By Frank Goldstein, Managing Partner
Fraud is an unfortunate reality in modern business, particularly for companies in banking, finance, and insurance.
I was asked to speak on the Civil Recovery process at a recent Claims and Litigation Management Alliance conference in Atlanta.
The premise appears simple. Your company has been defrauded. So you file a civil recovery suit and hope justice prevails.
Not so fast. Before pursuing civil recovery, I believe there are four core issues to assess.
1. Start with some serious soul searching and define your goal. Is it ultimately to recover the money you lost? Or do you want to send a strong message that fraudulent behavior is not to be tolerated.
Or, perhaps it’s both?
Companies new to fraud issues often feel strongly about teaching a lesson. More seasoned ones focus on the cash reimbursement, with the lesson as secondary.
2. Analyze your budget and resources. At times, the actual cost of recovery can be greater than the potential money reclaimed. Is teaching a lesson worth the cost?
3. Determine the type of case to file.
Many file lawsuits with
causes of action which require proof of intent to commit fraud – something that can be difficult to prove. Fraudsters often defend their cases by alleging negligence or incompetence and understand that “intent” is usually proved by circumstantial evidence.
4. Lastly you can consider a Civil Theft suit, in which
treble damages can be awarded. While offensive tactics are essential, anticipating the defense is also crucial. You should strongly consider the types of tactics you might encounter from the defense as compared to the strength of your own case.
Though gazing into the crystal ball will not predict outcome, proceeding through this analytical process will enhance your chances for civil recovery.
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