Ethical Use of Social Media in Claim Investigations

Transcription

1 Ethical Use of Social Media in Claim Investigations Dan D. Kohane Hurwitz & Fine, P.C Liberty Building Buffalo, NY (716)

2 Dan D. Kohane of Hurwitz & Fine PC in Buffalo, New York, is a nationally recognized insurance coverage counselor who serves as an expert witness, conducts training, consultation and in-house seminars on this highly specialized practice. Mr. Kohane produces Coverage Pointers, a dynamic bi-weekly e-newsletter summarizing important insurance coverage decisions in New York state courts with overviews of other jurisdictions. The author extends thanks to Theodore Joerge, a 2L at the University of Buffalo Law School, for his contributions to this paper.

3 Ethical Use of Social Media in Claim Investigations Table of Contents I. Introduction II. The Legal and Ethical Limitations on Legal Professionals Conducting Social Media Discovery A. The Legal and Ethical Limitations on Legal Professionals Conducting Informal Social Media Discovery Public Information B. The Legal and Ethical Limitations on Legal Professionals Conducting Informal Social Media Discovery Private Information C. The Legal and Ethical Limitations on Legal Professionals Conducting Informal Social Media Discovery Contact with Represented Parties D. The Legal and Ethical Limitations on Legal Professionals Conducting Formal Social Media Discovery III. The Legal and Ethical Limitations on Insurance Professionals Conducting Informal Social Media Investigation A. The Legal and Ethical Limitations on Insurance Professionals Conducting Informal Social Media Investigation Insurance Professional as Independent Investigator B. The Legal and Ethical Limitations on Insurance Professionals Conducting Informal Social Media Investigation Insurance Professional as an Agent of a Legal Professional IV. Conclusion Endnotes Ethical Use of Social Media in Claim Investigations Kohane 243

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5 Ethical Use of Social Media in Claim Investigations I. Introduction The adoption rate and growth of social media today is simply astounding. Placed into perspective, it took radio thirty-eight years to reach 50 million people, but social media was able to surpass that figure in a matter of mere months. 1 Today, over 900 million people worldwide are Facebook users, and its members upload over 30 billion separate pieces of content each month. 2 Additionally, two-thirds of the American adult population has a presence on a social networking platform. 3 Therefore, it is of no surprise that social media has found its way into the legal and insurance claims investigation. The progressive evolution of social media and the exponential growth of user-generated content have created a new avenue of research for attorneys and insurance investigators alike. However, this seemingly overnight expansion of social media has legal and insurance professionals questioning where the legal and ethical lines for research lay. Unfortunately, neither statute nor common law has provided a clear answer in these seemingly uncharted waters. Although informal discovery can readily provide the desired information, it can potentially lead legal and insurance professionals astray if conducted incorrectly. 4 This article will attempt to clarify limitations legal and insurance professionals face when conducting an investigation into the digital treasure trove of incriminating photos and online admissions social media has to offer. II. The Legal and Ethical Limitations on Legal Professionals Conducting Social Media Discovery Courts generally agree there is no privacy interest in content uploaded to social media websites, whether the user has privacy settings or not, because the information posted on these sites is intended to be shared with someone. 5 However, legal professionals must tread carefully in their pursuit of social media discovery, because reckless and over-zealous research tactics may violate their respective State ethical rules. 6 The manner in which information is available on the social media website plays a determining factor into what research conduct is permissible, and into the methods in which a legal professional may obtain information uploaded by the adverse claimant. A. The Legal and Ethical Limitations on Legal Professionals Conducting Informal Social Media Discovery Public Information There are currently no ethical and legal limitations on informal discovery of social networking sites when the information is publically available to a legal professional. 7 Therefore, it has become common practice for litigators to perform an introductory search of the adverse claimant s social media information. 8 Courts across the country have come to expect lawyers to utilize online resources, and have held information from publically accessible social media pages is fair game. 9 B. The Legal and Ethical Limitations on Legal Professionals Conducting Informal Social Media Discovery Private Information States differ as to ethical and legal limitations placed on legal professionals during informal discovery of social networking sites where the claimant has protected their uploaded content with privacy settings. 10 Privacy settings allow a claimant to restrict access, to social media content, to friends or individuals existing within their same shared network. These restrictions hide potentially useful information, and thus prevent attorneys from completing informal discovery of the claimant s social media. States are at odds in deciding Ethical Use of Social Media in Claim Investigations Kohane 245

6 the extent an attorney may resort to trickery via the internet to gain access to an otherwise secure social networking page and the potentially helpful information it holds. 11 States unanimously agree overt deception, such as creating a fake social media profile to obtain access to a claimant s private social media content, is unethical and violates Model Rule of Professional Conduct 8.4(c). 12 However, States are divided as to whether an attorney may ethically be able to use all true information to request access to a hostile party s social media profile. 13 The Philadelphia Bar Professional Guidance Committee ( The Philadelphia Committee ) addressed whether it was ethical for an attorney to request access to a witnesses private Facebook content via third party requestor. 14 The Philadelphia Committee felt such a practice was inherently deceptive, and deemed it unethical for an attorney to omit a highly material fact, namely, that the third party who asks to be allowed access to the witness s pages is doing so only because he or she is intent on obtaining information and sharing it with a lawyer for use in a lawsuit to impeach the testimony of a witness. 15 The City of New York Committee on Professional Ethics ( The New York Committee ) subsequently disagreed with the fore mentioned notion. 16 The New York Committee recognized that New York State has a policy which encourages informal discovery methods, and they believed it would be inconsistent with the policy to flatly prohibit lawyers from engaging in any and all contact with users of social networking sites. 17 Therefore, The New York Committee conclude[d] that an attorney or her agent may [ethically] use her real name and profile to send a friend request to obtain information from an unrepresented person s social networking website without also disclosing the reasons for making the request. 18 Although the various ethics boards who have addressed the implications of informal social media discovery do not completely parallel each other, all of the committees emphasized that lawyers must conduct their discovery in a manner which does not run afoul of their legal professional ethics. C. The Legal and Ethical Limitations on Legal Professionals Conducting Informal Social Media Discovery Contact with Represented Parties Legal professionals run into additional ethical considerations pertaining to contact with represented parties. Model Rule of Professional Conduct 4.2 prohibits lawyers from communicating about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, regardless of the medium of communication. 19 The Oregon State Bar Association Board of Governors ( OSBA ) specifically addressed two issues: (1) whether a lawyer may visit the public website of an opposing party, and (2) whether a lawyer may communicate via the website with the opposing party. 20 The OSBA discerned viewing the public social media profile of a represented party was ethical because it did not involve communication, and such conduct is no different than reading a magazine article or purchasing a book written by that adversary. 21 However, the OSBA held any attempted written communication via the Internet [is] directly analogous to written communication via traditional mail or messenger service, thus such communication constitutes an ethical violation. 22 The OSBA concluded any Internet activity directly analogous to traditional forms of communication [fall] within the proscription of [model rule 4.2]. 23 D. The Legal and Ethical Limitations on Legal Professionals Conducting Formal Social Media Discovery Legal professionals may seek social media content by utilizing formal discovery mechanisms, however formal discovery is more restrictive and does not always provide the most efficient or successful means for obtaining evidence. 24 Much like medical, employment, and other records of insurance claimants, attorneys can request relevant social networking records that are not publically accessible. 25 The Appellate Division, Fourth Department, of New York has held the proper means by which to obtain disclosure of any relevant information contained in the social media account is a narrowly-tailored discovery request seeking 246 Insurance Coverage and Claims April 2013

7 only that social-media-based-information that relates to injuries stipulated in the complaint. 26 The discovery request may not be construed broadly to serve as a fishing expedition into a party s account on the mere hope of finding something. 27 A formal discovery requests for private social media content does not provide attorneys with allencompassing access to a claimant s social media profile. 28 Privacy interests associated with private social media content do not serve as an absolute bar to discovery, however courts have taken into consideration the potential invasion of a claimant s privacy. 29 Therefore, formal discovery of social media acts to limit the content accessible to attorneys by placing heightened importance on the narrowness of their discovery demand and the relevance of the information contained within the claimant s social media profile. 30 In addition to formal social media discovery being restrictive, legal professionals meet additional statutory obstacles where claimants have taken reasonable steps to keep their information private. The Stored Communication Act (SCA), 18 U.S.C. Section 2701, is a federal statute enacted to prohibit third parties from accessing electronically stored communications without proper authorization. 31 Under the SCA, an offense is committed either if anyone intentionally accesses without authorization a facility through which an electronic communication service is provided, or intentionally exceeds an authorization to access facility and thereby obtain... an electronic communication while it is electronically stored in such system. 32 Although some courts have enforced civil subpoenas for private social media information, some argue that private social media information is protected, and the SCA prohibits social networking sites from disclosing information about a user s page to anyone other than the user. 33 Social networking sites have become notoriously resistant to subpoena efforts, and websites urge parties to resolve discovery issues without involving them. 34 Therefore, the most effective method to obtain discovery of social media contents, without statutory limitations, is a well-tailored discovery request to the party himself, or by having the party execute a consent form or authorization permitting the holder to obtain such content directly from a social networking site. 35 III. The Legal and Ethical Limitations on Insurance Professionals Conducting Informal Social Media Investigation Investigations into a claimant s social media content play an equally important role for insurance professionals. Insurance fraud has been characterized, conservatively, as an $80 billion problem. 36 Therefore, a growing number of insurance professionals are finding that social media sites provide potentially powerful tools in investigating fraud. 37 At the very least, a look into a claimant s social media content will give adjusters valuable knowledge regarding the type of person with whom you are dealing, however such an investigation may yield monumental findings that completely contradicts the claims being presented. 38 However, such investigations do not come without legal and ethical limitations, and the extent of these limitations weighs directly upon who is conducting the insurance professional s investigation. A. The Legal and Ethical Limitations on Insurance Professionals Conducting Informal Social Media Investigation Insurance Professional as Independent Investigator Insurance professionals conducting an independent investigation into a claimant s social media content are legally limited by statues prohibiting misrepresentation and deception in claim investigation. A growing concern for privacy on social media websites has an increasing demographic of users restricting their information from public view. Insurance investigators should refrain from utilizing impersonation or pretext to trick a claimant into releasing private personal information. 39 Deceptive and deceitful conduct may Ethical Use of Social Media in Claim Investigations Kohane 247

8 result in legal implications as many states have prohibited such activity by insurance investigators. 40 Therefore, insurance investigators must abide by relevant state statute to avoid any potential legal culpability for an improper inquiry into a claimant s social media content. Insurance professionals conducting an independent investigation into a claimant s social media content are also limited by the rules of professional and ethical responsibility. They should always proceed with caution to ensure that all of their investigations are in compliance with the rules of professional and ethical responsibility in claim handling. 41 The mere fact an insurance investigation delves into a claimant s social media page does not create an exception to the ethical rules of claim investigation. Insurance investigators should not attempt to friend the claimant or set up a fake profile in an attempt to get around privacy settings. 42 Furthermore, there should be no engagement in online discussion to elicit information, because such conduct may be seen as a violation of the insurance agent s ethical obligation of good faith claims handling. 43 Therefore, insurance investigators must be cautious as to avoid exposure to privacy violations if they inappropriately obtain information from a claimant s social media page. The final limiting factor for insurance professionals conducting an independent investigation into a claimant s social media content may also be their respective company s procedural guidelines. It is important to recognize that many insurers, like most other businesses, have strict procedural guidelines concerning the proper use of their company computer equipment by employees. Social networking at work costs businesses millions of dollars every year in lost productivity, so it is of no surprise employers are limiting access to social media outlets. 44 Insurance professionals should consult their employers as to the extent they may utilize social networking to conduct claim research, and additionally be cautious not to stray away from the investigation at hand. B. The Legal and Ethical Limitations on Insurance Professionals Conducting Informal Social Media Investigation Insurance Professional as an Agent of a Legal Professional In addition to the previously discussed ethical and legal limitations, insurance professionals, who act as an agent of an attorney, are also limited by the rules governing professional conduct of legal professionals. The rules governing professional responsibility of attorneys do not distinguish between the activities of a lawyer and those of an insurance investigator acting as his agent. 45 As previously discussed legal professionals are restricted by the Model Rules of Professional Conduct, and subsequently they may not instruct an insurance investigator to conduct their investigation in a manner that may violate those rules. 46 Insurance companies and investigators must be careful because, if they work in regular collaboration with attorneys, the attorneys are bound by the rules of professional responsibility if they are associated with an in-house or outside investigator. 47 Insurance professionals may jeopardize the admissibility of social networking evidence obtained through deceit and may place the lawyer at risk of ethical sanctions if they either contact a party represented by counsel or use deceit in investigations to uncover evidence. 48 Therefore, it is important for an insurance professional, acting as an agent for an attorney, to abide by the Model Rules of Professional Conduct and avoid what their individual state deems to be deceptive behavior in conducting social media investigations. IV. Conclusion Although there are no ethical rules governing the investigation of social media sites either for legal professionals or insurance professionals, case law, statutes, and current ethical rules provide adequate guidance into social media investigations. 248 Insurance Coverage and Claims April 2013

9 For legal professionals, the best approach... is a conservative use of informal discovery, resorting to formal discovery channel s when access to the desired information appears ethically uncertain. 49 Attorneys may freely search social media content for publically available information, as the courts have favored a policy of informal discovery. 50 Additionally, the following standards indicate the current understanding of best practices under the Model Rules of Professional Conduct: (1) Unless a lawyer is entirely clear on the pretexting authority in his or her jurisdiction and confidently feels that the use of false identity on a social media site would fall within a pretexting exception, lawyers should never use false identities and fabricated profiles to obtain access to and information contained on social media sites. (2) A lawyer using his or her true identity may request friend or follower status of an unrepresented person, but should include with the request a statement disclosing the purpose of the request. (3) A lawyer may enlist a third party agent to request friend or follower status of an unrepresented person, but should also include with the request a statement disclosing the purpose of the request. (4) Lawyers should refrain from requesting friend or follower status of a [legally] represented person s profile. (5) A lawyer should not engage in interactive review posting, messaging, tweeting of a represented person s social media profile. 51 Finally, in any other situation, not depicted above, a legal professional should always err on the side of caution and utilize formal discovery methods to legally and ethically obtain access to private social media content. 52 Much like legal professionals, insurance investigators are subject to similar ethical and legal limitations in investigating social media content. Independently acting insurance investigators are free to investigate public information, but must cautiously avoid deceptive practices when investigating private information. 53 Independent insurance professionals are subject to the rules of professional and ethical responsibility in claim handling, and must also abide by state statutes prohibiting pretext in insurance investigations to prevent prejudicing any portion of inquiry. 54 Finally, an insurance professional, acting as an agent for an attorney, must know the attorney s ethical boundaries in their respective state to refrain conducting an investigation that could potentially subject the attorney to ethical violations. 55 Endnotes 1 James Ruotolo, Social Media Sleuthing: Proceeding with Caution in the New Frontier (2012), available at propertycasualty360.com/2012/01/27/social-media-sleuthing (last visited Dec. 28, 2012). 2 John G. Browning, Like it or Not: How Social Media Can lead to Litigation (2012), available at com/2012/10/08/like-it-or-not-how-social-media-can-lead-to-litigation/ (last visited Dec. 28, 2012). 3 4 Allison Clemency, Friending, Following, and Digging up Evidentiary Dirt: The Ethical Implications of Investigating Information on Social Media Websites, 43 Ariz. St. L. J. 1021, 1027 (2011). 5 Supra note 1. 6 Supra note 4, at Peter Goldman, Social Media Sites: The Fraud Investigator s New Best Friend... But Friending Can Be Risky (2012), available at (last visited Dec. 28, 2012). Ethical Use of Social Media in Claim Investigations Kohane 249

10 8 John G. Browning, Digging for the Digital Dirt: Discovery and the Use of Evidence from Social Media Sites, 14 SMU Sci. & Tech. L. Rev. 465, 470 ( ). 9 See e.g., Moreno v. Hartford Sentinel, Inc., 172 Cal. App. 4th 1125 (Cal. Ct. App. 2009). 10 Shane Witnov, Investigating Facebook: The Ethics of Using Social Networking Websites in Legal Investigation, 28 Santa Clara Computer & High Tech. L. J. 31, ( ). 11 N.Y. City Bar Ass n Comm. n Prof l & Judicial Ethics, Formal Op (2010). 12 Supra note 10, at at Phila. Bar Ass n Prof l Guidance Comm., Op (2009) Supra note Model Rules of Prof l Conduct R. 4.2 (2010). 20 Or. State Bar Ass n Bd. Of Governors, Formal Op , 452 (2005), available at (last visited Dec. 28, 2012) Supra note 4, at Law School News, Social media and insurance fraud Professor Gregory Duhl and attorney Jaclyn Millner explain (2011), available at (last visited Dec. 28, 2012). 26 Kregg v. Maldonado, 2012 N.Y. Slip Op (4th Dept., Sept. 28, 2012) Reid v. Ingerman Smith LLP, 2012 WL at *4 5 (E.D.N.Y. 2012). 29 Supra note 4, at Deborah A. Lujan, Speaking Of: Social media Intelligence (2011), available at com/2011/02/02/speaking-of-social-media-intelligence (last visited Jan. 2, 2013) Supra note 8, at Anthony O Donnell, Insurance Fraud Fighters Accused of Snooping on Facebook Accounts (2011), available at (last visited Jan. 2, 2013). 37 Peter Goldman, Social Media Sites: The Fraud Investigator s New Best Friend... But Friending Can Be Risky (2012), available at (last visited Jan. 2, 2013). 38 Wayne Partenheimer, Using Social media in Your Claims Investigations You ve Got A Friend (2011), available at (last visited Feb. 8, 2013). 39 Denise Johnson, Using Social Media in Claims Investigation (2012), available at national/2012/11/05/ htm (last visited Jan. 2, 2013). 40 See e.g., Cal. Ins. Code Insurance Coverage and Claims April 2013

11 41 John Butler, Social Media Another Item for the Claims Toolbox (2011), available at pdf/insuranceissues en.pdf (last visited Jan. 2, 2013). 44 Chris Nerney, Social Network Distract at Work. Seriously (2011), available at social_networks_distract_at_work_seriously.html (last visited Jan. 2, 2013). 45 Supra note Supra note 4, at Supra note at Supra note Supra note Supra note 23. Ethical Use of Social Media in Claim Investigations Kohane 251

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