Litigation Metrics

• Our firm has seen a 5% increase in terms of overall cycle time, but a rather flat trend on fees per case between 2015 and 2018.
• We reduced our legal fees per case by almost 3% over the last three years. While personal line auto remains our AOL with the highest number of trials, we recognize that over 96% of matters referred to our attention will resolve without trial.
• Perhaps as an indicator of the reality of the exploding verdict phenomenon, we have seen a nearly 23% increase on average indemnity per case over the last three years. This includes double-digit increases in average indemnity per case even in the normally conservative venues of North Carolina and Tennessee. We believe the increase in indemnity is in line with national trends, but we are not satisfied to simply accept that increase. As a firm, we are striving to be aggressive on upfront investigation, allowing us to either find some information that may help keep the value down, or, if that information is not found, enable us to get to a place where resolution is a possibility at an earlier point in litigation. This continues to be a goal for our litigation teams.
• In terms of our staffing, we are proud of the utilization of paralegals. Over a four-year period, for example, our North Carolina teams utilized paralegals for over 40% of all time billed in personal line auto matters. Some of our lawyers who joined us from other firms have successfully embraced our processes, which is evidenced by a nearly 10% increase in paralegal time in Tennessee from 2016 through 2018 and a 7% increase in paralegal time in our Georgia office on this AOL.

• Our commercial auto trends are similar to personal line auto trends. Our trucking trends seem to be in line with our commercial auto. While our average fee per case on commercial auto is higher than a personal line auto case, the trends over a three to four-year period are very similar. When it comes to commercial auto and trucking cases, we have seen a steady metric on fees per case over the last three years.
• While the Reptile Theory is very prominent in commercial auto cases, we are proud to have seen over a 10% reduction in time spent in discovery (L300s) on our commercial auto cases over the last two years. In jurisdictions where possible, we have utilized tools at our disposal by way of the court system to help curtail cycle time and fees. The use of scheduling orders where possible is a great investment for defendants to use. In many of our states, the court has a very vanilla scheduling order, but lawyers are given the opportunity to develop a much more in-depth order. We take advantage of that where possible, as that allows us to do things like staggering or phasing depositions and deadlines. This enables us to go in and take the key depositions and get to a mediation on cases where appropriate.

The indemnity per case has remained stagnant on the professional liability front.

From 2016 to 2018, we have seen a 30% decrease in time per matter that a partner has performed, a 30% increase in time performed by a paralegal and a nearly 2.5 times (250%) increase in utilization of associates on professional liability cases.

As currently constructed, our premises AOL contains both traditional slip-and-fall cases, as well as negligent security matters when defending a property owner or security company. We will be tracking our premises liability data in greater detail, as, in our opinion, breaking up this AOL internally is important, as there has been a rise in the negligent security cases in several of our jurisdictions. For example, Georgia and South Carolina have had some very volatile results in these negligent security cases. Mississippi has also had a number of unexpected results, though, surprisingly, we have received some help from the great state of Mississippi in some recent law on negligent security matters.

With the explanation that our premises AOL includes both traditional slip-and-fall cases and negligent security cases, the following are key trends that we have identified within this AOL:

• We have seen a reduction of approximately five percent concerning our overall firm cycle time on premises liability cases. That reduction is even greater in North Carolina and Tennessee, where prevailing on a traditional slip-and-fall case is quite difficult.
• With the belief that most of this is attributable to slip-and-fall cases rather than negligent security cases, our firm has seen a trend in cases closed showing over a 15% drop in indemnity per premises case from 2016 to 2018. In South Carolina and North Carolina, the metric goes the other way, with the average indemnity case in those two states on the rise.
• We have also noted a decrease annually from 2016 to 2018 in our legal fees per case within this AOL.
• Overall, when comparing the 2016 fee per case to the 2018 fee per case in premises liability matters, the firm has seen an over 20% reduction in these cases. Tennessee alone has reduced their average fee per case on this AOL by almost 30% over the three-year period. Again, we attribute this success to better utilization of various staff available at MGC, as, between 2015 and 2018, we had a six percent reduction in partner time per case, coupled with a nine percent increase in associate time and a five percent increase in paralegal time. Efficient and qualified staffing remains one of the best tools available to defense firms to deliver a cost-effective product.

Nationally, the increase and danger of additional insured claims arising out of construction contracts has had a direct impact on the underlying construction defect litigation. In many instances, subcontractors brought into the litigation by the the general contractor are unable to reach reasonable settlements despite a lack of clear and assignable indemnity. This is because to many uphill contractors, the additional insured claim is worth significantly more than the indemnity claim for which the downhill contracted has been added to the litigation.

• In part because of the rise of AI litigation, we have seen an increase in our cycle time in construction defect litigation. Over the last four years, our cycle time has gone up approximately eight percent. Interestingly, despite the increased cycle time, we have seen our average fee per case remain fairly stagnant, with a less than two percent change in our fee per case year over year. Over two-thirds of our firm’s construction defect litigation is in the hotspot of South Carolina, with Charleston as the focus.

South Carolina’s coast is seeing record numbers of construction defect lawsuits being filed by plaintiffs’ attorneys, with the Charleston area seeing the largest number based on a combination of the economic boom and the influx of new residents relocating from outside the state. Plaintiffs’ attorneys are also becoming more aggressive on marketing HOA boards and property management companies. A few trends we have noticed relating to cycle time are mentioned below.

• The length of time it takes for a case to get to trial is increasing. When a lawsuit is first filed, defendants, including the architect, general contractors and perhaps a few subcontractors, are named. As written discovery progresses, additional parties are named, ultimately amending the pleadings and delaying trial by 180 days each time a party is added. State court trial judges also regularly agree to multiple Scheduling Order amendments, pushing the trial date further out.
• Additional insured claims have also attributed to a recent increase in cycle time, as AI claims are now regularly used by general contractors as leverage against subcontractors and the subcontractors’ carriers.
• Another recent trend we have seen is some general contractors filing Declaratory Judgment actions against subcontractors’ carriers for AI status while the underlying defect case is pending, delaying the ability to resolve the underlying case.
• Over the past five years, the trend has gone toward the need for multiple mediations to resolve cases, with a settlement rarely reached at the first mediation. Plaintiffs’ attorneys are a catalyst to this growing issue, with a refusal to give “global” settlement demands.

Although these issues have increased cycle times, our focus remains on keeping costs down and protecting our clients by analyzing the issues at an early stage in the litigation process, evaluating our client’s exposure as soon as possible and determining a strategy for resolving our client’s case as quickly and efficiently in order to protect our client and save our carrier as much in defense costs as we can. By settling early, clients also have the ability to stop the AI claim before it gets started or reaches a point with no easy resolution. We do not anticipate that the range it will take to settle to decrease as the case progresses, and the Court’s hesitancy to grant dispositive motions results in no motivation to remain in a case longer than absolutely necessary.

While we are seeing Reptile Theory tactics in almost all of the areas of law that MGC covers, product liability and trucking seem to be the two AOLs that we see at the highest percentage. As reptile tactics have entered into the product liability stream, and as exploding verdicts have hit a number of manufacturers around the country, that trend seems to be consistent in our covered states. We have more time in discovery in product liability matters than any other area of law for the firm. The extent of discovery in these matters drives both cycle time and cost of defense.

• Cycle time remained stagnant from 2015 to 2018, with only a slight increase (less than three percent) in our fees per case.
• However, we have seen a rather dramatic rise in product liability cases on average indemnity per matter. Our products team continues to focus on how we may curtail that discovery spend without harming the overall value of the case as that appears to be an area where possible improvement exists. Staggered deadlines and phased discovery is one way to try and reduce our time in the L300s.

If you have an interest in other trends that we have seen as a firm in other areas of law, please reach out to us. Our trucking/transportation AOL is separate from our commercial auto, though the numbers are fairly similar. We have some first-party data as well, ranging from coverage opinions to fraud-related investigations to bad faith litigation. In looking at that data, there do not appear to be any dramatic trends other than it looks as if we are taking EUOs and shutting down SIU/fraud-related cases at an improved rate over the last three years.