Written by David O’Neill, JD, Director of Investigations, PolicyFind

As an insurance archeologist, the location and retrieval of historical insurance policies has long been my business. Policyholders with long-tail claims often rely on liability insurance policies issued decades ago to provide coverage. These policies provide the evidence of insurance necessary to tender environmental property damage claims, toxic tort claims, as well as sexual battery claims to insurance carriers.  Where an actual insurance policy cannot be found, an endorsement, a premium notice, or broker correspondence may serve as the document to be authenticated and form the basis of the policyholder’s claim for coverage. These documents dating to the mid and late 20th century are typically found boxed in off-site storage facilities, in insurance broker archives, in government-retained microfilm collections, etc.

Policyholder’s counsel proffering decades-old documentary evidence in declaratory judgment actions to prove the existence, terms and conditions of liability insurance coverage have long done so with confidence, knowing that these types of documents were “self-authenticating.”  Federal Rule of Evidence 901(b)(8) allows that such an “Ancient Document” can be relied upon as authentic if (a) it is “in a condition that creates no suspicion about its authenticity”; (b) was found “in a place where, if authentic, it would likely be” and (c) “is at least 20 years old when offered.”  Federal Rule 803(16) provides a hearsay exception for these Ancient Documents. Therefore, news this summer that the United States Judicial Conference’s Committee on Rules of Practice and Procedure had issued a report proposing changes to the Federal Rules of Evidence that would repeal the hearsay exception for Ancient Documents is being met with some concern by policyholder’s counsel.

The Judicial Conference’s rationale for the proposed repeal of the Ancient Document rule is that electronic storage of documents has made the retention of records for 20 years or more commonplace.  Other electronically preserved documents are now more likely available to authenticate an historical document, making it admissible under the business records exception to the hearsay rule. Also, and more importantly, the Conference perceived that because of these advancements in document storage,  there is a danger of unreliable documents, scanned and stockpiled for twenty years, being introduced as “ancient documents” and acquiring the mantle of self-sustainability undeservedly.

Should public comment on the proposed rule change not be sufficiently adverse, and the Ancient Document rule is abrogated, policyholder’s counsel will need to introduce old policy evidence under the business records exception to the hearsay rule.  He or she will be required to produce a witness or locate and retrieve additional documents showing that the proffered document is indeed a business record, made at or near the time indicated on the document as a regular practice of that business.  The problem with this is that the older the insurance evidence, the less likely that a witness to the policy’s issuance or the reliability of its contents can be found.  If the witness can be found, there is less likelihood that he or she can sufficiently recall the details regarding the issuance of the historical record.  Also, there is less likelihood that sufficient supporting documentation can be located.  This is because the great majority of these records would be in the files of insurance agents or brokers likely out of business or using record retention schedules that call for the destruction of such policy evidence after 5, 7 or 10 years have passed. This paucity of authenticating evidence will provide a great advantage to insurers challenging the authenticity of old policy evidence.

Comments can be made regarding these proposed changes in writing or by email on the U.S. Courts website until February 16, 2016.