SUBJECT:

UC Risk Management Self-Insurance Programs "Practice Statement" - Campus Contributions to Settlement

Risk Management Self Insurance Programs at UCSD are governed by policies
and procedures issued by the Office of the President. A marked systemwide
increase in litigation and related costs has forced an on-going evaluation
of existing practices. In the meantime, the Office of the President has
issued the following "Practice Statement" covering campus contributions to
settlements:

"The University is subject to claims and litigation related to
its self-insurance programs. Although most often losses result from
activities found in the normal course of University business, occasionally
a loss may result from inappropriate action by a department or employee.
In these situations, campuses may be assessed all or part of the cost of
claims or lawsuits where the campus had knowledge and control over a
particular situation and failed to prevent a loss by taking action or
changing condition. These circumstances may include, but not be limited to:

- Violation of State or Federal law.
- Violation of University or campus policy.
- Failure to supervise or provide effective job-related training.
- External agency review resulting in assessment of fines, penalties or
sanctions.
- Conduct not in the interest of the University, such as personal action
(e.g. sexual harassment).
- Egregious, malicious or illegal behavior.
- Failure to respond to a known hazard or violation.
- Excessive or repetitive claims or lawsuits of the same type.

Assessment of a campus contribution to a settlement will be determined
based on the facts of a claim or lawsuit. This evaluation will include
consideration of campus remediation efforts and specific loss prevention
actions. The amount of a contribution will be made in consultation with
the appropriate campus administrators, campus risk management, department
representatives, the Office of the President, and the Office of General
Counsel, as applicable."

In conjunction with this statement, it is noted that Regents' Policy on
Settlement of Claims and Litigation requires that all payments in
settlement of litigation (legal proceedings in the form of a lawsuit,
arbitration proceeding, or internal or external administrative proceeding)
must have the prior approval of the Office of the President and General
Counsel. This adds to the complexity and time required to resolve litigation.

When Risk Management Program funding may be required, early involvement of
Campus Risk Management is necessary. Dependent upon circumstances, local
funding may be necessary as outlined above. UCSD Risk Management will do
its best to facilitate an equitable and timely resolution of claims and
litigation. Specious claims against UCSD are vigorously defended and the
University has a good record of defeating them.

Any questions regarding this matter may be directed to Van Jahnes-Smith,
Campus Risk Manager @ 43782 or e-mail jahnes-v@ucsd.edu.

Steven W. Relyea Vice Chancellor - Business Affairs