Modern Claims Magazine - Issue 3

“What a joint venture gives you is a common goal, a willingness to work closely with one another to ensure, importantly, that your

systems are aligned... If this makes it easier and quicker for the customer then it has to be a good thing.”

Mark Savill Lyons Davidson

September 2013 | Issue 03 | ISSN 2051-6495Linking the Industry Together

“Cutting back on customer service is a false economy...If you don’t deliver an excellent service,

you will lose a customer and then spend more money on marketing to try and get them back.”

Peter Horton, LV=

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Supported by Sponsored by

Association of RegulatedClaims Management Companies A CENTURY OF

PROFESSIONALISM

Professor Fenn, speaks to Modern Claims about the aftermath of LASPO, Jackson and the government’s response to his MoJ report.

Don’t get mugged: The recent Law Society anti-insurer advertisements certainly turned heads. Modern Claims speaks to professionals on both sides of the fence about the ‘love it or hate it’ campaign.

join the LV= cLaims team

facebook.com/lvcareers @lvcareers

MC // September 2013

Usually, any magazine

put together over the summer months is a tall order for an editor; not only is half the population on

holiday but so is the Government. Cue the broadsheets suddenly filled with news items both bizarre and meaningless and the trade press scraping the barrel. I am happy to report however that this has certainly not been the case for Modern Claims this year. With flash flooding, the very recent aftermath of the 1st April and potentially only a few weeks in advance of further civil claims reform, the summer of 2013 has been a hot and busy one for those progressing change in the sector.

I am quite sure professionals haven’t done away with their annual leave (and thank you to all contributors for preparing copy before, during and after holidays) but that’s not because the workload is decreasing. As Mark Savill, Managing Director of Lyons Davidson, points out in our cover interview (page 11-14), the ‘dust hasn’t settled yet’ or revealed the true picture of claims management ongoing. What is clear

though is that insurers and law firms leading process and strategic innovation for their clients are defining the future - something to consider if you’re still watching and waiting from the sidelines.

On an outcome-based level, the reforms haven’t yet started to hit home in terms of judgements and claimant perceptions of value. The views of our columnists on the issue – in particular, Alan Nesbit, ARC and Karl Fischer, Wolf Law (page 51-53) – are mixed on these points. As claimants (on the whole) have to pay for legal costs from their damages, the focus on customer service and what your business can really deliver is under increasing scrutiny. The most common message in this issue of Modern Claims really is one of customer service arrangements. LV= General Insurance has taken this to the very heart of what it does for its policy holders. Peter Horton, Chief Operating Officer at LV= believes consumers are now too discerning to invest in a branded policy based on aggregator information alone. The LV= branding revolves around the insurance company being the ‘best loved’ in the market, helped, no doubt, by recent YouGov research that indicated LV= has ‘the highest ‘quality’ score of any insurance brand’.

Both Horton and Savill believe simply paying lip-service to customer

care (especially at a time when customers are paying even more for policies, buying new BTE legal expense insurance or paying for litigation fees from their damages) is dangerous and potentially brand damaging. So what do you need to get it right? There are a number of ideas and solutions in this issue but two things that come up time and time again are: firstly, create a firm, engaging and clear culture within the claims team, with a focus on helping customers when they need you – especially during a time of distress, such as a flash flood. Secondly, the processes, technology, advice and skills to manage the basics efficiently from the outset, leaving more time for specialist care, a focus on the customer and hopefully a long-lasting relationship and renowned position within the marketplace.

It looks set to be an equally busy autumn as the claims industry lines itself up for further change, regulation and, most interestingly, consumer reaction.

Emma WaddinghamChief Editor

The Modern Claims team would love to hear from you. Please do drop me a line with your feedback and news via email at: [email protected]

Welcome to

Modern Claims Magazine Issue 03 – September 2013 | ISSN 2051-6495

All material is copyrighted both written and illustrated. Reproduction in part or whole is strictly forbidden without the written permission of the publisher. All images and information is collated from extensive research and along with advertisements is published in good faith. Although the author and publisher have made every effort to ensure that the information in this publication was correct at press time, the author and publisher do not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from negligence, accident, or any other cause.

Contact t: 01765 600909 e: [email protected] w: www.modernclaimsmagazine.co.uk Modern Claims Magazine is published by Charlton Grant Ltd ©2013.

Project DirectorKate McKittrick

Accounts DirectorKarl Mason

Chief EditorEmma Waddingham

Group EditorCharlotte Parkinson

Head of Events Julia Todd

Interview EditorBippon Vinayak

Advertising Rachael Pearson

ProductionLindsey Thomson-Heley

Design Richard Berry

Introduction 03join the LV= cLaims team

facebook.com/lvcareers @lvcareers

03-08 Intro & tHE nEWS

07 Hughes talks news Anthony Hughes asks if, four months

on, we have seen any real impact of Jackson and the LASPO reforms on the claims industry. Or are the reforms and business models yet to appear the real cause for concern?

11-20 tHE IntErVIEWS

11 Mark Savill, Lyons Davidson Mark Savill, Managing Director of Lyons

Davidson - the firm which launched a joint-venture ABS with Admiral - speaks to Emma Waddingham about the importance of strategic partnerships and a potential change in focus for the claims process.

16 Peter Horton, LV= General Insurance Peter Horton, the Chief Operating

Officer at LV= General Insurance and MD of Britannia Rescue, speaks to Emma Waddingham about how the brand ensures it meets it’s ‘best loved’ insurer status and what customer service really means in the claims department.

19 Professor Paul Fenn Charlotte Parkinson asked Professor

Fenn for his thoughts on the aftermath of his MoJ report, the Jackson reforms and LASPO, in particular, the reaction by government.

21-38 tHE oPInIonS

22 Sector soapbox ABI, BIBA, Craig Budsworth, MASS,

Rod Evans, FOIL

24 Filling the CMC gap Tony Rand, Vamco Ltd & Kingsley

Law Ltd

24 Value added collaborations Andy Watson, Ageas

25 new breed regulation Jim Toole, First Response Law

25 In-source risk knowledge David Williams, AXA Insurance

27 Apps: the whole story? Dolores Evelyn, Eclipse Legal Systems

27 one-stop-transformations Andy Whatmough, S&G Response

CONTENTS 07

27

16

Alan nesbitManaging PartnerNesbit Law Group & Chairman, ARC

Alan Strange Underwriting DirectorLAMP Group Limited

Andy WatsonChief ExecutiveAgeas

Andy WhatmoughDirectorS & G Response

Ant GouldDirector of FacultiesChartered Insurance Institute

Anthony HughesChief ExecutiveHorwich Farrelly Solicitors

Ashley PotterDirectorDWA Claims

Bippon VinayakChairman & CEODoctors Chambers

Craig BudsworthChair, MASS &RTA Partner, Glaysiers

Darren GowerHead of MarketingEclipse Legal Systems

David WilliamsManaging Director, UnderwritingAXA Insurance

Dolores EvelynSales DirectorEclipse Legal Systems

Professor Dominic reganLegal commentator, trainer and costs expert

Donna ScullyPartnerCarpenters

Emma BellDirectorClifford James

Jim tooleOperations DirectorFirst Response Law

John Keates Chief Technology Officer Lysanda Ltd

John Latter ACIIDirector of Technical Centre, UK Claims Zurich Insurance plc

Karl FischerManaging DirectorWolf Law Solicitors

Keith CrosierManaging EngineerLegal & Technical Assessors

Gavin redmanBusiness Development ManagerExpress Solicitors

Greg GladwellChief Executive Officer, UK & IrelandCrawford & Company

Lisa Beale Head of Checkaprofessional.com

Matthew WaterfieldHead of Legal DevelopmentSimply Lawyers

Michael DavidsonHead of Strategy & SalesGoldsmith Williams Solicitors

Michael nixonCEOInter-est Ltd

nik EllisManaging DirectorLaird Assessors

Paul SlavenClaims Manager - Property - International Property & Casualty InsuranceXL Group

Peter HortonChief Operating Officer - GILV=

Peter ParryManaging DirectorIndependent Accident Investigations

Peter revellPartner and Head of Technical Costs at Meruit CostsLyons Davidson

richard ClarkDirectorXuber

richard ForthManaging DirectorForths Forensic Accountantsrobert KellyKey Account ManagerAcorn Assessors

rod EvansPresidentFOIL

Sarah HillPartnerBerrymans Lace Mawer

tim WallisMediator, Solicitor, DirectorExpedite Resolution

tony randManaging DirectorKingsley Law Ltd

Zoe HollandManaging DirectorZEBRA Legal Consulting

Editorial Columnists

Contents04


29 the cool kid Richard Clark, Xuber

29 the rise of BtE Peter Horton, LV= General Insurance

31 Claims cost battle Richard Forth, Forths Forensic

Accountants

31 Co-insurer communications Paul Slaven, XL Insurance

33 Collaborate with caution Eddie Longworth, Parabis Claims Solutions

33 Why can’t we work together? Tim Wallis, Expedite Resolution

35 one stop, constant savings Nik Ellis, Laird Assessors

35 PI: a profile of risk Zoe Holland, Zebra legal Consulting

37 Are you operating within the law? Peter Parry, Independent Accident

Investigations

37 What’s putting people off lawyers? Alan Strange, LAMP Group Limited

38 Strictly liability: a new dawn Alistair Schuberth, Willis UK Retail’s

Claims Defensibility Team

39-62 tHE FEAtUrES

41 Scared off or spot on? The recent ‘Don’t get mugged by

an insurer, use a solicitor’ campaign recently launched by the Law Society has certainly turned heads. Modern Claims asked Alan Nesbit, Donna Scully and David Williams, their thoughts on the ‘love it or hate it’ campaign.

44 Bugs in the system As gadgets give rise to a clear

increase in insurance fraud, Charlotte Parkinson gathers a selection of experts to garner their views on the changing world of fraud.

47 A dark art? Insurers aren’t using telematics as

extensively as their developers had hoped. As John Keates explains, accuracy and combating fraud isn’t black magic, just an effectively used black box.

49 right players, wrong formation? After two of the coldest winters on

record, UK insurers breathe a sigh of relief as seasons pass with relatively benign conditions. Greg Gladwell explains why.

51 Legal opinion Alan Nesbit & Karl Fischer give their

view on claimants’ reaction to sharing damages with their solicitor; Donna Scully looks at collaboration across the industry; Sarah Hill highlights the rise of ghost brokering and Michael Davidson suggests that the rise of Joint Venture ABSs is helping to create a ‘battle of the brand’ landscape for 2014.

55 Harassment returns The recent, fascinating decision of a

powerfully constituted and unanimous Appeal Court in Roberts v Bank of Scotland has resurrected an intriguing cause of action; harassment claims. Professor Dominic Regan reports.

57 Building public trust Legal comparison websites are not

going to go away, says The Legal Services Consumer Panel, which urges lawyers to be more transparent about service and pricing. Lisa Beale reports.

59 A new beginning Phil Bellamy takes us through the highs

and lows of personal injury claims post LASPO with a few positive surprises in addition to the grimly expected outcomes for many.

61 roll up, roll up… Welcome to the personal injury market

stall. As marketing collaboratives and new lead generation initiatives spring into life for practitioners, Gavin Redman looks for the real ‘deal’ in the plethora of marketing company pitches and how to set out your own stall to compete in difficult times.

62 5 minutes with... Rod Evans President, Forum of

Insurance Lawyers (FOIL)

62 Armed and ready Darren Gower, Eclipse Legal Systems

55

49

59MC // September 2013

05Contents

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modern-claims-magazine-full-page-ad.indd 2 15/11/2012 08:56

In truth, it is still too early to say what the long-term impact will be of

LASPO. There was obviously a hive of activity regarding the referral fee ban with new business practices being introduced although some commentators are suggesting that not everyone has got it right! So when will we see the first public enforcement of the ban?

on the ground floor.On a day-to-day level, the two most significant issues were the reduction in

recoverable fees in motor claims and the introduction of QOCS. The former has not had such a significant impact. The general feeling in the market is that consumers are happy to pay for a service and are generally accepting deductions from their damages on the basis that it is still a very low risk purchase, working on a ‘no-win no fee’ basis with their lawyer. QOCS has caused more people to scratch their head and rethink case strategies because of its retrospective application, in terms of cases which are not funded by a CFA. This has impacted both the claimant and defendant market - particularly around cases involving arguments of fraud or low speed impacts.

We’ve only just warmed up.In my opinion, the more wide ranging reforms that came into play at the end of July should see more market alteration.

HUGHES tALKS nEWS...Anthony Hughes asks if, four months on, we have seen any real impact of Jackson and the LASPo reforms on the claims industry. or are the reforms and business models yet to appear the real cause for concern?

One of the major objectives of LASPO, so we were told, was to reduce insurance premiums. Indications are that this is working, but I was interested to read the article from the Allianz CEO, John Dye, which states that he believes insurers are in danger of overstating the benefits of the reforms.

I have always said, insurance is about pricing risk. Unfortunately, young drivers present the biggest risk, often not causing the accidents that involve a simple whiplash, but major incidents causing larger scale injuries. These reforms won’t impact upon that area of the market. Maybe Mr Dye has a point.

ruffled feathers.Unsurprisingly, there have been mixed responses to the conclusions drawn by the Transport Select Committee and its recommendation not to increase the small claims limit. I have long since said that raising that limit to £5000 would not necessarily cure the issue that the consultation was aimed at -which was to reduce fraudulent claims. I suspect the biggest fear is that claims management companies, rather than lawyers, would flood the market. As such claims frequency would not reduce it could be easier for the fraudsters to exploit that situation.

Some of the more practical suggestions that were made could reap significant rewards. For example: a reduction in the limitation period and greater provision of information from both sides to medical experts, in advance of their examinations. On a personal level, I would be happy to support both. All sides are agreed that genuine claimants need to be compensated and fraudsters weeded out. Both of the above would go at least some way in achieving that, while allowing insurers to better manage their portfolio of risk if they knew there was a shorter timescale within which to bring claims.

Watch out for the mugger.I have always maintained that when it comes to marketing, lawyers should stick to giving legal advice. The Law Society ‘Don’t get mugged’ campaign has caused a real storm in a teacup and I wonder whether the storm has drawn more attention to the campaign than the adverts themselves (as is often the case with some rather annoying adverts on prime-time television).

“the general feeling in the market is that consumers are happy to pay for a service and are generally accepting deductions from their damages on the basis that it is still a very low

risk purchase, working on a ‘no-win no fee’ basis with their lawyer.”


Hughes talks news 07

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HORWICH FARRELLYOur size and scale enable us to process a high volume of cases, while our technical excellence and professionalism guarantee consistently high standards for our clients as we strive to exceed expectations. Our innovative, technology-based approach delivers a secure, practical and transparent service to our clients.

OUR SERVICES INCLUDE:

• Insurance

•Credit Hire

•Costs

•Fraud

•Claimant

•Claims Handling

COMPANIES WORKING WITH US CAN EXPECT:

•Strong technical leadership

•A personalised, client-focused service

•A dedicated approach – with specific client teams, and the ability to draw on our sector expertise

•An unrivalled level of quality assurance ensuring service excellence

MANCHESTER / SHEFFIELD / CHELM SFORD / L IVERPOOL

modern-claims-magazine-full-page-ad.indd 2 15/11/2012 08:56

The truth is that it won’t be a sustained campaign and indeed the whole furore now seems to have died down. It will be interesting to see whether or not the Law Society decides to instigate ‘phase two’ or indeed whether insurers will fight fire with fire, extolling the virtues of direct claimant activity.

ABS roll-out.I would dare to suggest that the general uptake of ABS status would be much reduced if it were not for the

referral fee ban. Bearing in mind the amount of work and indeed expense involved in setting up a pure ABS, I can’t imagine that many insurers would have gone down that route but for the brainchild of Jack Straw. As with many things, only time will tell as to whether or not they are successful. If they are, I can certainly see how it could help some of the major direct insurers to extend their brand penetration and become known - not only for providing insurance but also legal services - which in turn could allow them to cross sell such services in time. Maybe we have all been mistaken talking about ‘Tesco law’ and we should in fact have been talking about ‘Direct Line law’, after the recent announcement of the Direct Line ABS.

Customer value.There is no transparency about how ABSs are set up so it is difficult to comment as to whether or not

“Costs recovery in those cases is normally very straightforward; where an individual is backed by an atE policy because there is no finding of fraud, simply because the claimant has not been

able to prove the case. Compare that to cases of pure fraud where atE providers will seek to avoid indemnity. more often than not, the individual claimant is a man of straw so costs are often

impossible to recover - even when successful.”

“there is no transparency about how aBss are set up so it is difficult to comment as to whether or not they will genuinely be able to offer efficient legal services. if they can, then there

is no doubt the direct insurance market will have a huge amount of control over its non-fault accident book.”

“i would dare to suggest that the general uptake of aBs status

would be much reduced if it were not for the referral fee ban.”

they will genuinely be able to offer efficient legal services. If they can, then there is no doubt the direct insurance market will have a huge amount of control over its non-fault accident book.

Going global.In the same week, we have seen Hill Dickinson announced redundancies, agree to sell off its Chester operation but then open in Hong Kong. We are told that many others are also looking to penetrate the Asian market which, with its current vibrancy, is unsurprising. For decades now, many English firms have had a presence in Asia. Whether more traditional UK firms will be capable of breaking into that market will be interesting. I suspect it will be a challenge. However, in many areas, globalisation is occurring or indeed has occurred. Why should legal services be any different? Look at the big accountancy firms; they are all global, as are the major insurers.

tackling fraud.We have heard a great deal from the Government in terms of the objectives of its consultation being about the need to tackle fraud. In my opinion this is one of the most interesting and challenging areas following the implementation of LASPO - particularly QOCS. My business challenges thousands of fraudulent claims each year and currently has

an incredibly high success rate, particularly in relation to low speed impact - arguably the most pernicious area of bogus whiplash.

Costs recovery in those cases is normally very straightforward; where an individual is backed by an ATE policy because there is no finding of fraud, simply because the claimant has not been able to prove the case. Compare that to cases of pure fraud where ATE providers will seek to avoid indemnity. More often than not, the individual claimant is a man of straw so costs are often impossible to recover - even when successful.

The danger is that this becomes the norm in cases involving low speed impact. A norm which is in danger of driving the wrong behaviour, as claimants have nothing to lose in pursuing the case and compensators have to make that difficult choice. A choice between fighting claims and paying their lawyers to do it, with little or no prospect of getting those costs back. These types of claims are invariably of low value, so economic considerations have to come into play. I would urge insurers not to create another soft underbelly, which is what happened when pre-medical offers became the norm. Anthony Hughes is the Chief Executive of Horwich Farrelly Solicitors


08 Hughes talks news

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A unique and modern claims service

the need for cost-control and efficiency in the claims handling process has driven a small wave of collaborations between the insurance and legal sectors – mainly for insurers to access technological and process innovation, as well as scale and legal expertise. Mark Savill, Managing Director of Lyons Davidson - the firm which launched a joint-venture ABS with Admiral - speaks to Emma Waddingham about the importance of strategic partnerships and a potential change in focus for the claims process.

Interview with...Mark SaviLLLyons Davidson

Q What has been the effect on the claimant side of the business post-LASPo - especially in terms of process investment and structure within the firm? Have you restructured the claims

team or looked to gain grounds with system efficiencies?

a It has been challenging. We have had to continue to update our processes, provide training on new processes, update IT, advise insurers on the changes and totally renew all of our contractual

business models. As with a number of businesses we have also had to restructure the business as part of these changes. These are all things that we have been working on the last few years but the pace of change has had to increase. Key to our investment into change has always been technology. We develop our own internal systems which gives us more flexibility; for example, we were the first firm to implement A2A connectivity with the MoJ Portal which was crucial for the business. Since the introduction of the Portal we have been working closely with the MIB [Motor Insurance Bureau] as part of the change control process and have been at the centre of testing both the Claimant and Compensator systems on behalf of the industry.

We’ve always seen our role as being a strategic partner to the insurance industry, building claims solutions as part of the business relationship – it’s a collaboration with our clients and ABS is a good example of that. However ABS is not the only answer and there are other business models that we are reviewing with insurers.

In terms of ABS, our experience of working with the SRA has allowed us to advise on the content of an application, and management of that process. Key to our support here though is providing not just the legal know-how but full project management – from compliance advice and supervision to the technological infrastructure - and delivery of a full range of support services including costs, advocacy, and treatment solutions. The

“What a joint venture gives you is a common goal, a willingness to work closely with one another to ensure, importantly, that

your systems are aligned. this means you can look for changes that speed up the transfer of information between the parties

and avoid duplication. if this makes it easier and quicker for the customer then it has to be a good thing.”

ability to provide all these facilities means we can offer a complete package to insurers. This is going to be absolutely crucial going forwards.

Q Are enough firms looking at improving accountability on the claims handling processes – i.e. cost and profit of the

process, essential for those looking to a) become an ABS or b) joint venture with an insurer?

aAnyone working within or with the insurance industry accepts the fact they have to understand their business in detail. It is

essential that organisations can move with the changes to fee structures and understand margins


Mark Savill Interview 11

Mark Savill, Lyons DavidsonMark Savill is Managing Director of Lyons Davidson, a national legal services provider, with eight regional offices including London, Bristol, Cardiff and Edinburgh. The Company was one of the first Legal Disciplinary Practices to be approved by the SRA in 2011 and became an ABS under the passport procedure in October 2012.

Mark has regularly spoken and advised on the implications of LASPO, ABS structures and Portal reform and the other changes being introduced in the claims process. He is a member of the RTA Portal Change Control Committee.www.lyonsdavidson.co.uk

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“i think it’s clear that there will be a change in the status of medico-legal reports and their cost. i also think we’ll see the role of physiotherapy

fundamentally change within the claims process as part of an attempt to move from a compensation-outcome focus, to putting treatment first.”

within their business. There is also an increasing desire and expectation from insurers to work on an open book accounting basis, so that all parties understand the service and the financial benefits of collaboration and we have been open with our partners on the structure of our business. A key part of that is getting the management information right. You need technology to capture all of the fee and claims management data in order to build efficiencies. We’ve been doing that for a long time at Lyons Davidson; offering live on line management information for our insurer clients.

Q What has the firm learnt from its work with insurers in terms of the claims process and systems?

a We have always aimed to have a strategic relationship with insurers to make the

process work effectively. What a joint venture gives you is a common goal, a willingness to work closely with one another to ensure, importantly, that your systems are aligned. This means you can look for changes that speed up the transfer of information between the parties and avoid duplication. If this makes it easier and quicker for the customer then it has to be a good thing.

Q Admiral is well known for being employee focused and for giving its staff the opportunity

to develop cultural / CSr initiatives to help with employee retention and engagement, beyond professional skills. What has Lyons Davison learnt from Admiral in terms of this mindset?

a One of the key influences in our relationship with Admiral is the importance to them of culture;

we’ve learnt a lot from the way that they work and there are a number of elements of Admiral’s approach that I’m keen to adopt into our wider business. We’re not too far apart ethos-wise which has helped in our approach to working together.

Q What is the most difficult part of managing a large law firm in terms of the claims offering in

today’s climate?

a The biggest challenge is the size of change we have had to go through as a sector; with the

reforms coming at the same time. It has been particularly difficult because all the changes were introduced at such short notice, so we had to run with several models while the reforms were finalised. The time scales have been a challenge and there’s still a lot of uncertainty

within the industry as we wait to see what reforms are introduced next.

In terms of managing the process within a large firm, we always need to look at the customer journey. While accepting we need to run the business efficiently through technological and process innovations, we work hard with our teams to ensure we don’t lose sight of the individual needs of clients.

Q How important is online marketing for Lyons Davidson – in terms of brand development

for both professional partners and for customers. or should the claims handling records and success on paper speak for themselves?

a I don’t see online marketing as fundamental to our business development at the moment.

The relationships we have within the sector are based around insurers and the introduction of customers who have the benefit of insurance-funded services. We see our website as more of a portal, a doorway to management information and file access for clients. The online delivery of information as part of the claims process is really important and we are expanding our online functionality to meet clients’ requirements and expectations. Going forwards, we’re discussing the provision of other legal services to the customers of our insurer clients (including self-service, online documentation with full legal support behind the applications), so online and social media marketing will become more of an important factor for us at that stage.

Q What do insurers ask Lyons Davidson for in terms of support to manage the post-

LASPo / Jackson era?

a We have been involved in a number of conversations around the post-LASPO implementation,

which is where our strategic relationships come into their own. A lot of organisations wanted to see what the immediate reaction would be to LASPO (and some of the initial solutions) by the regulators, the public and the industry as a whole. Now that a number of companies are putting solutions in place, there is an increasing desire to

look at which of those work best. The dust hasn’t settled yet but there is far more positive interest in the benefits of ABS, especially by insurers. There are other business models that we are discussing that allow both parties to share value while potentially putting in place a structure that could later be moved into an ABS. We are also looking at models that could help insurers implement their Solvency II measures.

Inevitably, the experience we have had on the motor side, from a process and technology point of view, has also been useful in helping to advise insurers on their approach to EL and PL changes to the Portal. For example, we have developed our technology as stand-alone software that insurers can implement themselves – again, part of our strategic offering to insurers.

Q What challenges face the firm and the sector in general now the dust has settled?

a I don’t actually think the dust has settled. We’re still waiting for the next whiplash

reforms and to see how claimants and defendants adapt their behaviour to the vertical Portal extension and the inclusion of EL and PL. While the increase in the small claims limit now seems unlikely after the Transport Select Committee report, we still need the final Government response. One of the biggest challenges is to see how the courts are going to respond to all the recent Jackson reforms, especially in relation to costs, and to see how well prepared the judiciary is in implementing these changes.

Q Do you see any other changes being introduced as part of the reforms within the claims industry?

a I think it’s clear that there will be a change in the status of medico-legal reports and their

cost. I also think we’ll see the role of physiotherapy fundamentally change within the claims process as part of an attempt to move from a compensation-outcome focus, to putting treatment first. There was a clear reference to this possibility in the TSC report and I can see this being expanded. This would allow better management and


Mark Savill Interview 13

“one of the key influences in our relationship with admiral is the importance to them of culture; we’ve learnt a lot from the way that they work ...We’re not too far apart ethos-wise which has helped in our approach to working together.”

understanding of the prognosis and could lead to a two track process with treatment reports becoming more important in less serious injuries.

Q Do you expect, as suggested by tim oliver, Parabis Group, in issue 2 of Modern Claims, that there

will be half a dozen or so defendant law firms in a year’s time thanks to ABSs and the need for scale? What impact will this have on the market?

a Clearly there has been a lot of consolidation and there will be more. But insurers are looking for

more specialist services rather than scale alone. They want to work with partners who can innovate and work with them to build solutions. There are a number of efficiency solutions: risk-reward models, co-sourcing claims teams and structures that allow controls on the cost of delivery and claims spend. While the current focus is on claimant solutions, ABSs will make a difference in the defendant legal sector, especially as the SRA is looking to relax

the rules on separate business rules, and I expect this to become more of an interest for insurers.

Q Are claims teams becoming increasingly deskilled in light of the pressure on costs and

the portal? Is there a danger here of losing specialist skills within firms or are scale and the widespread use of paralegals (for example) needed to offer the best value services for customers and partners?

a I think ‘deskilled’ is the wrong word to use. Claims teams need to be appropriately skilled so that they

have the right experience to run claims at each stage within the process. The reality is that the Portal has simplified the process, but management of MoJ Portal claims need to be handled with in a specific way that needs key information to be summarised and communicated effectively. We work with insurers to structure claims teams correctly, with the right level of supervision. We are

fortunate to have the scale that also allows us to support specialist teams of litigators across all areas and ensure that the supervision and risk assessment process routes claims to the right teams. We have always looked beyond the need for a solicitor’s qualification, being one of the first firms to promote FILEX to partnership, and promoting experienced paralegals to partner equivalent senior management positions.

To get this right means we have to ensure training is delivered correctly. We have been in the forefront of promoting this in the legal market and this is one of the reasons why we were selected to be closely involved in the development of the Legal Apprenticeship scheme in England, Wales & Scotland. The scheme encompasses learning on the job but with the added benefit of government funding for formal training and a nationally recognised qualification. In the current economic climate this is an obvious answer to broadening access to the profession.

14 Mark Savill Interview

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“Having a strong brand is more important than ever. the growth of price comparison sites means that consumers see a list of

prices and have limited information to decide who they want to go with. that decision will be based around their perception of

your quality, reliability and trustworthiness.”

Peter Horton, the Chief operating officer at LV= General Insurance and MD of Britannia rescue, speaks to Emma Waddingham about how the brand ensures it meets it’s ‘best loved’ insurer status and what customer service really means in the claims department.

Interview with...PETEr HOrTON Lv= General insurance

Q the LV= brand experience is about customer service and going the extra mile for policy

holders. How successful has this approach been to date in terms of customer brand awareness over cost of policy (i.e. the use of aggregators, that don’t necessarily highlight excellent customer service)?

a Having a strong brand is more important than ever. The growth of price comparison sites means

that consumers see a list of prices and have limited information to decide who they want to go with. That decision will be based around their perception of your quality, reliability and trustworthiness. Through consistently high quality marketing the LV= brand has become one of the best in the market, in fact YouGov research shows that we have the highest ‘quality’ score of any insurance brand. It’s important that we back that up with a service that matches this perception and we’re proud of the fact that 96.5% of customers are satisfied with the service we provide.

Q How do you manage initiatives such as the adverse weather projects (for example, during

times of regionalised flash flooding) across call centres and teams to ensure everyone is on message – or is that culture embedded into the company already?

a We have dedicated people who are responsible for owning our Surge plans. [Surge is our

response plan for adverse weather events.] The plans are very detailed with contact information for people so that they can be reached 24 hours a day. The plans are reviewed and updated on a regular basis. We take advantage of the peaks and troughs of

the business to cross-train people from different areas, so that in the event of a surge of claims we can flex the numbers of people working on different parts of the business. For example, in winter we get fewer customer service calls but more claims calls. It makes sense to get our customer service staff working in claims at this time. This helps with our ‘best loved’ vision. ‘Best loved’ by our people, as they get access to different parts of the business to help with their future careers and interests. ‘Best loved’ by our customers, as they get an improved service. ‘Best loved’ by our members, as this is more efficient and cost effective. I went to the US and worked with major insurers over

there to study how they deal with surge events. I brought back certain key aspects, which we have implemented in our own surge plans. For example, the weather forecast is continuously monitored on a nationwide basis working closely with our suppliers. If we know there are flood warnings in a particular area, then we would text our customers in the area to warn them and give them advice on how to safeguard their possessions. Following an event in a particular area, we have immediate downloads of our customer details in the area that may be affected and we proactively call them to make sure we are looking after them even before they’ve made a claim.


16 Peter Horton Interview

Q What type of management and customer care ‘vision’ is key for LV=’s brand success and how

do you instil that?

a Instilling the ‘LV= Cares’ message begins at recruitment. We recruit people with the

LV= attitude who are prepared to go the extra mile for our customers and deliver the highest standards of customer care. We don’t just look for people with experience in insurance but will interview people who show they have the ability to deliver excellent customer care under pressure from other sectors. Our people are key to our success and so it’s vital that we get people with the LV= attitude in. Once new recruits join us, we have an extensive induction and training programme to show people how we demonstrate the values through the work that we do. As a fast growing mutual, we believe in being ‘sharp with a heart’, this means delivering the high performance of a PLC but with the behaviours of a customer-focused mutual. You can really see how people live the values when we get a surge in claims resulting from an adverse weather event. Last year when we had a huge snowfall, in one of our call centres not one person called in sick or said they could not get in because of the snow. They were all determined to get in and look after our customers and it is this attitude that sets us apart. We ask our people to ‘wow’ our customers. This means not just delivering the service they expect from an insurer but going beyond that to really exceed their expectations. One example of this is giving each claimant a dedicated claims handler that manages their claim from inception to resolution. This way the customer does not have to deal with multiple departments but can get everything they need by dealing with one person.

Q How do you manage these initiatives during a recession and profit?

a The proactive initiatives we take actually save the company money. Significant amounts of

money are saved in mitigating people’s losses; for example, by advising those in flood risk areas to safeguard their possessions. We ensure that we have excellent relationships with our suppliers and empower our people to make interim payments, to ensure that action is taken to reduce losses. We firmly believe that investing in customer service is essential and that cutting back on customer service is a false economy. The insurance marketplace is extremely competitive with customers shopping around more than ever. If you don’t deliver an excellent service, you will lose a customer and then spend more money on marketing to try and get them back.

Q How do you measure / qualify customer satisfaction (other than an increase in policies sold?)

a We ask a number of customers to participate in anonymous surveys and tell us about the

experience they have had with LV=. These surveys are very telling and show us what is working and what is not. We use these surveys to test new initiatives and to improve any areas where customer satisfaction falls. In addition, our marketing team carry out research with consumers to establish general brand awareness and to identify what words and values are associated with LV=.

Q What is making it harder to meet customer satisfaction or command innovative customer

care initiatives (i.e. restraints on the sector, regulation, etc).

a Our overall customer satisfaction , which is independently measured shows

that 76% of customers are very or extremely satisfied with the quality of people and systems and processes that we have in place. Great customer service is embedded throughout our organisation.

“if we know there are flood warnings in a particular area, then we would text our customers in the area to warn them and give them advice on how to safeguard their possessions. Following an event in a particular area, we have immediate downloads of our customer details in the area that may

be affected and we proactively call them to make sure we are looking after them even before they’ve made a claim.”

Peter Horton, Chief operating officer, LV= General Insurance & MD, Britannia rescueAs part of his role, Peter has overall responsibility for LV=’s operations unit of over 2,700 staff. Peter has been in the insurance industry for 30 years and was there at the start of Direct Line, which transformed the entire industry, working alongside Peter Wood and Martin Long. He was also one of the founding Directors of Churchill Insurance.

An ebullient character; Peter is well known in the industry for his enthusiasm, knowledge and commitment to his job. His approach is one of focusing and developing people to offer the best possible experience to customers.

Peter joined LV= in 2006 as part of a ‘turn round team’ and has made a huge difference in that time. The operations unit including sales, service and claims, has changed dramatically in the last five years. In 2006 the company had a poor reputation for its service, high fraud rates and over 40% staff turnover. LV=’s operation is now one of the highest rated in the industry, having won 18 awards over the last 12 months including a Which People’s Choice, a Personal Finance award for customer service and has 92% satisfaction scores amongst its customers.www.lv.com


17Peter Horton Interview

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Xuber ClaimsMore efficient than...

Q What, in your view, were the Jackson reforms initially set out to achieve and has this been realised?

a The Jackson review was stimulated by the Master of the Roll’s concerns over the rising costs of civil litigation in the aftermath of the major

changes to the way litigation was funded - including the withdrawal of Legal Aid and its replacement with (recoverable) conditional fees. I think the package of reforms recommended by Jackson would have provided the appropriate incentives and controls to address these concerns without seriously impairing access to justice.

Q Why did you agree to write the response and recommendations to the reforms?

a If by this you mean my evaluation of the RTA Portal, I undertook this at the request of the MoJ; I was concerned about the lack of an evidence base and I

had ideas for how such evidence could be generated.

Q What are your main concerns raised by the reforms for both the claimant and the wider sector?

a I have concerns about the potential for unintended consequences which may lead to valid claims not being pursued, settlement amounts being reduced

and the legal services sector adapting in ways that may or may not be beneficial. These unintended consequences could flow in part from the likelihood that the new Portal fixed costs are insufficient to cover client acquisition costs, so that these will be recovered from the client via an enhanced success fee. In addition, the flat-rate nature

Since the Jackson reforms to costs in civil litigation came in to force in April 2013, many have been waiting with baited breath to see what impact they would have in practice. Professor Paul Fenn - well known for his research undertaken for the MoJ on personal injury costs and having been commissioned by the Government to write a response to the Jackson reforms - is one of those. Charlotte Parkinson asked Professor Fenn for his thoughts on the aftermath on the report, in particular, the reaction by government.

“the flat rate nature of the Portal fixed costs could yield little incentives for

solicitors to maximise the settlement amount on behalf of their client.”

Interview with...PrOfESSOr PauL fENN

Professor Paul FennPaul Fenn is Professor of Insurance Studies at Nottingham University Business School. His research into the legal costs of personal injury claims was influential in determining the eventual structure of the Fixed Recoverable Costs Scheme (FRCS) for low value motor accident claims. He was also involved in research on appropriate levels for success fees in Conditional Fee Arrangements, and was subsequently asked by the Ministry of Justice to undertake a review of the FRCS, and, more recently the RTA Portal process. He was one of seven Assessors assisting Lord Justice Jackson in his Review of Civil Litigation Costs and is currently an advisor to the CJC’s Costs Committee.


Professor Paul Fenn Interview 19

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of the Portal fixed costs could yield little incentives for solicitors to maximise the settlement amount on behalf of their client. However, if the adaptation by solicitors involves a move to use CFAs with success fees capped at a proportion of damages, or to DBAs, then this incentive effect may be reduced. The effect on claimants’ willingness to claim given the deduction of a significant share of damages is something that will require time to reveal.

Q Is the Government doing enough to improve access to justice for claimants?

a I don’t have a view on this, as it is not straightforward to identify what is the ‘right’ level

of access to justice.

Q How damaging has/could the Government intervention following the Jackson reforms

be, in terms of add-ons and overriding initial policies Jackson set out?

a The main problem in my view stems from the Government having imposed an extension

to the RTA Portal fixed costs, without recognising the need for integration with Jackson’s proposed fast track fixed costs regime. This will be damaging in terms of the distortion to incentives because the reward to defendants from staying in the Portal scheme and admitting liability could be excessively high. Too many claims will be undisputed, even where the

case may be weak. By contrast, once claims are outside the Portal, there will be a strong incentive for claimant solicitors to litigate in order to increase the recoverable fixed costs.

Q What impact did the lack of clarity in the data provided from the Portal have on

your report?

a It made it more difficult to obtain a precise measure of the impact of the RTA process

because the evidence needed to be drawn instead from a limited sample of claimants and defendants.

Q Is the MoJ transparent enough about its review processes or does Jackson’s initial

proposal for a Costs Council need to be realised?

a The MoJ has supported the creation of the Costs Committee of the Civil Justice

Council, but this has not been given responsibility to oversee the fixed costs regime in the Portal and elsewhere - which I think is a mistake.

Q Do some insurers neglect claimants because they are worried about the bottom line?

a Insurers quite rightly fight claims which they feel are unjustified. However there

is a tendency to view all claims as cost-generating events, whereas the payment of valid claims is of course their core business.

Q to date – has the Portal set out what was initially intended?

a The evidence I’ve seen seems to suggest that it has had a small effect in reducing costs

and delay, which was presumably as intended but not as big as was expected. It may also have had some unintended effects on damages and on defendants’ admission of liability, as explained in my report.

Q Why do you think the Government ignored your suggestions?

a I don’t feel they totally ignored my suggestions because the Jackson fast track fixed costs

were subsequently incorporated for claims outside the Portal. My further concerns, over the need for a better integrated set of proportional fixed costs within the Portal, were perhaps inconsistent with their views on the need for extensive reductions in Portal fixed costs.

“the moJ has supported the creation of the Costs Committee of the Civil Justice Council, but this has not been given responsibility to oversee the fixed

costs regime in the Portal and elsewhere, which i think is a mistake.”

“my further concerns, over the need for a better integrated set of proportional fixed costs within the

Portal, were perhaps inconsistent with their views on the need for extensive reductions in Portal fixed costs.”


Professor Paul Fenn Interview20

21-38

THE OPiNiONS


The Opinions 21

Sector soapboxthose representing the views, expertise and professionalism of sector professionals in the claims industry are the first point of call for a ‘helicopter view’ of how the industry is reacting to change, how fast it can adapt and what could be done to improve outcomes.

“We have noticed a rise in complaints over recent years by the insured where they feel they are not being properly treated...To succeed you need to put yourself in the shoes of the insured and empathise with them. It’s important to understand precisely what they feel aggrieved about and then find a pragmatic solution.”

Consistent regulation

S ince the latest round of reforms were introduced in April, MASS

has been highlighting that there are a number of real and potential problems with the referral fee ban and ABS structures. Although it is still early days in fully understanding the impact of the reforms, we continue to have a number of concerns.

Our view is that there are two key themes for the regulatory framework to address: consistency and communication.

All three regulators, the CMC regulator, the SRA and the FCA, have responsibility to regulate very similar practices within the field of road accidents. This inevitably complicates matters for organisations that have to deal with more than one of them, with CMCs potentially having to deal with all three. A prime example of this has been the ban on enticements to claim.

If one regulator has decided to outlaw a practice, then it must make sense that they must collectively do, otherwise, as we are seeing, the ban will be ineffective because some will seek to continue these practices through a different regulator.

The ban on enticements should not be seen as merely affecting CMCs and solicitors. A lot of people seem to be missing the point that a pre-medical offer is also a type of enticement. The insurer who says ‘we can settle your claim direct without the need for you to undergo a medical examination’ is clearly offering an enticement to bring a claim. So when we talk to the regulators, we are highlighting that this is an example of an unintended consequence of the lack of consistency across the board.

MASS has been assured there are regular meetings between the regulators and this is where our desire to see more effective communication is important. We have seen with the piecemeal way the changes have been introduced that regulators have been on the back foot.

We do though have a real concern over the impact this will have on the individual client when the entity looking

our sector representative organisation columnists: the Association of British insurers (ABI); the British Insurance Brokers Association (BIBA),

the Motor Accident Solicitors Society (MASS) and; the Forum of Insurance Lawyers (FOIL) were asked to raise the issues affecting members now the post-LASPO era is in full swing, as well as reflect on sector responses to the changes in terms of business direction, from marketing to regulation.

after the client is regulated by more than one regulator - whether this be an insurer-solicitor or CMC-solicitor ABS. This area is fast becoming a minefield when it comes to conflicts of issues and the hope is that, because the application process is so vigorous when the ABS is applied for, the regulator can ensure: how the individual client is to be looked after and how potential conflict will be dealt with, which can be referred back to the original application.

Consistency and effective communication between the three regulators is vital to create a level playing field across the sector.

Craig Budsworth, Chair of MASS

Customer conflict

“I have been driving for 40 years and have never had an accident. It

can’t have been my fault” - words that strike fear into the heart of any lawyer acting for insurers on motor claims.

The conflict between the insurer and the insured has been brought into the spotlight with the advent of joint venture ABSs between insurers and law firms.

In truth, this issue has been bubbling under the surface for many years. The potential conflicts between the insurer and the insured are legion.

There are three examples which cover the spectrum: • the insured does not think that they are at fault when

clearly they are;• the insured probably is not at fault but does not want

any more to do with an event which has been upsetting and very stressful;

• the more so where there has been serious injury to the third party even if the insured was blameless.

Finally, a commercial view is taken on settlement - typically 50/50, where there are no independent witnesses to support either version of events and the insured’s no


The Opinions22

“Claims are the insurance industry’s shop window. A policyholder never gets to ‘try out’ the product until they

are unfortunate enough to claim from it, so it is imperative that when they need it, it works.”

claims discount will be affected.We have noticed a rise in complaints over recent years

by the insured where they feel they are not being properly treated. Even where the terms of the policy provide all the answers with a duty to assist insurers, subrogation etc the insured is not satisfied.

Whilst each individual circumstance must be considered on its merits, there are normally a number of simple fixes available. To succeed you need to put yourself in the shoes of the insured and empathise with them. It’s important to understand precisely what they feel aggrieved about and then find a pragmatic solution.

In the vast majority of cases that will resolve a tricky situation. However, with the increasing pressure to resolve claims more cost effectively (which means taking less time) and consumers’ ever-increasing appetite to complain, the problem is not going to get any more straightforward.

It is time to acknowledge these issues and agree how to deal with them. FOIL has raised this issue with the Solicitors Regulation Authority. It understands the predicament and has agreed to consider whether any indicative behaviours can be included in the SRA Handbook to help minimise this source of friction. I await its response with interest.

Rod Evans, President, Forum of Insurance Lawyers (FOIL)

A change in attitude

Q: Have the LASPO and Jackson reforms, affecting the civil

claims arena, had an impact on the ‘compensation culture’ and already started to drive down the existence of oft-called ‘ambulance chasing’ tactics by the claimant sector?

A: The changes to no win, no fee agreements in the post-LASPO

era means that claimants are now taking more of an interest in the legal service being provided. What is key here is that the end consumer, pre-Jackson and LASPO, would never have paid. Legal costs would have been covered by the defendant insurer, or the claimant would never have paid because they lost the case. Now costs have spiralled out of control and the new reforms have come in, claimants are more interested in where their money is going and the level and quality of care they get as a result of paying that fee. Claimant lawyers are now marketing themselves in a more upfront and competitive manner and I think we’ll see even more changes and marketing focused on customer care going forwards.

In terms of the ambulance chasing culture, we are already seeing a huge culture change as the incentives for claims management companies have dropped off. The ABI line has always been for the Government to ban referral fees, although we accept that insurance companies have also been part of the problem in this area. However, LASPO has been welcomed by the insurance sector to tackle the spurious fees in claims which got out of control. Our members have always been committed to paying honest claims rather than fuelling the compensation culture. It is too early to see how things have changed in the new era but we can already see the positive effect on the industry

and we don’t expect to see spurious claims activity to the same extent going forwards.

Samantha Ramen, Policy Adviser, Compensation System, Association of British Insurers (ABI)

Q: Claims products: are they working?

A: Claims are the insurance industry’s shop window. A policyholder

never gets to ‘try out’ the product until they are unfortunate enough to claim from it, so it is imperative that when they need it, it works.

BIBA has a great deal of interaction with its members and late last year, we were receiving a lot of feedback, from

brokers large and small, with claims issues. BIBA surveyed its members and found that since the economic downturn, insurers were becoming stricter in paying claims.

Following these findings, BIBA set the wheels in motion to form a Claims Working Group with our colleagues at the Association of British Insurers, the Chartered Institute of Loss Adjusters and a selection of our respective members. The group was set up at the same time that Martin Wheatley, The Financial Conduct Authority’s new Chief Executive, took to the stage at the BIBA conference and announced to a packed audience that the regulator would undertake a thematic review of claims.

The first meeting of the working group was a positive one and we agreed the following terms of reference:• To engage positively with the FCA thematic review • To discuss ways to enhance the customer’s experience

and understanding of the claims process • To foster wider public understanding of the role of the

insurance industry in meeting claims

With the belief that fostering a wider public understanding of the claims process would help to enhance the customer’s experience, actions were assigned to develop a guide for consumers which would help to explain the roles of loss adjusters, insurers and brokers in a claim, and talks about the most common types of claim and why they might be rejected.

The working group meets again soon and we look to progress this positive relationship with our colleagues at CILA and the ABI, to enhance the experience that policyholders have, and ultimately improve the public perception of our important industry.

Graeme Trudgill, Executive Director, BIBA


The Opinions 23


24 The Opinions

Q: How much value does an insurer ABS / joint venture (JV) add to the customer? Are you concerned or optimistic about the number of joint venture / insurer-led or backed ABSs venturing into the claims market? Does the regulation of JVs concern you?

A: An insurer ABS or joint venture can greatly enhance

the customer experience; if both parties – insurer and legal firm - deliver what they promise and manage claims correctly. For the customer, it should mean a much more integrated claims process that puts their needs first and

speeds the resolution of their claim. At the same time, it offers customers with genuine personal injury claims a valuable service rather than leaving them to the compensation frenzy that has previously existed.

Earlier this year we formed Ageas Law (in partnership with personal injury specialist law firm, NewLaw) to provide legal services for customers making non-fault personal injury claims. We saw this as an opportunity to provide our customers with a claims service that exceeds what they may have expected; streamlining the process of making a personal injury claim after a motor accident through access to a trusted legal solution. This fully integrated approach, we believe, improves access to justice, increases confidence in legal services and drives out fraudulent and spurious claims.

With no referral fees paid and much fewer hand offs to third parties, it also means we are tackling some of the costs associated with managing motor claims, helping to drive down the cost of motor insurance.

Of course, there are some concerns regarding conflicts of interest and how the right balance can be struck between the interests of the insurer and the consumer. For us, the solution was simple – an Ageas Ethics Committee was put in place to monitor activity and compliance with ABS standards. The committee, made up of independent non-executive directors, is able to scrutinise all areas of claims and recommend any changes to the process.

In a market as competitive as private motor, we need to find ways to add value to the customer proposition and an ABS can help achieve this. Ultimately, managed correctly, an ABS should deliver a high quality customer experience via a reputable and controlled supply chain.

Andy Watson, Chief Executive, Ageas

Q: With the decline of CMCs, will insurers fill their marketing space (especially online) with third party assurance advertising?

A: The referral fee ban, coupled with the reduction

of predicted costs to an unsustainable level, has led to a number of high ranking domain name owners seeking to exit the market by selling the domain name registration. Our own experience is that vendors have unrealistic

expectations of the value of these domain names, particularly as the ranking of any name will rapidly fall without continuing maintenance and investment.

The number of CMC type domains competing in the Google/bing/Yahoo, etc, marketing channels will diminish fairly rapidly as the referral fee ban continues to bite. That will leave only the bigger names, with much larger budgets, to slug it out together. These names will either be under common ownership with an ABS licensed body, or supported by some sort of co-operative scheme to provide a critical investment mass.

To counter this tilt in the market, we anticipate that insurers with an ABS licence, of which there are now quite a few, will actively use their relationships with their policyholders to steer non-fault insured’s towards their own litigation subsidiaries.

Defendant litigation will of course remain in-house - small comfort for FOIL lawyers. For non-fault insurers it will be ‘business as usual’. Before the ban came into effect insurers actively promoted claims for injuries and profited handsomely from referral fees received from panel solicitors. There is no reason why these behaviours should change now that insurers can profit directly from injury claims. Indeed we can expect to see a ‘gold-plating’ of policyholder injury claims when the third party insurer is to foot the bill.

By the same token it will not be long before the practice of third party intervention is extended to the innocent party in accidents caused by insurers’ own policy holders – leading to range warfare in the fight for representation rights. Much money will be at stake, and of course the injured claimant will inevitably lose out.

Last, but not least, these changes are fundamentally damaging to the rights of claimants. Third party intervention is itself detrimental to the interests of innocent motorists. Insurer ABSs equally give rise to a systemic conflict of interest. But then, when have conflicts of interest in solicitor/insurer relationships ever been of concern to the SRA? We shall see soon enough whether the Legal Services Board will take so liberal a view.

Tony Rand, Managing Director, Kingsley Law Ltd


25The Opinions

Q: Are underwriters able to cope with the task of Risk Trend analysis or is it best left in the hands of outsourced specialists? How can the process be simplified?

A: Spotting Risk Trends has always been important,

those who can modify terms ahead of the pack have a huge advantage, both in profitability and building market share. This has become even more important in this modern age where things change so rapidly. In these

days of ‘big data’ there are all sorts of possible trend information, if only you can spot them. To do that you may need help! The star of the Actuary & Maths Graduate is on the rise and - with a shortage of capable people - a number of firms are offering data analysis services on an ‘outsourced’ basis.

So should underwriters try and compete? Or maybe they just accept they are not equipped themselves and look for the best outsource deal? I think it’s a case of ‘horses for courses’ here; if your systems and staff can’t cope then unless you outsource, you are in serious danger of being left behind. Your market share could decline or worst still, as everyone’s selection improves through identifying new risk trends, you will be left with the chaff and profitability will deteriorate rapidly.

Skilled staff and complex cutting edge IT tools cost a lot, so why not just recommend everyone outsource? If everyone outsources to the same providers, what will be the difference that sets your results apart? I believe an underwriter should provide more than just capital / capacity. I believe the numbers don’t tell you everything. Over the years I have seen the painful cost of people thinking that this is all that’s important.

Successful firms, in my opinion, will be those who understand what the patterns in the trends really mean, not just what the numbers add up to. My personal preference would always be to try and do these things yourself - don’t rely on an outsource solution, unless that is your only option. These trends will determine the success or failure of your business. Isn’t that something you should keep as close as possible, even if it is one hell of a learning curve!

David J Williams, Managing Director, Underwriting, AXA Insurance

Q: Are you concerned about uncertainty over the regulation of insurer-legal joint venture ABSs - particularly in light of putting the customer first? If the law firm has an obligation to both the insurer and the client, how easy is it to strike a balance?

A: The Legal Services Act created the principal of an

ABS which has access to justice and the interest of the layman at heart. An ABS is a vehicle to provide this but there are some obvious issues this potentially creates which have been voiced, particularly where an insurer

announces their intention to enter the arena. But why should this be a concern?

So here’s a poor, basic example; assume the insurer is now happy in an ABS with their familiar legal practice. As they possibly have a large piece of the UK motor business what happens when two of their policy holders collide (say a clear fault/non fault incident) and how should they act? They’re bound to adhere to the SRA and the core principals of honesty and integrity with all that expressly and impliedly demands. Not too dissimilar to the TCF policies and other established obligations to treat third parties fairly; nothing to fear then?

But a cynic may wrongly say that the opportunity to mitigate the future claims journey may be too commercially persuasive for it to be dealt with independently. They’ll be the first to call the non-fault driver so do they offer a like for like vehicle during repair or an entry level basic model? Do they enquire about injuries to occupants or not, hoping they may never be presented and if they were how would the legal arm deal with them, pre-medical offer? Bottom bracket valuations? They’d have their insurer partner looking over their shoulder and let’s not forget basically (very basically), an insurer makes profit from collecting more in premiums than it pays in claims and you could see where this hypothetical example leads.

I pity the ABS compliance team, it’s their problem - and personally too. The need for compliance versus profitability in industry is not new. Perhaps the SRA should look to other industries/regulators for guidance? A lot has been learned post banking collapse and financial miss-selling. Bottom line is, the regulation for this type of new breed legal solution should be robust to remove any element of doubt and retain integrity and be seen to be so by the consumer.

Jim Toole, Director, First Response Law

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27The Opinions

Q: Is white-labelling an attractive option for referral-based experts such as costs lawyers, barristers and CHOs, etc? Or should they remain separate? Do one-stop-shops really help drive efficiencies and reduce costs or is this a myth and why?

A: The recent activity within the claims sector over the last 12

months points almost exclusively towards consolidation and co-operation between different sectors within the market. It makes perfect sense where historic revenues are no longer achievable and businesses seek to grind out

extra efficiencies in order to protect margins.

The benefits of a one-stop shop (OSS) approach, whether created organically, or from a series of mergers, acquisitions, or strategic partnerships can prove transformational:

Sales Capability Enhancement: the broader the service offering the consumer, the greater the number of revenue verticals opened up within the organisation. Not only will this serve to enable all aspects of supply chain to be managed in house, but also improves the resilience of the business through reduced reliance on any particular income source.

overheads Amortisation: whilst having the benefits of offering a broader service package of many traditional competitors, the support functions can serve multiple business units delivering greater value at a lower targeted cost.

Process Efficiencies: with an emphasis on outcome management and a constructed end-to-end process delivery system, operators become more productive and effective in delivering the required experience. Technology is a key enabler here in delivering process automation and increased output productivity.

Customer retention: a large proportion of clients are driven to most referral-based experts because of reputation and the degree of customer care offered. Complications and confusion can be all too familiar with various entities dealing with the consumer, in what can be construed as a fragmented and over-crowded service. Not only will a white-labelled option protect and enhance the consumer experience; having a OSS will reduce complaints ratio’s and eradicate distress leading to maximum customer retention.

Andy Whatmough, Director, S&G Response

Q: Are online applications / smartphone and tablet apps the future for cost control (such as legal costs comparison) and are lawyers / claims departments making the most of them? Will ‘apps’ help bring down the cost of claims management or are they too much of a ‘one-size-fits-all’ solution?

A: In terms of customer experience - and how that

customer’s journey with their solicitor (or claims department) unfolds - then yes, an accessible tablet / smartphone solution is vital. But I would raise a warning here for anyone who thinks a simple ‘app’ is a panacea for all ills.

In managing the customer experience and journey, you need much more than what the world generally understands by the term ‘app’. I know of lots of firms who have had an app created for them that, for example, will provide their customers with the ability to submit a photo of an accident. Ok great, but that is one tiny part of the whole journey. What happens next?

You need to ensure that the whole journey is managed consistently and in tune with your back-office IT systems. A simple app will not do that for you.

You need a way for your customer to stay in touch and in the know, throughout the entire process (‘from collision to conclusion’ if we’re talking RTAs). To provide that level of involvement you need a customer journey tool. Eclipse’s new TouchPoint solution provides that - the ability for your customers to stay in touch and informed, 24/7, all using an iPad on their couch (if that’s their preference).

The journey needs so much more than just a quaint sales tool to provide customers with a quick ‘oh that’s nice’. Proper tablet or smartphone access to the claim process is a way in which you can provide a fantastic level of differentiation over your competitors. It’s also a great way to cement a convenient, transparent relationship with your customers and the people they will refer to you in future, seeing as their experience was so great!

Dolores Evelyn, Sales Director, Eclipse Legal Systems

0413

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The cool kidWhy Claims is no longer in the corner of the playground

You remember the kid don’t you? The one who always sported the

latest pair of trendy trainers and got invited to all the parties?

As a department, Policies is a bit like that kid. Sadly, Claims has long sat in the corner of the playground – seen as the poor relation of Policies that manages to garner software

investment with one stomp of a foot. Finally though, as more innovative Claims solutions are being brought to market, it appears as if a balance is being restored. But is Claims really being better serviced?

Front of shelf, with the brightest displays and the grandest of promises, sits Claims software from the high-volume, low-value factories. It’s got the badge alright, and it’s a premium brand at a premium price, but is it fit for the complex, all-terrain path that commercial insurers need to tread?

Specialist commercial insurers are the antithesis of high volume, low value, and software designed for personal insurers is being shoehorned into meeting their more complex needs. It promises much, but is failing to deliver.

On the face of it, the claims process for personal and commercial insurers looks pretty similar – a single client

with a single claim. Yet behind the scenes in the specialist commercial world lies a very different story. Layered policies with high excess points, inter-related deductibles and multiple excess levels; it all means that policy attachment, coverage verification and pain-free settlement are nigh on impossible to achieve smoothly with a system that is used to handling one-dimensional claims.

Whilst many personal insurance companies operate in multiple countries, they don’t tend to transact cross-border. This means that software originally designed for siloed, single country operations lacks the sophistication required to handle the complexity of multi-currency, multi-lingual claims - a huge stumbling block for many.

Many insurers are on a mission to adopt a corporate standard of software from Policies through to Claims, but these shackles are loosening. Bespoke commercial claims software which seamlessly plugs in upstream and downstream regardless of platform, finally means that commercial insurers can get what they really need – Claims software that is fit for purpose.

So whilst the ‘all-singing and dancing’ Claims software does its best to lure you, just consider - the greatest isn’t always the trendiest… or the most expensive.Richard Clark, Director, Xuber

Q: The move to customers buying online has seen them receiving less information about how Motor Legal Expenses Insurance works. Do you anticipate a rise in this type of insurance being purchased and how will this impact the claims market?

A: Legal Expenses insurance has been the subject of

FCA scrutiny in recent times with concerns being raised about the level of understanding of the cover provided and how it is sold. The insurance market needs to respond constructively to these challenges in the knowledge that this product has

an increasingly important role to play in enabling access to justice for claimants at a reasonable cost.

The judicial changes introduced in April this year to remove the recoverability of success fees and ATE insurance premiums have left customers with a choice: buy legal protection up front for under £30 per year or face having to part with up to 25% of damages under a DBA or CFA in the event of a claim.

As consumers become more aware of the value of this cover, market penetration should increase reducing the need for CFAs or DBAs funded by the claimant. Inevitably this will drive a further concentration of the claims market to those larger and hyper-efficient personal injury law firms on the before-the-event (BTE) underwriters’ panels.

This will add further impetus to the consolidation in the personal injury claims market.

The majority of the BTE underwriters will have relationships with those law firms to enable them to manage their end-to-end customer service proposition and share profits generated through the legal process - either through an ABS or some other compliant model. In a market as competitive as UK motor insurance, any additional profitability for insurers that this generates will be passed on in lower motor insurance premiums providing a further benefit for consumers.

What solicitors and insurers should be wary of are models that require customers who have paid for BTE cover to also give up a proportion of their damages to fund legal costs and create additional profitability. This will devalue the benefit of legal expense insurance in the eyes of the consumer and the regulator as well as jeopardising the reputation of both the insurer and the solicitor.

There should be a clear choice: pay a small premium up front to cover the possibility of legal fees or risk sacrificing a portion of the damages should they need to make a claim.

Peter Horton, Chief Operating Officer, LV=


29The Opinions

Emma Waddingham reports exclusively from Westminster on the recent All Party Parliamentary Group roundtable on the future of legal services. Rob Terry, Group CEO of Quindell Portfolio PLC speaks to Modern Law about how he manages standards and clients across one of the largest legal services portfolios in the country. The People’s lawyer: Greg Shields asks if law fi rms are actually any good at putting people fi rst.

“The suggestion that ABSs are in some way unethical is a line their opponents have taken from the start...

The illogical attack is nonsense and fundamentally fl awed”

PROFESSOR STEPHEN MAYSON

March 2013 | Issue 5 | ISSN 2050-5744 The Business of Law

“Barristers contribute to the reform of law, assisting government and doing so for free –

you can’t label, regulate and commoditise

this, which the LSB is sometimes keen to do”

Maura McGowan QC, Chairman of the

Bar Council

Mo

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2013

| Issue 5

Charlto

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SBT1396 Charlton Grant Modern law Issue 5 v3.indd 1 28/02/2013 16:26

The Business of Law

Supported by

The fi rst ever Modern Law conference: ABS: the new frontiers of law. Emma Waddingham summarises an extraordinary event

Sector roundtable: MLM hosts a debate to see if the legal sector is pioneering or fearing the extensive innovations in IT. Dom talks news: Jackson: the cases you need to know!

“Why wouldn’t we as corporate brands want to change the rules? Consumers will look to the big brands and why wouldn’t they?”

MILES JOBLINGBT LAW LTD

June 2013 | Issue 6 | ISSN 2050-5744 The Business of Law

“There are diff erent points of entry

for diff erent legal needs, which

will fuel (or not) commoditisation...

and those that can’t compete won’t be

here for long,” Helen Molyneux,

NewLaw

Mo

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| Issue 6

Charlto

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SBT1426 Charlton Grant - Modern Law Issue 6 v4.indd 1 07/06/2013 10:08

www.modernlawmagazine.com

Have you seen our sister publication Modern Law Magazine?

To arrange your free subscription please e-mail [email protected]

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Q: Large and complex risks are often covered by co-insurance, but in the event of a claim does it hinder the process to involve a number of parties with potentially differing views? Is there a better way?

31The Opinions

A: If placing brokers cannot find an insurer with enough capacity

to cover large and complex risks, they generally obtain cover with a lead insurer and seek co-insurers to follow the lead insurer’s policy terms and conditions. Frequently the lead insurer can make decisions about wording changes, extensions,

premiums and claim settlements and bind the follow insurers to those decisions. The leader has authority to settle claims on behalf of all underwriters, usually with the concurrence of the second underwriter.

Construction and Onshore Energy lines often utilise a different method. Each follow co-insurer may become an agreement party when the contract terms are finalised – i.e. each insurer agrees their share of any claim settlement. With a large loss, insurers meet and discuss claim protocols, decide which loss adjusters and other experts to appoint and the work to be carried out. Regular follow-up meetings take place, to agree revised instructions to the experts as the claim develops and to give the required authority to agree settlement of the claim. This system could be more efficient to benefit

both the insured and the market.By ensuring the insurers on the programme have a

common philosophy, a speedy settlement in the event of a claim is much more likely. A split market situation can be detrimental to everyone. If a lead insurer has indicated to the client or broker that the claim will be settled but the process is held up by differing opinions within the programme, the whole insurance market is shown in a poor light.

A resolve to complete the process promptly is in everyone’s interest; it can cause considerable difficulties later if one of the programme’s insurers wants to settle the claim and another opposes it. If a claim comes in, co-insurers should agree early on whether it’s covered. Good communications are important so that if an issue arises it can be addressed without undue impact on the settlement process.

Subject to policy terms, insurance is a promise to pay. We need to keep this in mind when building an insurance programme and settling claims. A broker would be wise to recommend to the client an insurance arrangement where all insurers share a philosophy to pay claims, rather than be guided purely by premium charged.

Paul Slaven, Claims Manager - Property - International Property & Casualty Insurance, XL Group


Q: With the advent of the extended portal and lower fixed recoverable costs for a larger volume / type of PI case, where will the main battle ground be with regards to claims cost?

A: The recently introduced changes to both pre and post issue costs

for EL / PL and RTA claims valued up to £25,000 are very much in their infancy. It has yet to be seen how the large reductions will impact on claimant solicitors’ behaviours and processes for dealing with such claims within the extended portal.

What would appear intuitively certain is that those firms that are going to be successful in the new era will have to change somehow, in order to accommodate the new costs environment, whether it be in respect of a change in processes (to include enhanced automation) or a downgrade in the skill set of individuals handling cases of this size. It would appear that adopting a ‘business as usual’ approach will simply result in ever decreasing profit margins on cases.

On the basis, therefore, that changes will occur, the question is then what will be the impact of these changes in processes / skill sets on the quality of the claims presented? The answer to which will, in my opinion, create the battle ground(s) for challenges to overall claims cost.

Arguably, given the much reduced fixed costs that

claimant solicitors are going to get in either the pre or post issue position, it would appear there will not now be significant costs sanctions for insurers challenging certain heads of claim. Such that, claims that were simply paid off in the past to avoid adverse costs consequences, could now be subject to enhanced scrutiny.

In sub-£25,000 valued cases, once general damages are reasonably assessed in accordance with JSB guidelines, it may well prove to be the case that one of the larger heads of claims (and hence areas of contention) proves to be the loss of earnings area.

The assessment of loss of earnings in upper portal cases, i.e. above £10,000, could prove to be a conundrum, as it is difficult to proceduralise and requires a degree of technical input -which counters the required changes to maintain profit margins.

How claimant solicitors solve this conundrum could determine whether or not this area becomes hotly contested. Poorly presented claims will potentially prompt insurers to contest them either utilising internal resource or businesses like our own on an outsourced basis.

Richard Forth, Managing Director, Forths Forensic Accountants

XL GroupInsurance

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Q: Is the sector showing greater signs of collaboration in terms of settling motor claims? What might be being gained / lost here?

A: Scorpion Claims is a personal injury law firm

based in Luton. One of the partners picks up a dodgy claim from one of his mates and runs it in a way that is clearly fraudulent.

You may be hearing more of Scorpion Claims but, if you do,

it will be in the theatre columns rather than the legal or insurance press. The partners of the firm are in fact members of the dramatis personae of ‘the Same Deep Water as Me’, a play featured in the Edinburgh Fringe. A recent review explained the plot was: ‘About the ‘no win, no fee’ compensation culture that has led to so many of us paying grotesquely inflated car insurance premiums as a result of accident claims for often fictitious injuries’.

Whatever your view of the extent to which the above reflects contemporaneous issues in the personal injury sector and, indeed, society, it would seem to be clear that this type of unedifying debate does not comprise evidence that insurers and solicitors are successfully collaborating in settling motor claims.

The question I pose is a simple one: Why can there not, immediately, be greater collaboration regarding fraudulent claims?

The knee-jerk response is that this is not possible. The Jackson reforms, reduced fees and the Law Society’s anti-insurance PR campaign are all factors cited as reasons why relations between insurers and pi solicitors are at an all time low.

The reality is different from the rhetoric. Just look at the common ground. Although fraud has a serious economic impact on insurers it is also bad news for claimants’ solicitors. If it transpires that a claim is evidently fraudulent, the solicitor is unlikely to be paid and may also suffer reputational damage.

One of the obstacles to progress appears to be that if insurers share data with solicitors they do, in effect, risk sharing it with the likes of Scorpion Claims - and so assist fraud rather than attacking it. I am convinced, having seen solicitors and insurers work closely together in organisations such as Claims Portal Limited and the Civil Justice Council, that this is a problem that can be managed. The rhetoric between insurers and solicitors may continue, but greater collaboration on fraud should start now.

Tim Wallis, Mediator, Solicitor, Director, Expedite Resolution


33The Opinions

Q: Is the sector showing greater signs of collaboration in terms of settling motor claims? What might be being lost / gained here?

A: The recent furore between insurers, over the practices

of RSA in seeking to profit from their commercial leverage in the accident damage marketplace, suggests that all is not well in the motor claims arena. Throw into the mix the seemingly never-ending sagas of credit hire, third party

compensation for supposed whiplash, the investigation by the Competition Commission into claims costs and responsibilities, and it would seem that the picture is as confused as ever.

However, while there is always an argument that collaboration is good for the industry and the consumer - in that it reduces overall costs (and potentially premiums) - it should also be remembered that we live in a competitive world. The multiplicity of bi-lateral agreements now being struck between insurers (on a whole host of issues) can have the unintended consequence of protecting the weaker members of the claims community, at the expense of the strong.

Why, for example, would an insurer with an especially good expense ratio necessarily want to ‘share’ that expertise with a commercial rival through collaboration-type deals?

That is not to say that collaboration per se is a bad thing. Counter fraud initiatives are clearly a cross-industry issue that benefit all parties and society as a whole by uncovering criminal activity. Should we ever see new agreements on defining whiplash, the proper use of qualitative medical reports, and follow-up rehabilitation efforts, there may be some collective financial benefit to insurers and the genuine claimant if the total number of claims declines.

Nevertheless, every insurer has its own business to promote and operate profitability. It is the effect of external competition and internal productive efficiency that ultimately leads to lower premiums for the consumer and higher profits for the insurer. Nor should we assume that only the larger insurers can accrue such benefits – a glance at the Combined Operating Ratios of some of the major insurers goes to show that size isn’t everything in the motor claims market.

So, the continuing clarion call for co-operation should not be confused with the equally strong need for competition. The former should not be undertaken at the expense of the latter. For so long as there is a league table of the ‘good’ and the ‘bad’ in the claims arena and participants continue to innovate and fight for commercial advantage, then we can assume that all is reasonably well - if a little frayed around the edges!

Eddie Longworth, Sales & Marketing Director, Parabis Claims Solutions

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35The Opinions

Q: How will post-LASPO affect the risk profiling of the personal injury sector for PII renewal this year, and subsequent years?

A: This year’s PII renewal season is now upon us. In

the face of post-LASPO, there is an obvious sense that some underwriters are approaching this season’s renewal with more caution than previous years. With the swathe of changes within the personal injury sector and

the aftermath of Atteys and Blakemores earlier this year - against the backdrop of a legal market that is being challenged in all areas - it is not surprising that underwriters are expressing caution.

An increasing number of personal injury practices are looking toward niche areas such as industrial disease, clinical negligence and catastrophic injury. At a recent RBS seminar presented by broker Tom Davies, H.W. Wood Limited, I canvassed opinion as to how underwriters might approach firms looking to move into these areas. Firms will be expected to demonstrate they have sufficient experience in-house, or if not, that they have recruited and have set up the appropriate systems to deal with niche areas. Having a broker that understands the individual law firm will be more significant than previous years. Underwriters will be looking at how personal injury firms have adapted to the Jackson reforms. Some may want to look more closely on the re-structuring of volume based RTA practices.

Post LASPO, M&A activity has encouraged professional indemnity insurers to look more closely at deals being made within the sector. The six years’ run-off cover issue is focusing attention. The acquiring firm’s PI insurers may have increasing influence whether the deal stacks up. The importance of risk profiling personal injury caseloads as part of the due diligence process, will lessen the risk of successor practice negligence issues and assist in protecting the acquirer’s risk profile post acquisition. For this season’s renewal, insurers may wish to look more closely at an acquirer’s book and understand more about the process of that acquisition.

The selling firm’s professional indemnity insurance is also under closer scrutiny. With un-rated insurers having the potential to go pop, the acquirer’s insurer is less likely to be supportive of a deal where the selling firm has an un-rated insurance paper. Firms thinking of strategic mergers, or those considering sale, may wish to look to alternative PII providers. The investment in a larger premium of a market leader may reap dividends. It is not surprising that underwriters are going to be far more interested in the ‘detail’ than ever before, and it is only set to increase over the next 12 months.

Zoe Holland, MD, Zebra legal Consulting

Q: Do one-stop-shops really help drive efficiencies and reduce costs or is this a myth and why?

A: A company tends to be split between fee earners,

organizers and management. For example, in our company roughly a third of our staff are engineers. Each engineer has a logistics coordinator who will organise and coordinate his work. The final third consist of management, IT, HR, accounts, etc.

If we wanted to become say double glazing installers we would only have to replace the first third of engineers with suitably trained and experienced glaziers; the remainder of staff would essentially remain unchanged. Providing a company is running efficiently and smartly, there is no reason why they cannot turn their hand to other, very different trades. Think Stobart, making the unusual voyage from haulage firm to barristers. In the legal experts witness world there are several different disciplines, some requiring more experience than others. If one starts at the top with highly trained and qualified experts, then in theory it should not be difficult for them to adapt to less skilled jobs. Let us take, as an example, a personal injury claim. The solicitor may require: an independent motor engineer to assess the vehicle damage; a photographer to provide images of an injury, and; an agent to deliver, explain and get their documents signed. The highest skill required in this example is the engineer, so there is no reason why he cannot be trained to take professional photographs of injuries (bearing in mind he is already practiced in taking professional images of vehicle damage), explain documents and have them signed. This ‘one-stop’ system is beneficial for us, the solicitor and the claimant. Our logistics costs are reduced (and our environmental impact), the solicitor is safe in the knowledge that all three services they require will be carried out efficiently. The claimant is only inconvenienced by one person instead of three thus providing a cleaner and better customer journey. On top of the efficiencies, the savings we make can be passed onto the solicitor.

We further add to that third of the company, in the form of providing specialists in certain areas beyond our expertise, such as interpreters, translators and surveillance. The client no longer needs to locate specialists in different disciplines or geographical areas because they know they can trust a one-stop expert shop. Nik Ellis, Managing Director, Laird Assessors


37The Opinions

Q: A recent study by the Legal Services Board that looks into why consumers use lawyers or not, found that no fee service agreements can make lawyers appear more open and honest, but that the ‘ambulance chaser’ tag still continues to tarnish the reputation of the claims arena. Who has or can forge the upper hand in the eyes of the consumer: lawyers, insurers and / or ABSs?

A: The research by Optimisa Research for the LSB,

‘Consumer use of Legal Services: Understanding consumers who don’t use, don’t choose or don’t trust legal services providers’ makes interesting reading. It found that only 42% of the population generally trust lawyers to tell the

truth, down from 47% in 2011. However satisfaction was generally high amongst those who had recently used legal services. So is the problem one of perception?

This does appear to be the case, at least within some sections of the population – there was a higher propensity amongst social classes C2DE to view lawyers as intimidating and inaccessible. Conversely the same social classes perceived ‘No Win, No Fee’ lawyers to be more approachable, more interested, engaged and honest. This is where ABSs can come in – often with ‘big brands’ behind them, they aren’t as tarnished as the traditional lawyers, with the reputation of being stuffy, money-grabbing and lacking in empathy.

Do insurers and their ABSs have the upper hand in reputational management to help them attract clients? I’m not sure the ‘ambulance chaser’ tag of legal service providers on the claimant side (CMCs, their ABSs and claimant lawyers) actually does any harm when it comes down to it. I think it is the tabloid view that prevails – the view that other people making injury claims generally exaggerate their claim to get a pay-out they don’t deserve (or worse still, make up their claims), but when they themselves get injured in an accident they of course deserve full compensation! At that point, they will use the organisation they feel will do the best job. That may be a CMC or their ABS, advertising their specialism in this area.

So yes, ABSs do have the upper-hand but I think that this advantage will be more keenly felt outside the injury arena. Consumers have become accustomed to using non-lawyers for services such as will writing and conveyancing transactions but it may be a while before they make significant inroads into the claims market at the expense of lawyers.

Alan Strange, LAMP Group Limited

Are you operating within the Law?

Do you utilise the services of a Private Investigator (PI)? Is a vehicle examiner a PI? Under proposed new legislation they may need to be licensed and YoU commit a CrIMInAL offence if they are not.

‘Public bodies spent nearly £4million on surveillance, background checks and intrusive investigations by PI’s’. Such media headlines have been a hot topic of late, phone hacking, vehicle tracking devices, arrests, government proposed licensing. So who are PIs? Answer: anyone who investigates. Vehicle examiners could fall under this definition by highlighting inconsistent collision damage.

There is no current governance of PIs however some organisations such as the Association of British Investigators (ABI) whose membership standards are such, they are endorsed by The Law Society, seek to enforce ethics. I’m a full member and consequently provide you with an ethical lawful service, Liability Insurance, proven business knowledge to mention a few.

What does this have to do with you? Well if you instruct someone to take a statement for you, conduct surveillance or investigate any element of a claim (possibly including verification of identity), they are likely to be classified an ‘investigator’. Under proposed legislation, you are criminally liable if they don’t hold a licence and/or breach English Law.

Why is this happening? The phone hacking scandal often refers to ‘rogue PIs’ but it wasn’t practising ‘PIs’ who accessed the phone voice-mails. This however brought spotlight on PIs and questionable tactics. Like many professions, some people provide service with limited knowledge or experience. Covert surveillance is governed by the Regulation of Investigatory Powers Act (RIPA) but that is not applicable to PIs. Consequently, the Fire Authority that used a tracking device on an employee’s car, recording her vehicle’s movements whilst she was on sick leave, was not breeching RIPA but does that make it justifiable?

Is iAi any better? Yes. I received three Home Office Annual Best Practise Management of Serious Crime Awards, involving covert surveillance during my 30 years police service. Other iAi staff have similar awards so we have proven experience.

Our investigators have skills, knowledge and experience that could benefit your business. If you utilise an unregulated, non-ABI member, be aware their future maybe limited and you could be the next media headline.

Peter Parry, Managing Director, Independent Accident Investigations

Q: How will changes to strict liability affect insurers and their customers?

38 The Opinions

A: Some health and safety regulations impose a ‘strict

duty’ upon employers, i.e. employers cannot mount a defence arguing they did everything ‘reasonably practicable’ to prevent an accident. For example the Provision and Use of Work Equipment Regulations require: ‘Every employer shall ensure

that work equipment is maintained in an efficient state, in efficient working order and in good repair.’

As a result, employers are currently liable to pay compensation when employees are injured by defective equipment, even when the employer has taken all reasonable steps to ensure the equipment is safe. The Government view was that this strict liability was not fair or reasonable. It issued a proposal in the Enterprise and Regulatory Reform Bill to remove civil liability for breach of health and safety regulations. This has now been approved by the House of Lords, though the Bill still requires Royal Assent.

What does this mean for insurers and their customers? Unfortunately employers and their insurers are unlikely to see the end of claims based around failures to comply with health and safety regulations. However, it

certainly appears that in future it will be more difficult for compensation claims to succeed.

Continuing with the above defective equipment example - rather than simply establishing the equipment was defective and a cause of their injury - a claimant may now have to prove his or her employer was also negligent. To do this they will likely seek to rely on the evidence of an engineering expert, who will review the employer’s inspection and maintenance records for the equipment, then provide comments regarding how often the equipment should have been inspected. For instance, if it was properly maintained and whether or not the failure to maintain was a cause of the ultimate defect causing injury. Defendants who are unable to locate these records will struggle to prove they operate a suitable inspection and maintenance regime. This leaves the door open for the claimant to allege there was no such regime and this in turn was negligent of the employer.

Therefore, while the changes undoubtedly make things more difficult for claimants, we will continue to see claims arising out of the former strict liability scenarios and the onus will remain on defendants to provide documentation to evidence their procedures.

Alistair Schuberth is a Risk Management Consultant within Willis UK Retail’s Claims Defensibility Team www.willis.com

39-62

THE fEaTurES

39The Features

MC // ???? 2013

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THE CMC rESPONSEAlan nesbit, Managing Partner, nesbit Law Group & Founder of ArC

I t is clear The Law Society’s campaign against insurers’

claims role in the personal injury market has made headlines and is seen as controversial by many. However, as an advertising campaign is designed to make as many headlines as possible, it’s one that has certainly achieved its purpose. As they say, any publicity is good publicity...

From a CMC perspective, the campaign is for the most part helpful. Unless the Government changes the regulatory landscape by raising the Small Claims Limit (which is perhaps less likely in the aftermath of the Transport Select Committee report) CMCs still need to pass cases to firms of solicitors in order for them to service their clients’ cases. Although there was an expectation the referral fee ban would bring an end to CMCs across the board, this has simply not happened. However it’s clear a significant number of CMCs have come out of the industry with the good ones staying in. There are of course a number of models available to ensure they can continue to receive income from claims referrals without breaching LASPO, whether that be (amongst other methodologies) as part of an ABS or through recommendations.

Maintaining relationsCMCs must maintain their relationships with law firms to ensure that their clients get the right service. The Law Society campaign helps show that going to an independent law firm remains the most appropriate route to ensure a client receives appropriate compensation. It’s clearly

SCarED Off Or SPOT ON?the recent ‘Don’t get mugged by an insurer, use a solicitor’ campaign launched

by the Law Society has certainly turned heads. Modern Claims asked Alan nesbit, nesbit Law; Donna Scully, Carpenters and David Williams, AXA Insurance, their

thoughts on the ‘love it or hate it’ campaign.

“If there is any criticism of the campaign it is in the use of the word ‘mugged’... for those people who have been the victim of what is an horrendous personal and physical attack, it is an unnecessary and inappropriate

cheapening of what they have been through.” alan nesbit

an unspoken message that insurers’ best interests are aligned to those of their shareholders; so they will, by necessity, attempt to ‘get away with’ as low an award of compensation as they can.

If there is any criticism of the campaign it is in the use of the word ‘mugged’. Although deliberately used as an evocative word, for those people who have been the victim of what is a horrendous personal and physical attack, it is an unnecessary and inappropriate cheapening of what they have been through. In a society that through various media campaigns sees personal injury solicitors and CMCs as amongst the lowest ranking members of that society, a different image or model could certainly have been used. The Law Society holds itself out as the shining light for how the profession should model itself and by using the ‘mugging’ theme, there is a distinct possibility that this further darkens the shadows on the poor image held by the personal injury sector.

THE CLaiMaNT LaWyEr rESPONSEDonna Scully, Partner, Carpenters & Immediate Past President of MASS

I was very surprised by the campaign for two reasons.

Firstly, The Law Society had decided, so late in the day, to launch a campaign at all but secondly, the tone and wording of the campaign. It is very hard hitting and out of character for The Law Society generally. The word ‘mugged’ really jumped out at me and I did wonder who had advised them on the campaign

and whether it was professional.

I can see where The Law Society is coming from and I have campaigned both as a PI lawyer and Chair of MASS to highlight the potential problems with ‘third party capture’. I have also always been at a loss to know how third party capture is not in breach of the Data Protection Act.

Is anybody listening?So, in principle, I should be in favour of the campaign but I

MC // ???? 2013

Features 41

am not. I am not interested in mud- slinging and I certainly don’t want to stoop to some of the tactics used in press releases and media coverage by the ABI. I often wonder where it gets its statistic from and how these can be used so easily to fit the purpose of their campaigns; not to mention how old the figures actually are. I do, however, find it utterly ironic that the ABI is ‘up in arms’ about the campaign and have, I believe, reported The Law Society to the ASA. All I have to say on that is ‘pot and kettle’, enough said.

I do understand why a lot of claimant firms are supporting the campaign and respect their position. I have always felt that we achieve more by being grown up about things and trying to sort problems out collaboratively. I run my firm that way and it was the way I ran MASS during my chairmanship. Some might say ‘the gloves are off now’ and the time for talking has passed because nobody is listening and they may be right. However, I stick with my view that we must stay professional and do things properly even if we feel those around us are not. The hope is that we can demonstrate that what we propose is not in ‘our’ interest but actually in the interests of justice.

THE iNSurEr rESPONSEDavid Williams, Managing Director, Underwriting at AXA Insurance

Yes I was annoyed when I saw The Law Society adverts

but in all honesty I was more disappointed. Regardless of all the banter and posturing that goes on between the claimant lobby and insurers, most of the ‘bad behaviour’ came from the peripheral claims farming community. I still harboured the belief that UK solicitors were generally a professional set of

people with decent standards. All that disappeared when those adverts went live; they immediately descended in to the gutter, with behaviour more like some of their American counterparts - and we all know in how low regard they are held.

Worst still was to follow when I found out the figures it used to try and give credibility were flawed at best, being a

‘sample’ of just over 100 claims from three insurers. Contrast that with the Frontier Economics Work data which looked at over 100,000 claims!

Now I know the Frontier Economics work is a few years old now, but it showed that when a claimant dealt direct with an insurer, they got, on average, a higher payment and they got it 90 days quicker. This rang true with me. When dealing direct there is none of the attritional arguments causing delay (and justifying higher fees in the past). As insurers are paranoid about claims being reopened later if under settled, a slightly more generous approach (to treat the customer/third party fairly and to save on later fees) made sense.

Bursting the bubble.Contrast that with The Law Society claims, does anybody really believe that, other than in a few exceptional circumstances, there is a difference in settlement values of the huge multiples the Society is talking about? I don’t think there is. Anyone who says they believe that’s the real situation is either deluded or deliberately trotting out a line simply to try and make insurers look bad.

I know times are difficult for some law firms. Yes some will close but if you look at the unbelievable growth over the last 10 years, the bubble was always going to burst at some point. The adverts smack of desperation. They probably don’t help the reputation of insurers but from the comments I have seen they are equally damaging to the legal profession. Certainly the threat of fewer roles for solicitors doesn’t excuse this shocking behaviour and I am not surprised the Advertising Standards Authority is now investigating, albeit after the campaign has run its damaging course!

SO, WaS iT WOrTH iT?Charlotte Parkinson, Modern Claims

Clearly the campaign has been impactful and raised the profile of The Law Society, yet the fact it has left both

solicitors and insurers in a state of confusion and shock raises questions about whether launching such a hard-hitting campaign (when the industry is already in a delicate state of flux) was the right move. The decision on whether or not it was in line with advertising standards currently lies with the ASA but overwhelming opinion across the board seems to be that perhaps this campaign was one step too far.

“In principle, I should be in favour of the campaign but I am not. I am not interested in ‘mud- slinging’ and I certainly don’t want to stoop to some of the tactics

used in press releases and media coverage by the ABI.” donna scully

“I still harboured the belief that UK solicitors were generally a professional set of people with decent

standards. All that disappeared when those adverts went live; they immediately descended in to the gutter.”

david Williams


42 Features

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Q the Association of British Insurers (ABI) estimates that

undetected general insurance claims fraud totals £1.9bn a year, with £350m of this attributable to the motor insurance sector – how can utilising intelligent telematics help reduce fraudulent claims?

a SH: Telematics allows insurers to identify suspicious claims

at the earliest opportunity and so target investigations appropriately. Telematics data can assist with hotspot analysis based on vehicle and accident location. This can be correlated with existing hotspot trends and information and also identify new potential hotspots. Pooling that information can identify fraud risk and allow the most effective deployment of resource. Educating and creating greater knowledge of how the information can/is being used by insurers can act as an effective deterrent. Telematics can also provide an opportunity for the insurers to look at who is at fault for the incident, which will assist in cases where allegations suggested the incident has been induced.SC: The crucial aspect as with any investigation into a fraudulent claim is evidence base. So if telematics devices provide us with evidence that contradicts the circumstances described to us, then clearly that is going to be a valuable tool. I think the whole market in terms of telematics

and investigations is yet to mature so it will inevitably play a part as manufacturers and insurers introduce more devices as part of their policies and processes. However, at the moment, it is still quite an immature market.

Q Last year, Andrew Smith, Managing Director at Cobra

UK, said: “the use of telematics by insurance companies is growing rapidly as this innovative technology delivers proven, scalable and highly efficient ways for insurers to reduce risk, based on actual driver behaviour.” How effective has the implementation of black box technology been so far and is there still a long way to go?

a SH: For insurers who have adopted telematics, the systems

are working well around the pricing of the products for customers. Due to the limited number of initiatives around telematics - in terms of insurers investing in these products - there is still a long way to go. The ideal would be that all vehicles involved were fitted with telematics so that all data can be analysed. The investment from the industry for this to happen would be colossal and is unlikely to happen quickly.SC: There is a long way to go here – there are a number of fleet organisations and insurers still trying to establish and maximise the use of telematics but at

the moment we are not in a place where we can comment definitively on how successful aspects have been.

Q A 2011 survey conducted by Legal & General suggested that 18-24

year olds are most likely to commit household fraud by exaggerating a claim in order to attain a gadget upgrade. What can be done to tackle this increasingly prevalent issue, which has been nicknamed ‘gadget-lust’?

“We have specific teams who are responsible for investigating low value household claims;

investigation is simply not something we would outsource.” scott Clayton


44 Features

BuGS iN THE SySTEM

It is no secret that fraud of all types is on the rise and that changing social factors have influenced this. one of the most prevalent types of fraud that is emerging is gadget and telematics fraud. Charlotte Parkinson spoke to Sarah Hill (SH), Partner at Berrymans Lace Mawer and Scott Clayton (SC), Claims Fraud and Investigations

Manager at Zurich, to get their views on the changing world of fraud.

Sarah Hill, Berrymans Lace MawerSarah is the strategic and operational partner responsible for the specialist fraud team in the Birmingham office at Berrymans Lace Mawer. Her areas of specific expertise include all aspects of motor fraud, including bogus passenger claims, staged/contrived accidents, semi-staged accidents, high-value exaggerated fraud cases, policyholder frauds and low-velocity claims. She frequently co-ordinates police complaints under the Association of Chief Police Officers guidelines for proven insurance frauds as well as liaising with the SRA Fraud Intelligence Unit and the Serious Organised Crime Agency. Sarah also advises on current regulatory legislature which assists in the combating of fraud.

a SC: It’s useful to have statistics and demographics so we can tell

geographically where most insurance claims are likely to come from. The risk with that, however, is that by focusing on one particular area more than others, you lose the opportunity to have a broad approach to these types of claims, irrespective of age group. When it comes to gadgets and electronic devices such as laptops and televisions we have always had a process in place where any suspicious characteristics in claims are investigated in house. SH: Withdrawal of ‘loss’ cover: refusing a new for old replacement and only replacing with the same model, or its nearest equivalent of the same or similar value; greater scrutiny of claims in the period before and shortly after the release of a new model; imposing a higher evidential threshold to validate a claim and requiring more from a policy holder before paying out. Utilising, higher compulsory excesses in addition to the above steps will assist in deterring these claims.

Q With gadget fraud on the rise, two types of fraudsters have emerged:

the organised criminal who makes multiple claims on high-end handsets and the casual opportunist who wrongly believes that making a claim will get them cash or a free upgrade. What is the industry doing to tackle either one or both of these issues?

a SH: The industry has always been keen to tackle fraud regardless of

the size of the claims pursued. Steps are taken to investigate all claims where concerns of fraud are raised and where the evidence is sufficient, appropriate action is taken. One area the industry could improve on is publicising the action that is taken and the way both these claims and the individuals who make them are dealt with. SC: We don’t make a distinction between organised criminals and opportunists; fraud is fraud. We have techniques to identify both and it is all about looking at the characteristics

of a claim, finding the discrepancy or suspicious aspects and making sure it follows the correct investigation channel; the more that we invest in terms of the investigation side then the more fraud that we will uncover.

Q How are firms tackling the rising cost of handling gadget

fraud, given the relatively low value of many items and the costs that would be incurred to implement a criminal prosecution?

a SC: Our model is to in-source all of these investigations. We have

specific teams who are responsible for investigating low value household claims; investigation is simply not something we would outsource. By doing that, the focus is very much on these types of claims - with the end game being that if it is fraud and is proven to be then we will always look to prosecute these individuals. We aim to have an all encompassing approach to fraud – whether it is a claim worth £400 or £400,000, the sanctions in place should be exactly the same. SH: Given the increase in gadget fraud, while the individual cost is small, the cumulative effect of the claims is too big to ignore. Greater detailed investigation and technical review at the beginning of the claim is productive to lowering costs of the overall investigations. In terms of criminal prosecution, a one-off incident of gadget fraud may not be cost effective to pursue but a collection of such incidents will be.

Q Is it the responsibility of the insurer or the legal professional to

reduce claims fraud? Do both have an equal part to play?

a SC: Everybody who handles claims and sells policies has an

obligation to make sure controls are in place to identify and investigate fraud. Legal professionals who act on behalf of insurers are often our ‘eyes and ears’ and they have to be fully engaged and aware of the fraud risks. An all encompassing approach is

necessary. Everyone has a part to play; the brokers, loss adjusters, suppliers and most importantly the claims personnel. SH: Insurers and the legal profession must continue to share this obligation. Insurers have a responsibility to look after their customers, to ensure that they are giving value for money and that premiums are set appropriately. They must also retain a commercial edge and fraudulent claims have a significant impact on this financial equation. Insurers are doing all that they can to balance this and reducing claims fraud is a major part of that process. Whilst at all times ensuring that it represents its clients’ interests, the legal profession must uphold its duties to the court and act in good faith. Working to reduce claims fraud and its impact on both court resource and upon society is fundamental to that duty.

“one area the industry could improve on is publicising the action that is taken and the way both these claims and the individuals

who make them are dealt with.” sarah Hill

Features 45

Scott Clayton, ZurichDuring his 26 years with Zurich, Scott has handled claims across all lines of business and all distribution channels. In his current role, Scott is responsible for managing the identification and investigation of all suspect claims across the General Business in the UK. He oversees Zurich’s 80-strong team of fraud handlers and investigators and is a Technical Board member of the Insurance Fraud Bureau.


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Does telematics really reduce the cost of FnoL and identify fraudulent claims?

This is a question being asked by insurers nearly every day.

The necessity to control claims costs and reduce fraud has pushed the insurgence of black-box telematics insurance products - often without understanding the real benefits that such technologies can bring. This, in part, is due to poor services offered by some suppliers of such black-boxes. It’s also due to poor insurers’ lack of understanding outside of their comfort zone of modeling historic and quantified data.

The current trend of young driver telematics isn’t really using the technology to its best advantage, rather capitalising on the high premium and risk ratio to push non-cost effective monitoring tools. Some see this as being the in-roads to a wider insurance product while looking at it pragmatically; that this could be the death toll of an exciting technology by poorly implemented, penalty driven services that still fail to deliver basic cost control.

Extending value.New technology requires new thinking; this has always been true whenever a new technology is brought to the forefront. Telematics is not new but its application has only now become cost effective and manageable - thus presenting itself as a new technology. The plethora of information that can now be made available becomes daunting; from real-time, live driver metrics to crash data and notification. But, who is really set up to accept and understand

this data, let alone manage and implement to a true cost benefit?

Lysanda is spending considerable time analysing and understanding the challenges that modern insurers face, breaking these down into smaller, more manageable modules and blocks of services. This allows telematics technology to break away from the current high premium groups, into a much wider implemented and valuable product range, for both insurer and the insured.

the real earner.FNOL and controlling claim cost is a no brainer. This is where telematics and black-box technology can really have an impact, without being a new drain on existing insurer services. This is also where the insured can gain real benefit, having peace of mind and assurance of support if they were to be involved in an incident.

Alerting an insurer or insurer-managed third party FNOL centre with the details of location, severity and policy holder’s details when an incident

immediately occurs, can quickly help trained incident managers to isolate and control an incident. Better control will inevitably result in better management of costs. With recovery, through to hire cars, legal costs, repair and potential third party loses, all under the insurer’s control; this will allow them to re-act faster, further reducing costs.

Controlling and managing these costs quickly and efficiently, not only provides a tangible ‘pounds-in-pocket’ benefit, but will also result in a more professional and efficient service for the end insured. The professional, caring service value is more difficult to quantify and understand but could be the make or break of retaining customers in a competitive market.

Painting a picture of reality.This brings us onto fraud, and fraudulent claims. Understanding the nature of drivers, vehicles and the consequence of accidents helps master the challenge of understanding the difference between fraudulent claims and genuine accidents. This is a complex science and cannot be the sole responsibility of a black-box in the vehicle. It’s a tool like any other and provides all the analytical information and capability to quickly understand and make an early judgment. This allows for the quick identification of easily isolated fraudulent claims and passes the more subtle concerns to the insurer immediately, for further investigation to be applied where necessary.

The answer has to be, ‘yes, telematics can have a considerable impact in helping reduce the cost of FNOL and identifying fraudulent claims’ - however, not solely in isolation, but as part of an adopted service that becomes part of day-to-day business. Telematics black-boxes are not a dark art but a tool of accuracy and independency. When used correctly, they are a powerful and cost effect asset in managing, controlling and reducing the real costs of accidents.

John Keates is the Chief Technology Officer at Lysanda Ltd

a Dark arT?Insurers aren’t using telematics as extensively as their developers had hoped.

As John Keates explains, accuracy and combating fraud isn’t black magic, just an effectively used black box.

“the current trend of young driver telematics isn’t really using the technology to its best advantage, rather

capitalising on the high premium and risk ratio to push non-cost effect monitoring tools.”

Features 47


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Big enough to cope small enough to care

Weather patterns are undoubtedly more volatile these days leading to an

increase in intense events. Over the last 20 years the frequency of natural global catastrophes has doubled and there is a rise in non-natural disasters too. It is surely only a matter of time before the UK once again gets hit.

The memory of the 2007 mid-year washout is still fresh in the mind. We need little reminder of the perils of flooding when our neighbours in Central Europe experienced the overflowing of several great continental rivers during May and June. In a year during which the Government and the insurance industry reached an historic agreement with the creation of Flood Re, I am often asked, if 2007 and perils like it were ever to be repeated, how would the insurance industry cope today?

response pride.The 2007 floods were characterised by a strong media focus and market response on domestic claimants but over 100,000 businesses were also affected. The cost to the insurance market was £3 billion1. For Crawford’s part, we were managing claims with a total reserve of just under £600m. Our adjusters dealt with 23, 000 claims; 97% of which received a visit within two weeks of our receiving an instruction. As an industry, we should be very proud of how we respond to and resolve claims, particularly during surge events.

However, we would be naive to think significant challenges do not exist; the claims process can break down when there is a high volume of claims. Equally, on the claims management side; as a sector, the adjusting market has sometimes promised its insurer partners more than it was able to deliver come the day and took a credibility hit it is now recovering from.

The result of this is a relationship between insurers and claims managers that is not always as effective as it could be. The market should be aware that the FSCA is starting to think along the same lines. Additionally when it

comes to managing surge events we need only look to Superstorm Sandy to see how political intervention can make our lives even more difficult at the very time its least welcomed. So, I believe it’s up to us to do something about this rather than wait for new rules to be imposed upon us.

Pre-nomination and the global perspective.Worldwide, the insurance industry is emerging from 36 months of natural catastrophes which could shape its approach for years to come. Similarly, here in the UK, we took this global learning and reviewed our approach to help define new benchmarks in communication (between our own supply chain of repairers and insurers etc.): revise management information (establishing key performance

indicators); first notification of loss and appointment setting; alternative accommodation and a variety of other essential measures. We have particularly focused on getting commercial customers up and running quickly as, in our experience, there is a tendency for these to be de-prioritised as domestic customers’ needs are generally better catered for.

ready to weather the storm.Only with a mutual recognition of the complexities of surge claims handling can we be sure of our preparedness for a 2007 re-run. Right now I’d suggest we need to work harder together across the UK insurance industry to ensure the market is well placed to respond quickly and efficiently. This will be a challenge. There is little historical evidence of the market coming together on property claims issues in the way it has done to tackle key challenges in the motor sector.

First we have to create the right transparent, partnership relationships. As claims experts, we need to better explain the value we bring to the claims process and ask that insurers place claims higher up the executive agenda. This allows in-house and external claims managers to deliver a consistently high quality service when it really matters. Both parties need to be clearer what it is they want out of the relationship and what can realistically be delivered. Then they can work together at filling any gaps that remain.

Amidst the bustle of everyday business, there is no real debate taking place about how we arrive at this new relationship, nor a joined up industry surge response. It is possible to change the way we work together and, more importantly, it is necessary. If we don’t start making some inroads soon, it won’t be long before the regulator comes up with some ideas of its own.

Greg Gladwell is Chief Executive Officer, UK & Ireland at Crawford & Company

1. Source: Association of British Insurers

riGHT PLayErS, WrONG fOrMaTiON?After two of the coldest winters on record, UK insurers breathe a sigh of relief as

seasons pass with relatively benign conditions. Greg Gladwell explains why.

“as claims experts, we need to better explain the value we bring

to the claims process and ask that insurers place claims higher

up the executive agenda. this allows in-house and external claims managers to deliver a

consistently high quality service when it really matters.”


Features 49

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LEGaL OPiNiONModern Claims asked some of its lawyer columnists to address some of the concerns for claimants post-LASPo, personal injury lawyers across the piece and, finally, their insurer

clients. Alan nesbit & Karl Fischer give their view on claimants’ reaction to sharing damages with their solicitor; Donna Scully looks at collaboration across the industry;

Sarah Hill highlights the rise of ghost brokering and Michael Davidson suggests that the rise of Joint Venture ABSs is helping to create a ‘battle of the brand’ landscape for 2014.

A: Prior to the Jackson reforms, the practice of

offering cash advances, iPads, Kindles, etc. to encourage claimants to ‘choose your firm’ was rife. It was not unusual for claimants to ‘shop around’ to secure the best incentive but what they did not investigate is whether the firm they chose was the best firm to ensure that their claim was in the best of hands.

Perhaps a little short-sighted, when some firms may be pressuring claimants to accept pre-medical offers or settle on the basis of the initial medical report when they are still symptomatic. The initial incentive perhaps detracts from the bigger picture of securing them the right amount of compensation they deserve, to ensure they are fully compensated for their injury.

I for one am pleased that the inducements are withering

away and that we can focus on our job without having to enter into a bidding war with claimants who are shopping around. Hopefully this will also sift out the spurious claims.

I am pleasantly surprised by how claimants have reacted knowing that they will be faced with a deduction from their damages of 25%. I can count on one hand the number of potential claimants who have not agreed to the deduction.

In what other field do you get something for nothing? The fact that the claimant is to pay for their legal costs will, I think, build a stronger relationship between solicitor/client. Prior to the reforms, your client may have been wary that you were telling them it would not cost them anything to bring a claim.

Prior to CFA’s and ATE’s being introduced, claimants were on contingency fees. We have done a full circle. Wolf Law Solicitors are litigators. We will ensure their clients get the compensation they deserve.

Karl Fischer, Managing Director, Wolf Law Solicitors

LaSPO: THE CLaiMaNTS’ rEaCTiONQ: How have clients reacted since 1st April, to the news that they may have to share the damages pot to fuel the cost of litigation?

“In what other field do you get something for nothing? The fact that the claimant is to pay for their legal costs will, I think, build a stronger relationship between solicitor/client. Prior to the reforms, your client may have

been wary that you were telling them it would not cost them anything to bring a claim.”


51Features

The questions Modern Claims put to the panel:Q: How have clients reacted since 1st April, to the news that they may have to share the damages pot

to fuel the cost of litigation?Q: Are you concerned or optimistic about the number of joint venture / insurer-led or backed ABSs

venturing into the claims market? How will this affect your business and clients?Q: Is the sector showing greater signs of collaboration in terms of settling motor claims? What might

be being lost / gained here?Q: Is ghost brokering an issue for your organisation? Is this a prevalent issue for the sector or are

there other areas of ‘new’ fraud that need to be targeted in the claims arena?

We provide ATE cover without the circus. With our Personal Injury policy, your client will know exactly where they stand from day one with clear, fi xed premiums. And, with comprehensive cover for motor and non-motor personal injury claims, full protection for disbursements and potential adverse costs plus delegated authority available there are many reasons to choose us as your ATE insurance provider.

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JUMPING THROUGH HOOPSFOR YOUR PI CLAIMS?

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JOiNT vENTurES: BOTHErED?Q: Are you concerned or optimistic about the number of joint venture / insurer-led or backed ABSs venturing into the claims market? How will this affect your business and clients?

A: Despite all the recent market momentum regards

ABS arrangements and joint ventures at this stage, it is too early to determine if genuine value creation has been established. The claims market has always been and always will be a playground for those who can deal with high volume and low margin, now more so than ever, with the

added pressures on costs. Therefore, diversification for the majority of traditional practice will be key for survival.

ABS or JV operations who offer greater customer choice is a positive outcome. However, if their engagement and distribution strategy is customer centric, as I discussed at the recent national affinity event, it will no longer be those which have distribution who are king; it will be those which interact and engage will win.

Any strategic partnerships - whether a JV or ABS - must always be about value creation for all parties and provide genuine customer benefits. Otherwise they risk serious brand damage and diminishing customer loyalty. There are some prime recent disasters where the legal brand was not managed appropriately leading to the market share to be greatly devalued – a situation to be avoided at all costs.

New markets and new partnerships are a great time for innovation and when two brands combine to create real solutions for genuine problems, there is nothing better. I see 2014 being, without doubt, the battle of the brands; each one going head to head, toe to toe, to satisfy their ambitions and thirst for market share.

Strategic contacts and relationships have never been so important, as is the ability to work across market verticals. Survival in the ABS age for traditional practice will fundamentally come down to: a) strategic advantage; b) appetite for change, and; c) operational capability. Whichever path you take, ensure the customer is at the heart of design. Innovative solutions to real problems will dictate your share of the £8bn pa market.

In conclusion; concerned? Personally, no!

Michael Davidson, Head Strategy & Sales, Goldsmith Williams Solicitors

LaSPO: THE CLaiMaNTS’ rEaCTiONQ: How have clients reacted since 1st April, to the news that they may have to share the damages pot to fuel the cost of litigation?

A: It will come as no surprise to most in the industry

that there has been very little reaction from claimants on the issue of sharing their damages with the law firm dealing with their case. One of the most difficult elements of the pre-April CFA was the fact that many clients expressed concern that there must be a catch; how could they end up not paying

any money for an effectively delivered service. If anything, clients - particularly those over a certain age - seem far more prepared to understand paying for a service. In the days of Legal Aid for personal injury claims, those clients with income over a particular bracket had to contribute to costs during the life of the claim. So it is not such a long time ago that people, in effect, speculated on their own prospects of success.

In truth, any potential difficulty with the share of damages is still some time away. Many of the claimants who have signed up to agreements are still some way from receiving any compensation, particularly those who are suffering severe symptoms from higher value cases. It will certainly be interesting to see the level of complaints that arise when those claimants receive a significant deduction from a high value case. It is one thing to lose 25% of an average settlement for a neck or back injury caused in an RTA. It is entirely different for someone who has had multiple injuries and time off work and considerable care to lose 25% of, let’s say a £50,000 claim.

It strikes me that the same kind of Anne Robinson/Watchdog led programs, complaining about the amounts deducted by Claims Direct and The Accident Group, could well be on the cards. It will then come down to how well the individual law firms have explained the consequences of the agreements their clients have signed up to. I am sure that LeO will have to deal with the fallout when it arrives.

Alan Nesbit Managing Partner Nesbit Law Group LLP

“In truth, any potential difficulty with the share of damages is still some time away. Many of the claimants who have signed up to agreements are still some way from receiving any compensation,

particularly those who are suffering severe symptoms from higher value cases.”

“New markets and new partnerships are a great time for innovation and when two brands combine to create real

solutions for genuine problems, there is nothing better. I see 2014 being, without doubt, the battle of the brands; each

one going head to head, toe to toe, to satisfy their ambitions and thirst for market share.”


Features52

SECTOr rELaTiONSQ: Is the sector showing greater signs of collaboration in terms of settling motor claims? What might be being lost / gained here?

A: I think it is too early to say whether there are

real signs of more co-operation and willingness to settle claims post LASPO, although I hope so. If cases are straight-forward then they should be sorted in the Portal in the interest of the injured party. I have always wanted to see more cases dealt with in the Portal, particularly in Stage 2 and have been frustrated when cases in my

own firm fall out due to no response to CNF. At Carpenters we tend to give insurers as much help/

time as possible to keep cases in the Portal because - in a lot of cases - exiting the Portal is unnecessary, time-consuming and more expensive. It does not, in my view, benefit anybody involved in the process. That said, looking at Portal stats (even before LASPO), it is frustrating that almost half of cases being presented in the portal exit, when a big majority of those should stay in. I would like to see that change and for the Portal to be used more

efficiently on the cases that are suitable for it. I am concerned that Fixed Recoverable Costs (FRCs) have

been so drastically reduced on two levels. Firstly, with the difference between Portal costs and FRCs being so close, will the incentive disappear for insurers to keep and settle cases in the Portal? I hope not. We shall have to wait and see.

Secondly, with FRCs being so low, will it mean claimant lawyers will have to litigate more to be able to sort the ‘technical’ cases? I refer to those cases with a complication such as a liability dispute, allegations of fraud, low velocity cases or some other complication. I suspect we will see more litigation because of this. Again, this is not what either side wants and appears to me to be an ‘unintended consequence’ of rushing these reforms and not getting them right. Was it really a good idea to slash FRCs in the way they did? I cannot see the logic and certainly, if it increases litigation or reduces the number of cases settling in the Portal, it will not have the desired effect at all.

The bottom line though is that I do hope to see greater collaboration between all parties in the claims process, not just in settling motor claims but in tackling fraud too.

Donna Scully, Partner, Carpenters

CyBEr riSkS fOr iNSurErSQ: Is ghost brokering an issue for your organisation? Is this a prevalent issue for the sector or are there other areas of ‘new’ fraud that need to be targeted in the claims arena?

A: Ghost broking is not a new phenomenon but it is a

continuous and growing problem for the insurance industry. Recent insurance focused media attention has cast the spotlight back on the activities of illegal insurance intermediaries, highlighting that this is by no means a receding risk.

Significant strides forward have been made in recent years in efforts by the industry to stamp out ghost broking, culminating in a number of investigations and convictions secured by the Insurance Fraud Enforcement Department. A recent example is a commitment by a leading classified advertising website to remove the ability to allow insurance products to be advertised under its insurance category.

With the marketplace for insurance sales increasingly online focused and with the ever-growing sophistication of information and communications technology, ghost broking remains one of the most relevant and concerning of the increasing number of cyber risks facing the industry.

The internet, classified advertising websites and social media provides almost unrestricted and perhaps more significantly, all but unregulated access to instant, direct marketing channels. They also serve up one of the biggest captive audiences for fraudsters to seek to exploit; Facebook alone has 34 million users in the UK and e-bay has over 14 million active UK based users – to name but two.

The prevalence of mobile phones and similar wireless electronic devices allows continuous access to a wide range of identity data and financial information. The extraction and manipulation of this type of information for the purposes of ghost broking and wider identity theft, as a means to commit insurance fraud, is nothing new. The scale of the opportunity that the internet now presents however should be viewed with some trepidation.

The effect of ghost broking continues to damage not only brand reputation (for example a particular organisation might be targeted and the ghost broker attempts to place their fake business with that organisation), but the image and reputation of insurance brokers and the insurance industry as a whole. This erodes trust and confidence – the cost of which is immeasurable. If it is not already, for the foreseeable future digital fraud in its many guises should be part of the mainstay of fraud risk management. As the technology used by consumers and fraudsters gets smarter, new fraud scams and risks will emerge.

Sarah Hill, Joint-Head of Fraud, Berrymans Lace Mawer LLP

“I am concerned that Fixed Recoverable Costs (FRCs) have been so drastically reduced on two levels. Firstly, with the

difference between Portal costs and FRCs being so close, will the incentive disappear for insurers to keep and settle cases in the Portal? I hope not. We shall have to wait and see.”

“With the marketplace for insurance sales increasingly online focused and with the ever-growing sophistication of

information and communications technology, ghost broking remains one of the most relevant and concerning of the

increasing number of cyber risks facing the industry.”


53Features

ClinicalNegligence Service

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Did you know…?Doctors Chambers was founded to supply medical negligence reports and has been successfully providing this service for over 20 years. Our experience and unrivalled expertise coupled with the knowledge of our in house doctors will ensure all your cases are dealt with professionally and efficiently.

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It was the then House of Lords in Majrowski v Guys and St. Thomas’ NHS Trust (2006) 3 WLR 125 which found

that an employer could be vicariously liable for this form of statutory wrong under S.3 of the 1997 Protection from Harassment Act. I should emphasise at the outset that a victim is at liberty to sue whatever the connection between them, if any, and the defendant. The claim is not confined to an employment relationship.

Things to appreciate about this novel jurisdiction include: the Act dictates a six year limitation period; compensation for anxiety and loss is recoverable absent identifiable stress related personal injury; harassment might be due to any reason so the protection is all-embracing; the claim is one for the Courts where costs are recoverable.

Definitions.The Act does not define harassment but in Thomas v News Group Newspapers (2001) EWCA Civ. 1233, the Court of Appeal identified four ingredients. There must be conduct:1. occurring on at least two

occasions;2. targeted at the claimant;3. calculated in an objective sense to

cause distress;4. which is objectively judged to be

oppressive and unreasonable.

Conn v Sunderland City Council C.A. (2008) IRLR 324. This is a classic example of a Court taking against a category of claim and doing all it can to demolish it. The intemperate language of Ward L.J. says it all. A civil claim can only succeed if the conduct involved is so bad as to be criminal in nature.

What, not why.In Green v Deutsche Bank (2006) EWHC

1898, the victim of prolonged bullying in the workplace recovered over £800,000 in damages. It established liability under the Harassment Act. The BBC is, as I write, under siege with so many complaints about staff harassment that it commissioned Dinah Rose QC to co-author a review. If - and I emphasise if - claims are substantiated then the 1997 Act provides a clear remedy. Note that unlike mainstream employment law - where remedies are available to those who suffer on account of a protected characteristic such as age, sex or disability - there is no such constraint under the 1997 Act. It is the harassment that is the key to the claim and not the reason for it. There might be no reason at all to explain it.

Case of the year.So, onto my case of the year so far which is fascinating and significant on several fronts. Roberts v Bank of Scotland PLC (2013) EWCA Civ 882, is in ‘you couldn’t make it up’ territory. The lead judgment was delivered by Lord Justice Jackson. The claimant, who represented herself, had been a customer of the Halifax. On certain occasions she had, by a modest margin, exceeded the limit on her account or credit card. The bank contacted the claimant by telephone

about these matters. ‘There is nothing objectionable in taking that course’ (para.12), the problem was that the poor woman was bombarded with calls; 547 over one year, with the bulk during a six-month period.

At first instance the defendant was found liable for harassment and the claimant was awarded £7,500 by HHJ Shaun Spencer QC. The defendant unsuccessfully appealed both liability and quantum. Sir Rupert agreed with the Trial Judge that the calls were intimidatory and usefully observed at para. 48 that: ‘It is no defence to intimidation that the culprit couched the intimidatory words in polite language...’ In a forthright blast he went on to say at para. 57, that if lenders persist in telephoning customers as here then: ‘banks had better build into their costings the damages which they will be called upon to pay to those customers’. The court agreed that the quantum award of £7500 was beyond reproach.

Basket of claims.The 1997 Act at section 3 (2) empowers the Court to make an award for anxiety and financial loss resulting. It is crucial to note that injury is not a necessity. Mere anxiety will found a claim and the value is to be ascertained by applying the VENTO guidelines (2002) EWCA Civ 1871 as uprated in Da‘Bell v NSPCC (2010) IRLR 19. Incidentally, those morons who suggest that Lord Justice Jackson is biased against claimants should read this decision and indeed his dissenting opinion in the recent injury case of Nicholls V Ladbrokes.

I venture to suggest there must be many potential claimants out there. Some banks and other financial institutions panicked and acted aggressively when the financial world imploded less than six years ago. Subject to decent evidence of distress coupled with a disproportionate, hectoring approach, there may well be valid claims which are still in time. Do not delay.

Professor Dominic Regan, Legal Commentator, Trainer and Costs Expert. www.profdominicregan.blogspot.com

HaraSSMENT rETurNS the recent, fascinating decision of a powerfully constituted and unanimous

Appeal Court in roberts V Bank of Scotland has resurrected an intriguing cause of action; harassment claims. Professor Dominic regan reports.

“i venture to suggest there must be many potential claimants out there. some banks and other financial institutions panicked and acted

aggressively when the financial world imploded less than six years ago.”


Features 55

ClinicalNegligence Service

Our Group Doctors Chambers • Bodycare Clinics • Smart Online • DC Life • Document Plus

Did you know…?Doctors Chambers was founded to supply medical negligence reports and has been successfully providing this service for over 20 years. Our experience and unrivalled expertise coupled with the knowledge of our in house doctors will ensure all your cases are dealt with professionally and efficiently.

SERVICES Medical Records ServiceWe provide a full medical records service including collation, pagination and indexing. Records are then available in a secure environment for immediate viewing and download Screening ReportsOur screening reports are prepared by highly experienced doctors and provide you with the merits of the case whilst highlighting potential issues so assisting you in planning further medical evidence

Medical Negligence reportsOur extensive database of experts has been built up over many years. We can provide reports on causation and liability as well as condition and prognosis in all specialities and in all parts of the UK

• 20yearsofmedical negligenceexperience

• Unrivalledinhouse medicalexpertise

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Client feedback for legal services: it will never take off! Will it?It is fast becoming a concern as to why a business is not displaying verified public feedback and it is almost being expected by consumers. If consumers cannot give feedback and they are not happy, then they are turning to commenting on blogs where there is no control and no right of reply at all. How can a business defend itself if they limit themselves to this scenario only? Also, how many consumers read these blogs and how many clients could a business potentially lose?

Informing critical decisions.Using client feedback on your services and skills has always been valuable but with online focus playing an ever bigger role in the lives of people, it has now become crucial to your business and how you run it.

You only have to look at the travel business or even at the trades-people market to know that for many consumers, being informed by `feedback` before buying is now considered essential. This trend has sky-rocketed because online, `word of mouth` comment has become easy to place and almost instantly accessible.

For professional service providers, this can bring huge immediate and medium-term advantages - not least getting more new clients and understanding viewpoints on what`s great about your business and what`s not.

I’ll wait, sit tight and see what happens.Why wait for your competition to make the first move and get ahead of the game? For some, the temptation to be a follower and never a leader is the easy option - why be different? In years gone by this was acceptable and almost the norm. However nowadays, with the big supermarkets offering legal services through blanket marketing and with many high streets losing out to online trade, being different may be the only way to get in front of your prospective clients!

Those who are pro-active and have a marketing manager or team will see the value in marketing their business

in this completely new way. They place the business where their prospective clients are now looking for them, show they are willing to be transparent and approachable and what services they would like to offer - especially when this is via an independent third party. Eager and forward thinking practices will lead the way and will be rewarded by clients welcoming the legal services into the comparison arena, providing them with a more informed choice.

Be different.Whichever service provider you decide to sign up with, you should consider what is important to you, your clients and what your prospective client is going to experience when searching for you.

You should choose a site that`s free to the user and one which does not require the consumer to register in order to sell the lead to their awaiting members. It is important to ensure that there is no barrier for the consumer to use the service, but this does mean that you, the provider, will probably be paying. In other business areas, experience has shown that up to 40% of new income can come from an online search and feedback site. In today`s economic climate that can be a business’ profitability, or not.

Choosing a site which concentrates on the quality of the service given to a client is important. Promoting costs alone can lead to prospective clients being wowed by headline costs and choosing a legal service provider by these means only. Experience shows that consumers generally do not mind paying for good quality service and this is where a more informed choice wins. Using a good quality comparison site gives the client all the tools to search for themselves who they would like to use.

Customer friendly.As well as your verified customer feedback, your profile on the site should provide your customers with a one-page snapshot of your business. Sites such as www.Checkaprofessional.com, sister site of Checkatrade.com, offer a full and easy to use CRM system hidden behind the scenes for each member (password protected for security), which can really help strategise a practice. It is not just marketing for them; it’s about reputation and a more informed choice for consumers via a three way partnership which really works!

Lisa Beale is Head of Checkaprofessional.com

BuiLDiNG PuBLiC TruSTLegal comparison websites are not going to go away, says

the Legal Services Consumer Panel, which urges lawyers to be more transparent about service and pricing. Lisa Beale reports.

“For many consumers, being informed by `feedback` before buying is now considered essential. this trend has sky-rocketed because online, `word of

mouth` comment has become easy to place and almost instantly accessible.”


Features 57

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Most ATE insurers should now have fully recovered from the unprecedented case numbers

submitted and insured during March 2013 - in many cases right up to the last possible hour on the 31st March, ruining the bank holiday weekend for many ATE insurer staff and fee earners alike.

With the inevitable post LASPO lull of April and May now well out of the way, insurers have had a couple of months to take stock, tweak their products if required and try to identify any early trends or patterns arising from this new beginning.

Impact to date.The first trend worthy of mentioning, is that of personal injury firms either going bust, or simply shutting up shop. This trend is already well under way and quite worryingly, if firms need to close just a few months after LASPO - while still earning ‘appropriate’ fees for the work done - one can only imagine the difficulties some will be in 12 - 24 months down the line, when the new portal fees really start to bite.

Solicitor firm consolidation by M&A activity is also an abundantly clear early trend, which is only likely to increase during the next 24 months or so. From an ATE insurer’s perspective, mergers, acquisitions and takeovers will be broadly neutral over the medium to long term, as firms and cases gained from ‘winning’ an extra book will be balanced by losing another.

Take up of ‘standard’ PI, which includes RTA & EL, but excludes public liability and industrial disease, has been surprisingly strong so far, demonstrating that the defective shield of QOCS, the remaining part 36 risk and own disbursement costs, has ensured an ATE insurance need from solicitors and claimants still exists. Premiums are quite rightly lower than before, reflecting the reduction but not elimination of adverse costs. Yet as own disbursements has always made up circa 40 – 50% of overall claims costs, average premiums were never going to be lower than half price in the round.

After a fairly muted start, clinical

negligence cases are already back to their pre LASPO average in terms of number of submissions and acceptances per month. Obviously the overall written premium is lower but with partial premium recoverability still in place for this type of risk, it is clear that clinical negligence is going to be a more significant part of an ATE insurer’s book going forward. In fact, with the removal of nearly all legal aid for clinical negligence cases, bar a few exceptions, I think the longer term trend will be for an even larger book of cases than we had pre LASPO.

Fears become reality.The phrase ‘access to justice’ or more accurately, reduced, diminished or lack of ‘access to justice’ was often quoted in press releases, consultation responses and lobby group submissions prior to the LASPO Act coming into force. Regrettably, but not unsurprisingly, these fears are no longer theoretical; they can be proven to be true.

Some claimants with personal injuries, resulting from public liability trips, slips or falls or from any number of industrial diseases, are finding it difficult to find a solicitor who is prepared to act on such a case. They also struggle to find a cost effective ATE insurance policy. Because of the nature of these types of claims, with high abandonment rates and high disbursement costs, average ATE premiums (actuarially calculated) can be disproportionate to the damages sought; making the case unviable for insurance. So unless the claimant or solicitor is prepared to cover the costs of potentially losing the case, the claim will not proceed.

Commercial claims.I guess it could be argued by some, that stopping claims against local authorities is exactly what LASPO was all about. That may or may not be the case but it was certainly not supposed to remove access to justice for small and medium sized businesses. Prior to LASPO, our commercial underwriters would reject somewhere in the region of 60% of contract claim submissions, usually due to a lack of prospects of success. Post LASPO, this rejection rate has increased to 80%. This significant uptrend in rejections is purely down to the financial metrics of the cases presented. They may well have a great case in law, with solid prospects of success, but if the likely damages awarded do not cover the ATE premium and solicitors uplift, then once again the case will be rejected as financially unviable.

Such SME disputes as described above, with damages sought of less than £50,000, are very likely to be caught in this unfortunate position. In hindsight, they may well realise that they should have bought a BTE LEI policy, as L J Jackson suggested they should do. However, unless they can fund the action themselves, there are going to be a significant number of businesses that really do suffer a lack of ‘access to justice’ post LASPO.

Phil Bellamy, Group Underwriting, ATE & Special Risks Manager, DAS

a NEW BEGiNNiNGPhil Bellamy takes us through the highs and lows of personal

injury claims post LASPo with a few positive surprises in addition to the grimly expected outcomes for many.

“some claimants with personal injuries, resulting from public liability

trips, slips or falls or from any number of industrial diseases, are finding it difficult to find a solicitor who is

prepared to act on such a case. they also struggle to find a cost effective atE insurance policy...so unless the claimant or solicitor is prepared to cover the costs of potentially losing

the case, the claim will not proceed.”


Features 59

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SBT1463 Charlton Grant - Carpenters Ad.indd 1 03/09/2013 14:58

Well, life in the marketing department of a large personal injury firm has been

interesting, hectic and diverse the last few months. With offers and proposals coming in thick and fast, it almost felt like standing in a fruit and veg market; with everyone shouting at you to sell you their wares. The number of new marketing schemes/initiatives that have passed by my desk, screen and phone have almost sent me dizzy.

terms of business.Being the diligent sort of fellow that I am, I have looked at each and every initiative - all of which, on the surface, claimed to be the answer to my prayers. Then you start to read what they require from you: the cost per month (which has ranged from £2000 a month up to £40,000 a month), along with minimum terms, ranging from three months to 12 months subscription. Each of these claiming they can send me pre-vetted claims from simple road traffic accidents, all the way through to serious brain injuries. Unfortunately when you start to dig deeper, ask seriously probing questions or gain any sort of guarantee on their numbers, they’ll fall back on the stock answer of ‘well as you are aware we are not allowed to give any guarantees on numbers as that would breach the referral code’. So, I am supposed to take a punt of anything from £6000 through to £480,000 on something that I have no guarantee or any sort of commitment that this will work. It’s amazing how these figures, divided by the number of claims/enquiries they say they can send me, always comes to roughly the same figure of £500 per enquiry!

Pay(back) per click.Then we start looking at the internet and pay per click. It seems that in the months leading up to April 2013, the cost of pay per click terms were not just going up on a daily basis but hourly, as the world and his wife attempted to stock the filing cabinets with as many claims as they could. Post April, the cost of some of these terms is reduced while others have remained the same. Some have gone even higher.

The pay per click terms surrounding an RTA/whiplash case, have not only stayed the same but in most cases increased, meaning that to be in position one, two or three, the cost per click is anywhere between £40-£60. Some people say that’s cheap but in reality, one click does not equal one case. The reality is (with the conversion rate being so low on these types of cases) a converted case could cost you between £2500 and £3000. So for the £2500 simple RTA which goes through the portal, you recover £500. This to me is

business suicide but some are hell-bent on doing this, like lemmings on a cliff.

Pop up and go.Then we come to all the other weird and wonderful ideas that marketing companies want to try and sell us. From advertising on the backs of hospital appointment cards, GP surgeries and taking stands in shopping precincts. Don’t get me wrong, these can work but at a cost. Please don’t expect, just because your advertising in a local hospital on a TV screen, that you’re suddenly going to be inundated with claims. It’s just not going to happen. As to the shopping precincts; I’ve done it in the past with average success and so long as the dry weather stays with us, I plan to do it again soon.

Pound for pound.The burning question is, what do I spend my money on? Especially when there’s a man with a suitcase shouting about social media next to the personal injury marketing stall…

Most law firms that play at this play badly. This is a serious marketplace that should be looked at in a serious manner. We’ve all heard of Facebook, Twitter and LinkedIn - not forgetting the new kid on the block, Google+ - and nearly all of them have been discounted as fads. But this is an integral part of any marketing strategy and should be given the same serious thought, time, effort and resource that mainstream marketing initiatives are given, as it can prove more pound for pound effective in this modern age.

What I would suggest is that you look at everything, analyse and see if the solution fits within the model of your business. Make sure you have the correct blend of fruits and vegetables in your marketing bag and (importantly), make sure that bag doesn’t split on your way home, with everything coming out bruised.

Gavin Redman is the Business Development Manager at Express Solicitors

rOLL uP, rOLL uP…Welcome to the personal injury market stall. As marketing collaboratives and new lead generation initiatives spring into life for practitioners, Gavin redman looks for the real ‘deal’ in the plethora of marketing company pitches and how to set

out your own stall to compete in difficult times.

“Please don’t expect, just because your advertising in a local hospital on a tV screen, that you’re suddenly going to

be inundated with claims. it’s just not going to happen.”


Features 61

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Features62

arMED aND rEaDy Darren Gower outlines the It solution that will support Smith Jones Solicitors’ - one of the leading businesses in Lancashire – in its mission to become the number one

personal injury firm in the region.

Smith Jones Solicitors is a

rapidly expanding personal injury practice and one of Lancashire’s best performing businesses, across all sectors. The firm currently

employs 60 people at its Burnley HQ and Warwickshire office.

the challengeThe incumbent software solution’s vendor was acquired by a large multinational organisation. This meant that the development path for that product was abruptly ended. Smith Jones took the initiative and went to market for a future-proof practice management system. Core requirements were a guaranteed

development path, simplicity of use, and tools that would enable lean, cost cutting process creation.

the solutionFollowing a detailed analysis of available solutions, the decision was made to implement Proclaim. Smith Jones saw Proclaim as ‘the next step’ in practice management - future-proof, with a strong track record and rich fee earner toolset. Importantly, the cultural fit between Eclipse and Smith Jones was excellent; both are growing companies with a long-term vision.

the resultsProclaim is used at every step of the client journey. The system’s ‘Lead Management’ toolset comes into play at very first contact, tracking key statistics for Smith Jones to ascertain the success of marketing campaigns. Features such

as SMS text messaging and automated ‘milestone’ emails keep clients in the loop through the life of their case.

Smith Jones utilises Proclaim’s ‘A2A’ system for processing RTA cases through the Portal, and will be implementing the system for EL / PL files too. The practice has also created its own costs budgeting system to take into account new rulings on high-value injury cases.

The future will see Smith Jones expand its operations, aiming to be the number one personal injury firm in the region. Proclaim will sit at the core, providing a flexible and future-proof practice-wide solution.

By Darren Gower, Eclipse Legal Systems

5 MiNuTES WiTH...rod Evans President of the Forum of Insurance Lawyers (FoIL)

Q: Has the industry changed drastically since you started working in it?A: I feel fortunate to be working in the legal profession when the most seismic changes are taking place. The end of the monopoly upon solicitors owning and running legal practices, thereby allowing significant inward investment, was always going to reshape the legal

landscape. While I felt the Legal Services Act was far too skewed towards work carried out for consumers and ignored B2B, the results so far have been encouraging. I was told recently that Co-op Legal Services is already reckoned to be the largest provider of matrimonial advice. Who’d have guessed that Eddie Stobart would be defending you? In the personal injury market, the Jackson Reforms have acted as a catalyst to hasten change. Try telling Quindell or Slater & Gordon that the claimant market is doomed!

Q: What has been the key positive or negative impact of change in your market?A: Life is too short to concentrate on the negatives. The level of service we are now able to provide to insurers has changed beyond recognition but the hourly rate charged is typically similar to the guideline court rates allowed last millennium. In essence, this means we are charging around a third of the rate that a number of the claimant firms are allowed to charge by

the courts - before their success fee is put on top!

Q: Who inspires you and why?A: The janitor in our office block. His wife has emphysema. If ever you bump into him when he is cleaning the toilets (not a job that many of us would aspire to) he is unfailingly cheerful. How can you grumble about a bad day after that?

Q: Have you had/got a mentor? If so, what was the most valuable piece of advice they gave to you?A: Many people have helped me; no one stands out in particular. However, a good friend told me ‘friends come and go but enemies multiply’. As a litigator, that is something to be taken to heart.

Q: If you were not in your current position, what would you be doing?A: CEO of an ABS to take advantage of the opportunities that the Legal Services Act provides. You have been warned.

Rod Evans qualified in 1981 and has 30 years’ experience in insurance litigation both in the UK and in Hong Kong. He has acted for insurers, including stints in product liability, employers’ liability (particularly industrial disease) before turning to specialise in catastrophic injury and large loss fraud claims. In May 2011, Rod and his team joined Greenwoods to set up their Southampton office where Rod leads a Personal Injury team of 15.

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Modern Claims Magazine - Issue 3

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Transcript of Modern Claims Magazine - Issue 3