Excerpt from an Opinion/Order Michigan Department of Labor, Bureau of Workers’ Disability Compensation Case
Claim
“Plaintiff alleges continuing partial disability as a result of a work-related back injury ...”
Discussion
“There is no dispute that plaintiff sustained a work-related injury ...”
“Videotapes of plaintiff were admitted into evidence at the time of trial. They show plaintiff at work operating a hi-lo, moving pipes and getting in and out of a pickup truck and going in and about the work place. For the most part, they do not appear to show plaintiff performing strenuous physical activity. They do show him performing what appears to be normal everyday work activity.”
Findings
“Based upon a review of the entire record, I find that plaintiff has failed to sustain his burden of proving a continuing work-related partial disability. Plaintiff’s own testimony, as well as the videos offered into evidence, established that he has in essence returned to his normal job duties ...”
“Therefore, further workers’ disability compensation benefits are denied.”
WHEN
Consider authorizing surveillance when one or more of the following “red flags” presents itself:
Claimant comes in to pick up his or her compensation,
Same doctor and/or attorney used in past injury claims,
Index Bureau printout of claimant reveals significant claims’ history,
Long history of the same types of injury,
Reoccurrence of problems develop just after employee termination or before winter, union strike or workforce layoff,
Attorney’s letter of representation dated same day or shortly after the reported injury,
Claimant limps in to pick up compensation check but observed from your third floor office window walking normally across the parking lot to return to his or her car,
Claimant is never home when you phone during the day,
Complaints and disability seem out of proportion to the accident and prior injuries of this type,
Claimant’s attending physician is known to be extremely pro-plaintiff and who surfaces as the treating physician for other claimants represented by a certain personal-injury law firm,
The case involves a massive amount of money due to loss of wages/wage earning capacity claim,
Anonymous or not so anonymous tip that your “disabled” claimant is working at another job ... or on his golf swing,
Your “Sixth Sense” which you have developed after years of handling claims tells you that there is something rotten in Denmark,
You might think that an aggressive or hostile claimant is a candidate for surveillance. While true, the overly nice claimant can also be a candidate,
Employer doubts validity of injury,
Doctor-shopping.
HOW
Video recordings gathered in a passive manner and introduced as credible evidence can be extremely effective in judicial and administrative proceedings.. Private investigators, however, have been sued most frequently for various forms of intrusive behavior. When it becomes apparent to a judge or magistrate that the evidence was gathered in other than a passive manner, the evidence may be excluded. For example, wherever a claimant's residence is protected by privacy fences and/or the inside of a residence cannot be plainly viewed from a public setting, most often an investigator will taint the video recording if he or she employs measures to circumvent the claimant's reasonable expectation of privacy.
Short of litigation, video recordings have routinely aided in settlement. Adjusters, risk managers, self-insured claim reps, and/or defense counsel must take the time, however, to closely inspect the recordings in advance of trial/settlement so as to determine that there is no obvious ethical/legal problem in how the private investigator obtained the recording. Any recorded activity which appears to be unusual should be examined closely, and the investigator should be questioned about the circumstances leading up to the video recording of the activity. For instance, changing a tire in a parking lot, restacking a stack of firewood which appears to have recently collapsed, walking a significant distance from a disabled car, and any other seemingly spur-of-the-moment outdoor physical activity should be questioned. Roping (manipulating) the claimant's activities is unethical, and a video recording should be critically viewed in advance of its presentation at trial/settlement so as to understand in advance the circumstances under which the investigator obtained the recording.
Video surveillance recordings should include a representative sampling of all of the claimant's activities (activity and inactivity). In recent years, psychological claims relating to injuries have been on the rise. Extended surveillance can oftentimes aid in the evaluation of a claimed psychological impairment. Even documenting inactivity (especially social) can be beneficial in this regard.
If a large amount of video recording (one hour or more) is obtained of claimant's activities, a composite tape should be prepared from the original recording by the private investigator. This summary or composite tape should run no more than 10-15 minutes, and it should be a representative sampling of all of the activities contained on the complete recording. Many times magistrates and judges who are pressed for time will urge that a condensed version be viewed and entered into evidence along with the original full-length recording.
There is a range of options available as to how a video surveillance tape can be used most successfully in bringing a claim to a favorable conclusion.
Conducting a video surveillance and obtaining good documentation of activities inconsistent to a claim early on and then showing the tape to a treating physician and/or a physician conducting an independent medical examination can aid in claims handling.(/li>
Another tact is to provide just a portion of the recording early on in negotiations with the claimant/plaintiff's attorney.
Another alternative is to inform plaintiff's counsel that a video surveillance tape of the claimant's activities exists, and you want to depose/statementize the claimant before showing the contents of the film.
The final decision on how to use the video surveillance evidence should also include an evaluation of the personalities involved and the effectiveness of their negotiating techniques.
WHY
Surveillance video is competent and relevant evidence since it reflects a claimant's/plaintiff's conduct in a public setting and in an impartial manner. Non-party witnesses (private investigators) legally add to the relevancy and the authenticity of video evidence which is passively gathered and found to be contraindicative of a claimed physical disability.
Along with other forms of cost-containment, some insurance companies' claims departments have made surveillance a first choice for information gathering. A recent analysis of cost-containment on the part of a major carrier found that surveillance, when performed independent of other measures (i.e., IME's) netted larger savings as compared to doing surveillance in combination with other measures. Further, surveillances performed in earlier stages of claims found an even greater savings reflected by the reduction in benefits paid. (Authority - North American Insurance Company Claims Department.)
Surveillance is many times the most expensive investigative technique offered by a private investigations service. At the same time it offers the biggest potential rewards. Its effectiveness can be increased by preliminary investigation (activities checks) so that advance information/predictions of an individual's activities can be developed prior to the institution of surveillance.
Private detectives’ success rate on video surveillance has increased over the last 20 years for the following reasons:
Improved technique, better equipment, and better training.
Private detectives today are better history takers. They want to understand better why clients are referring a case to them. As often as possible, they want to review the claims’ files to understand what events have occurred, what dialog has taken place, what leads have been developed. At that point they are in a better position to develop a plan and discuss it with the client.
Another very powerful tool employed by private detectives is the pretext. They are most economical and have the potential of gathering the most information for the lowest cost. Of course, private detectives should never employ pretexts without prior approval from clients, and they should only be employed directly with the claimant when suit has not been filed. Many times pretexts help set up a surveillance plan so that it can be conducted as economically as possible and also so that there is the best potential for success.
If not much is known about an individual and/or his/her reputation, activities investigations should be conducted preliminary to surveillance. Through this work preliminary to surveillance, potential adversarial witnesses can be developed, information about business, employment, etc. can also be developed.(/li>
Improvements made by the claims’ handlers - referrals for investigation are better thought through especially with the advent of SIU’s, and the marginally fraudulent claims (those people who want to be a little bit greedy) are dealt with more effectively with improved communications and claims handling techniques.
Twenty years ago, detectives would receive an assignment from claims people with different mindsets. At that time it was an “us against them” approach - much like attitudes in law enforcement. Claims are looked at differently today by people in the insurance industry. In earlier times negative attitudes and incomplete information was used to form assumptions that fraud was present and prevalent. This created an adversarial process, poor dialog, and general destruction of rapport between claimant and claims’ handler.
Today assignments sent to private detectives contain better information to pursue, and as a result success rates are higher. Claims people are more concerned about developing a genuine relationship with those who have filed claims. In fact, claims people who are presented with a “yellow flag” (not a smoking gun of fraud) are very concerned that the investigation be discreet and go undiscovered so as not to possibly harm the relationship between the insurer and the claimant.
Recommendations for Effective Implementation of Surveillance
Consider authorizing a two-day surveillance in order to document an individual's day-to-day activities. People are creatures of habit, and within that period of time, a representative sampling of an individual's activities should be obtainable. The first day's surveillance should be longer since less is known that first day about when an individual will first leave his/her residence. Also, the surveillance should be established over a long enough period of time so as to cover the possible three work shifts; for instance, 6:00 a.m. until at least 4:00 p.m. The second day's surveillance times can be adjusted according to habits developed during the first day.
Follow-up surveillances and/or periodic spot checks should also be considered so as to show a continuing level of activity.
Covering an individual's activities on the day of a significant event such as an IME should be considered. Activities both before and after the event should be documented all in effort to show consistency/inconsistency in physical movements.
The private investigator conducting the surveillance should early on make a determination as to whether or not it is cost-effective to conduct the investigation with one or two investigators. Oftentimes in rural areas and in high traffic metro areas, it is unreasonable to expect an investigator to be able to successfully survey the subject of surveillance without going undetected and/or losing the target.
Private investigators do get caught sometimes when conducting surveillances. If a detective frequently gets caught, consideration should be given to employing another service.
Other Do's and Don'ts
When looking for a competent video surveillance investigative service, you should expect the following:
First-rate video camera equipment. Currently, Hi-8mm digital format is preferred and the most versatile. Interchangeable video camera lenses and low-light capability should be the equipment of choice. Both Sony and Canon USA produce excellent equipment in this regard.
Well-equipped surveillance vans.
Investigators should employ cellular phones and two-way radios and maintain regular contact with clients so that client decision-making can be obtained if necessary during the course of the day's surveillance.
Expenses should be planned in advance, and a realistic budget should be agreed upon in advance.
Above all, trespassing and/or intrusive surveillance methodology should be prohibited. For instance, never permit the use of electronic transmitting equipment to be clandestinely attached to a claimant’s vehicle. This is an unacceptable methodology. As with budget, methodology should be thoroughly discussed and agreed upon in advance.
Any pretexting employed should be agreed upon and approved in advance. See the following State Bar of Michigan's 1993 ethics opinion on this issue for some recent thoughts in this regard.
Surprise element is critical in pre-suit utilization.
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RI-153
January 19, 1993
SYLLABUS
A lawyer does not violate ethics rules by acquiescing in investigative activities lawfully engaged in by someone who is not employed by, retained by or associated with the lawyer.
References: MRPC 4.2, 4.3, 5.3; Upjohn v Aetna, 191 US Dist Lexis GG2; 1991 WL 490026 (WD MI, 1991).
TEXT
An insurance company frequently seeks outside counsel to defend workers' compensation claims. Some files referred to counsel are in litigation, others are referred prior to litigation being filed. Some files referred to counsel include completed investigative reports prepared by the insurance company's in-house investigation unit; in some cases the investigation may have been completed, but the report has not been written; in some cases the investigation is still in progress, or no investigation has been conducted at all.
Outside counsel has become aware that the insurance company's investigators sometimes use pretexts to determine whether claimants will exceed their alleged physical limitations. In one instance, the investigator purportedly sought directions at the retail establishment where the claimant was employed. During the course of the conversation with the claimant, the investigator stated he had found a bag of dog food in the back of the investigator's rental car, and asked whether the claimant knew anyone who would want the dog food. The claimant said he wanted the dog food, and removed it from the car. In a second instance, the investigator parked near a claimant's residence and placed a canoe on the ground near the car. The investigator knocked on the claimant's door, purportedly to use the telephone to call a family member because the canoe had fallen off the car. The claimant offered to place the canoe on the car, and was filmed doing so.
The outside counsel asks whether ethics rules apply to the conduct of the client's investigators, and whether the lawyer may use the surveillance results at trial.
The admissibility of the surveillance results is a question of law, not ethics, and therefore will not be further considered.
Whether the acts of the investigators may be imputed to the lawyer for purposes of triggering ethics rules turns upon whether the investigators can be said to have been employed, retained, or associated with the attorney. MRPC 5.3.
In Upjohn v Aetna, 191 US Dist Lexis GG2; 1991 WL 490026 (WD MI, 1991), Aetna's lawyers hired investigators to interview former employees of Upjohn to disclose more information about environmental damages that were the underlying subject matter of litigation. The magistrate had found that the investigators had failed to determine whether the former employees were represented by counsel, failed to clearly identify themselves as working for lawyers in litigation against Upjohn, and failed to adequately state the purpose of the interviews. The court upheld the magistrate's decision that the investigators misled the former employees, that if conducted by a lawyer the contacts would violate MRPC 4.3, and that through operation of MRPC 5.3, the lawyer could not accomplish the deception, intentionally or unintentionally, by hiring a nonlawyer. The evidence obtained through those contacts was excluded. The court considered Aetna's argument that the lawyer did not order, ratify or timely know of the investigators' conduct, but held that the magistrate's finding that to exonerate the investigators' conduct on that ground would render the ethical proscription in MRPC 4.3 meaningless, was not clearly erroneous or contrary to law particularly where Aetna offered no evidence demonstrating reasonable efforts to comply with MRPC 4.3.
Upjohn is clearly distinguishable from the situation under consideration here. In this inquiry the investigators were not hired, employed or retained by the lawyer, but by the insurance company. The investigators are agents of the company, not agents of the lawyer. Accordingly, they are not encompassed by the professional rules applicable to lawyers.
While this answers the specific question posed by the lawyer, a related question is whether the investigators' conduct constitutes impermissible, direct contact with the claimant. MRPC 4.2 and 4.3 state:
Rule 4.2. "In representing a client, a lawyer shall not communicate about the subject of the representation with a party whom the lawyer knows to be represented in the matter by another lawyer, unless the lawyer has the consent of the other lawyer or is authorized by law to do so."
Rule 4.3. "In dealing on behalf of a client with a person who is not represented by counsel, a lawyer shall not state or imply that the lawyer is disinterested. When the lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyer's role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding."
Both of these rules concern specific conduct by the lawyers themselves, and, as noted in Upjohn, MRPC 5.3 would also extend their application to direct agents acting on behalf of and at the direction of the lawyers. Since the investigators are not "employed by, retained by or associated with" the lawyer under MRPC 5.3, the lawyer does not violate ethics rules by acquiescing in the investigative techniques used by the company's investigators.
With respect to the subject of communication, the comments in the ABA/BNA Lawyers Manual of Professional Conduct, 71:303, are particularly relevant. It is pointed out that while the ABA Model Rule 4.2 (identical to MRPC 4.2) prohibits a lawyer from communicating directly with the opposing party, the rule does not include a prohibition against the parties speaking to one another. Further, the comment notes that the ABA had, in fact, withdrawn a former ethics opinion which had indicated that lawyers had a duty to dissuade the parties from communicating with one another.
The scenarios provided in this inquiry involve communications between parties, not between a lawyer and the opposing party. In neither scenario was the claimant persuaded or encouraged to do anything. The claimants acted in a manner that they wished and felt capable of doing.
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