Are a Company’s Loss Reserve Amounts Protected by the Opinion Work Product Doctrine?

April 19, 2006

Insurance companies and insureds must sometimes set reserves for litigation. Although this is in essence a business process, the assessment of what a case is worth might involve a legal judgment — and obviously would not have been undertaken but for the litigation or anticipated litigation.

Courts disagree about the protections that might cover such reserve information. In Rhodes v. AIG Domestic Claims, Inc., No. 05-1306-BLS2, 2006 Mass. Super. LEXIS 19, at *38 (Mass. Super. Ct. Jan. 23, 2006), a Massachusetts state court held that “when the reserve is set during or in anticipation of litigation, it falls within the rubric of opinion work product.” About two weeks later, another court reached the same conclusion. Bondex Int’l, Inc. v. Hartford Accident & Indem. Co., No. 1:03CV1322, 2006 U.S. Dist. LEXIS 6044 (N.D. Ohio Feb. 14, 2006). About two weeks after that, another court held just the opposite — finding such reserve information unprotected by the attorney-client privilege or the work product doctrine. Ryan v. Nat’l Union Fire Ins. Co., No. 3:03-CV-00644 (CFD), 2006 U.S. Dist. LEXIS 7366 (D. Conn. Feb. 28, 2006).

There is not much that a company can do to bolster the protections for reserve figures, so the uncertain work product protection makes relevancy the main battleground for such figures.