Current as at 27 October 2026. This article explains a practical model for external litigation capacity in insurance disputes. Legal qualification must always follow the facts of the particular case.
A practical guide for insurers: recourse, subrogation, defence of damages claims and litigation-risk management.
Practical criteria for selecting recourse claims, managing litigation risk and controlling legal spend
Managing insurance disputes and recourse portfolios requires legal and claims teams to balance speed, cost control and legal precision. An external legal team should not be used as a mechanical outsourcing solution for routine correspondence. Its role is to provide specialist litigation expertise, absorb peak workloads and apply a robust evidential filter to high-value or factually complex cases.
How we support insurers
IVANOVA Legal Solutions provides flexible external litigation capacity for insurers and specialist insurance operators: early assessment of recourse and subrogation claims, demand letters and pleadings, defence of property-damage and non-pecuniary-damages claims, takeover of pending proceedings and standardised monthly reporting. Each instruction begins with a conflict-of-interest check and an agreed secure channel for claims files and evidence.
1. Selecting recourse claims: a legal and economic filter
Pursuing every recourse claim regardless of its prospects can create unrecoverable court fees and legal costs. A sound approach starts with a legal review and classification of each claim by its legal basis and realistic recoverability.
Subrogation in property insurance
Under Article 410 of the Bulgarian Insurance Code, an insurer may step into the insured’s rights against the tortfeasor or a liable principal up to the indemnity paid and customary loss-adjustment costs. Before a claim is pursued, the team should check whether a statutory limitation applies to close relatives or members of the same household, subject to the applicable intentional-conduct exceptions.
Inter-insurer claims and compulsory motor third-party liability recourse
Where a claim is pursued between insurers, the applicable route, the validity of compulsory cover and the completeness of accident evidence should be established at the outset. For compulsory motor third-party liability recourse, the legal basis and statutory conditions must be identified for the particular case, including the potential application of Articles 433 or 500 of the Bulgarian Insurance Code. A general reference to “recourse” is not enough: the relevant conduct, the basis for the payment and the evidential prerequisites must be proved.
Recoverability before proceedings
Before a claim is filed, an economic review of the respondent’s ability to pay is essential. Searches of the Bulgarian Property Register, Commercial Register and relevant asset registers are not a formality; they help avoid enforcement proceedings with no practical recovery prospect.
2. What to check before a demand letter or claim
Before legal action, the evidential strength of the claims file should be reviewed.
- Validity and lawfulness of the insurance payment. In a subrogation claim, the respondent may rely on defences arising from the underlying insurance relationship, such as lack of insurable interest, an excluded event or an uncovered loss. A payment made without a sound contractual basis may undermine recovery.
- Limitation periods and interest. The applicable limitation period, its starting point and the date from which statutory interest may be sought must be assessed for the particular claim rather than taken from a generic template.
- Causation and quantum. The review should cover inspection reports, photographs, records of competent authorities, repair invoices and documents supporting reinstatement value.
- Demand letter and litigation strategy. Before a letter is sent, the correct addressee, evidence, amount and realistic voluntary-payment period should be determined. The letter should support later proof, rather than merely precede the claim as a formality.
3. Taking over a pending case: continuity and critical points
Transfer of a pending case to external counsel is typically justified where facts are unusual, technical, medical or financial experts are involved, the amount at stake is significant, or the in-house team experiences a temporary peak in workload.
- Audit of procedural preclusions. We review whether defences, evidence requests and document challenges have been raised in time under the Bulgarian Civil Procedure Code.
- Expert-evidence review. Additional or repeat questions can be prepared for automotive, medical and accounting experts where the initial opinion does not adequately support the insurer’s position.
- Settlement reassessment. Once the evidence is available, we assess whether an out-of-court or judicial settlement may reduce overall exposure to court fees, experts’ fees and adverse costs.
- A structured handover. The practical transition includes a procedural timeline, current risk position, missing documents, critical deadlines and named points of contact at the insurer.
4. Property and non-pecuniary damages claims
The defence should reflect the type of damage claimed.
Property damage
Article 386 of the Bulgarian Insurance Code is based on indemnifying the actual direct loss as at the date of the event. In motor third-party liability claims, exposure should be measured against market prices for labour and parts, not automatically against the invoiced price of an individual repair arrangement. In total-loss cases, a correct assessment of salvage value is critical to avoid unjust enrichment.
Non-pecuniary damage
Non-pecuniary damage is assessed by the court on an equitable basis under Article 52 of the Bulgarian Obligations and Contracts Act. Equity is not abstract: the evidence should address the nature and severity of injuries, treatment, recovery prognosis, the claimant’s age and, in fatal cases, the actual relationship with the deceased. The defence should require specific proof rather than allow those factors to be assumed.
5. Inflated claims and contributory negligence
Defending an inflated claim commonly requires two parallel lines of analysis.
- A specific contributory-negligence defence under Article 51(2) of the Bulgarian Obligations and Contracts Act. It should be raised in time and identify the injured party’s conduct or omission that contributed to the outcome, such as failure to use a seat belt, crossing at an unauthorised place or travelling with a driver after alcohol consumption. The defence cannot remain abstract: it must be linked to evidence and causation.
- A critical review of medical records and expert evidence. This includes duplicate diagnoses, pre-existing conditions and alleged worsening that is not directly caused by the insured event.
6. A monthly litigation-reporting standard
External representation becomes a useful management and reserving tool when its monthly report provides measurable information about:
- case, court, instance, claim-file reference and procedural stage;
- amount claimed and current financial exposure;
- actions taken, latest hearing and upcoming deadlines;
- evidence status and key expert findings;
- legal-risk assessment and likely outcome;
- action required from the insurer; and
- recommended next step: continue, settle, bring a related claim or avoid an unmeritorious appeal.
7. Working with claims handling without replacing it
External counsel complements the claims-handling function; it does not replace it. Decisions on admitting claims, technical reserves, payment approval and regulatory compliance remain within the insurer’s internal competence.
The value of the external team lies in timely opinions on borderline cases during claims handling, guidance on the documents needed before a reasoned refusal, and a consistent feedback loop from court practice to the claims function.
Conclusion
Instructing an external legal team for insurance litigation is a management decision aimed at capital protection and more predictable risk management. When the relationship is built around an early filter, evidential discipline, a clear response to inflated claims and transparent reporting, the insurer gains flexible litigation capacity without losing control of its internal function.
Need external litigation capacity for a recourse portfolio, a pending case or a complex claim? Send a short, non-confidential outline through our enquiry form or to givanova@ivanovalegalsolutions.com. Please do not send sensitive personal data, medical records or full claims files at first contact; we will agree an appropriate secure channel where needed.
This article is for general information only and is not individual legal advice. The legal basis, evidence and litigation strategy depend on the specific insurance product, event and dispute.