 17. Arranging travel accommodations 18. Staff overtime charges 19. Local telephone charges 20. Ordinary postage 21. Publications and books 22. Office supplies 23. Software 24. Rental equipment 25. Conference rooms 26. Refreshments and entertainment BILLABLE EXPENSES le Photocopying: Reimbursement will be at actual cost not to exceed 10 cents per page. Discretion should be used in the number of photocopies made. An outside copy service should be used whenever cost-effective. Substantial copying projects should be competitively bid. Bills must provide the number of copies, per page rate and total amount. e Certified/Registered mail: Charges will be billed at actual cost and should be used with discretion. e Facsimile: The actual cost not to exceed $1 per page for sending will be reimbursed. There will be no charge for receiving. e Long Distance Telephone' The actual cost of long distance calls will be paid. Local calls will not be reimbursed. EXCEPTIONS Any exceptions to the guidelines must be approved in advance in writing by Carl Warren. Member Cities may also have additional requirements that will be attached to these guidelines. Finallitmggd page 7 FOLEY LARDNER ATTO R NE Y S AT LAW 402 W. BROADWAY, 2-3RD FLOOR SAN DIEGO, CALIFORNIA 92_ I 0 I -3542_ , TELEPHONE: (619) 2_34-6655 FACSIMILE: (6 Icg) 234-35 I 0 WRITER'S DIRECT LiNE (619) 685-6426 RECEIVED JUL I I FINANCE DEPT'. MEMORANDUM TO' FROM: CC: OCCRMA Member Cities Gregory V./~~eral Counsel Janet Kiser, General Manager , DATE' June 18, 2001 RE: CLIENT-MATTER NUMBER 165505-01 oo Compliance with OCCRMA Policy Regarding Litigation Management We recently requested that you notify the General Manager of the Orange County Cities Risk Management Authority (OCCRMA) that your agency has approved and is implementing the litigation .management guidelines which OCCRMA has adopted. The purpose of this memorandum is to simplify your response to this ~equest. Please sign and return this memorandum to Janet Kiser, the OCCRMA General Manager., indicating that your agency has approved and implemented the litigation management guidelines, as approved by the Board of Directors of OCCRMA. As noted in our prior communication, the guidelines are designed to reduce the. overall defense costs of the members and OCCRMA. They provide for management of claims and control over billing practices of defense counsel. Adoption of OCCRMA's guidelines is a condition of participation in OCCRMA's general liability group insurance program.. In addition, the OCCRMA will not reimburse a city for any defense costs, that might otherwise be covered, if the city has not adopted and enforced the guidelines. Yes, the City of has adopted the litigation management guidelines approved by OCCRMA and is currently implementing them. Date' . By: 017.169316.2