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LONDON-Lloyd's of London underwriters are working to curb hefty legal expenses from lawyers in the United States.

Lloyd's Claims Supervisory Board has published a "terms of engagement" document to gain "greater accountability and transparency" when using U.S. lawyers, said Gary Bass, claims director of Lloyd's underwriting agency D.P. Mann Underwriting Agency Ltd.

The practices in the document are "highly recommended" to all Lloyd's underwriters using U.S. lawyers, he said.

Until recently, most syndicates dealt with their lawyers in isolation and it is estimated that the legal cost to the market in one year could have topped 1 billion pounds ($1.62 billion), he said. Some policies include legal expenses, which would eat into the coverage offered.

For the past 18 months, however, syndicates have been looking at how they can benefit from Lloyd's size if they act in unison. One such initiative has resulted in the "terms of engagement" document.

The terms of engagement document, which is intended to be a legal contract between lawyers and underwriters, outlines various ways to improve the efficiency and reduce the cost of using U.S. lawyers, according to Mr. Bass, who was speaking at a lunchtime seminar of the British Insurance Law Assn. Suggestions in the document, according to Mr. Bass, include:

Managing the timing of reports from lawyers to underwriters. Lawyers should acknowledge that they have been instructed by underwriters within two days of receiving instruction. A preliminary report should be sent "exclusively" to underwriters no later than 30 days and should review the coverage, give preliminary observations and make recommendations. Additional case reports would then be sent over a specified period.

Strategically overseeing staf-fing. Lawyers should assess the number of people required for the case; give the name of the lead counsel; and outline the hourly rates.

Case management is essential to making sure legal staff are used properly, Mr. Bass said. For example, legal assistants who cost less per hour than partners should transcribe depositions, he said. And only one lawyer is needed at a deposition. Mr. Bass said he recently was deposed in New York. With him was one lawyer, but 16 lawyers represented the other side.

Fee statements should be on a quarterly basis and timesheets maintained for each billable person.

Client entertainment, in-house legal research, overseas travel and in-house photocopying are not billable.

In return for more efficiency, underwriters will try to pay lawyers more quickly, said Mr. Bass.

He concluded his speech with 10 "commandments" to insurance lawyers, which included:

Thou shalt not have a senior partner charging 300 pounds per hour standing at the photocopier and charging the client.

Thou shalt use one word and not 10.

Thou shalt not bill a client for more than 24 hours in a day.