Co-Fiduciary Liability and, In Other News, Thoughts on the Evidentiary Status of Medical Reviewers in LTD Claims

Two small notes today that I wanted to pass on. Each stuck in my mind as the possible foundation for a substantial blog post, but I have found that once items like this start to pile up in number, it can be quicker and more useful to get them out in a shorter post. Sports columnists, like the Boston Globe’s Dan Shaughnessy, used to describe columns full of small notes that were picked up along the way with none sufficient to warrant a full column on their own, as “clearing out the attic of my mind.” If I really set out to do that, we would be here awhile, but I am limiting myself to two items today: we can call it more like “cleaning out the corner of a desk drawer of my mind,” rather than the whole attic.

One of them was this article in Planadvisor titled “Do Retirement Plan Advisers Have a Duty to ‘Rat?’” Really, how can you not read an article with that heading? Although the headline sounds like clickbait for anyone in my line of work, it is actually a substantive discussion of a real problem, namely, when, given the risks on one hand of co-fiduciary liability and, on the other hand, of losing a client, a service provider should speak out about questionable or even illegal acts by a plan sponsor. One of my favorite southerners turned New Hampshire Yankee (which is not quite the same thing as a Yankee in King Arthur’s Court, but close enough), Adam Pozek, sums up the issue in this quote from the article:

Adam Pozek, a partner at DWC ERISA Consultants in Salem, New Hampshire, says, “It varies widely depending on what type of infraction there is. No one wants the reputation of turning a client in when something small happens, but in a situation where there is outright theft, most would agree the adviser has a duty to report it.”

Pozek also says it hinges to some degree on whether the adviser is acting in a fiduciary capacity. If not, in general, the adviser has less of a responsibility legally. However, depending on what titles they hold, they may have ethical or professional standards to consider. “It’s a judgment call for advisers who are not fiduciaries,” he states.


The other item I wanted to pass along is ERISA lawyer Rob Hoskins’ post on the ERISA Board the other day on this decision from the Southern District of New York noting that medical reviewers in LTD claims are not to be treated as experts for purposes of the federal rules of evidence and that their reports, on which LTD insurers and administrators rely in deciding LTD claims, are not subject to the Daubert standards that govern expert testimony. Its worth bearing that point in mind, simply because medical reviewers in litigated LTD claims sit in something of a unique position for purposes of the rules of evidence, in that they fall somewhere in between a treating physician, whose records are often broadly admissible, and an expert retained for litigation, whose testimony is governed by Daubert and the federal rules that govern expert testimony. Neither fish nor fowl, to a certain extent, are such reviewers and their reports for these purposes, but long standing practice has established the admissibility of such reports and the weight to be given them in the context of litigation over LTD claims.
 

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