Modern Claims Magazine 11

Linking the Industry Together

January 2015 | Issue 11 | ISSN 2051-6495 The road ahead: Autonomous vehicles (AVs) are on their way and the first massproduction versions could arrive within the next ten years, as Mark Hollick explains.

Managing a crisis: Tim Wallis and Anne Staunton explain how Claims Professionals can incorporate Crisis and Reputation Management into their Business Strategies and beyond.

Modern Claims Magazine | Janaury 2015 | Issue 11

“[The changes in the PI market have] sorted the wheat from the chaff but those with strong business models and innovation at the heart of what they do, have no excuse not to thrive in the current climate”

Ed Fletcher

Matthew Avery “Thatcham has had to react to [the claims culture] and more of our research now focuses on vehicle induced injuries than repair efforts”

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03

Welcome to H

appy New Year and welcome to the first 2015 edition of Modern Claims Magazine.

A big talking point already for 2015 and beyond is autonomous vehicles (AVs) and their potential impact on the sector and consumers, which is why we have a strong ‘automotive’ focus in this issue. Our cover star, Matthew Avery, Safety Research Director at Thatcham, spoke to me about how crash testing and research has evolved and is continuing to do so in the fast-paced claims environment, and the benefits of AVs. Full coverage from the interview is featured from page 13. Paul Hollick, the new Chairman of the Institute of Car Fleet Managers (ICFM), explains how the introduction of AVs in the next 10 years could mean significant changes for the insurance industry (page 50).

Other highlights for this issue include our Personal Injury focus, as David Bott, Senior Partner at Bott & Co, reports on what guidance exists for lawyers as they venture into the new digital world and explains why he is still frustrated about the ‘Rules and Regs’ of solicitor marketing (from page 7). I also spoke to leading personal injury lawyer, Ed Fletcher, Chief Executive of Fletchers Solicitors. Ed has

an interesting take on the approach Fletchers takes to its clients, having suffered a catastrophic spinal cord injury when he came off his motorbike over 10 years ago. Find out what Ed has to say from page 17 onwards.

Strategic management for claims professionals is now more important than ever and Tim Wallis and Anne Staunton explain how Claims Professionals can incorporate Crisis and Reputation Management into their Business Strategies and beyond (page 55). Management and building a client focussed business are also key themes for our Modern Claims Conference, which is taking place later this year (full details below). Please keep an eye out for tickets, which will be on sale soon.

I hope you enjoy this issue of Modern Claims and if you have any comments, feedback or stories to share, drop me a line on 01765 600909 or e-mail me via: charlotte.parkinson@charltongrant.co.uk

Charlotte

Charlotte Parkinson, Group Editor, Modern Claims Magazine

Dates for your Diary: The Modern Claims Awards, 30th April 2015, New Dock Hall, The Royal Armouries, Leeds The Modern Claims Conference, 19th May 2015, Chelsea FC, Stamford Bridge, London

Modern Claims Magazine

Issue 11 January 2015 | ISSN 2051-6495

Project Director Kate McKittrick

Group Editor Head of Sales Charlotte Parkinson Rachael Pearson

Production Victoria Lang-Burns

Accounts Director Karl Mason

Events Director Julia Todd

Design Richard Berry

Project Manager Ben Longbottom

Modern Claims Magazine is published by Charlton Grant Ltd ©2015.

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.

MC // January 2015

04

CONTENTS 03-10 Intro & THE News 07 David Bott talks news

The Senior Partner at Bott & Co discusses what guidance exists for lawyers as they venture into the new digital world.

11-20 THE INTERVIEWS 13 Interview with... Matthew Avery

Charlotte Parkinson, Modern Claims, spoke to the Safety Research Director at Thatcham to find out how crash testing and research has evolved and is continuing to do so in the fast paced claims environment, particularly in relation to autonomous vehicles.

17 Interview with... Ed Fletcher

Charlotte Parkinson, Modern Claims spoke to the Chief Executive of Fletchers Solicitors about how his own experiences have shaped his legal career and why Fletchers are leading the march of innovation in a fast-paced sector.

07

21-47 The Opinions 22 Sector Soapbox

Modern Claims’ affiliate Associations, ARC, MASS and FOIL give us the lowdown on what’s in store for 2015.

25 The human touch...

David J Williams, AXA Insurance

25 From ‘Claimant’ to ‘Consumer

David Jabbari, Parabis Law LLP

17

27 Conversation is key...

Bruce Bourne, Bruce Bourne Associates LLP

27 A necessary step?

Alistair Schuberth, Willis Group

29 Planning ahead...

Nicola Klimkowski, LAMP Services Limited

29 Too much on the plate

Darren Gower, Eclipse Legal Systems, part of Capita plc

31 Gathering pace...

Scott Whyte, Watermans

22

31 Groundbreaking solutions...

David Simon, Triton Global Limited

33 Investing in the future...

Paul Sykes, Audatex (UK) Ltd.

Editorial Columnists Alan Nesbit Managing Partner, Nesbit Law Group LLP Chairman, ARC

Darren Gower Marketing Director Eclipse Legal Systems, part of Capita plc

Alistair Schuberth Associate Director, Claims Defensibility, Risk Management Willis Group

David Bott Senior Partner Bott & Co

Andrew Chadwick Costs Manager Ultimate Costs Anne Staunton Owner/Managing Director Peak Marketing & Communication Services Ltd Bruce Bourne Commercial Mediator Bruce Bourne Associates LLP Charles Cox CEO TLMG

MC // January 2015

David Jabbari Partner & Managing Director, Consumer Law Parabis Law LLP David Simon Chairman Triton Global Limited David Spencer Partner BLM David J Williams Managing Director, Underwriting AXA Derek Cooper Managing Director [Veracity] Claims Solutions

Donna Scully Partner Carpenters

Kamran Akram Principal Asons Solicitors

Peter Milligan Advocate Compass Chambers

Emma Holcroft Director 2020 Investigations

Lisa Beale Head Checkaprofessional.com

Scott Whyte Managing Director Watermans

Gerry Lee Senior Partner P R Hanna Solicitors, Belfast

Martin Doyle Director Amberis ATE

Hilary Meredith CEO Hilary Meredith Solicitors

Nicola Klimkowski Head of Business Control and Development LAMP Services Limited

Susan Brown Chairman Motor Accident Solicitors Society (MASS)

Ian Ambrose Director Amber Claims Management Janet Tilley National Managing Partner Colemans-ctts Solicitors Jason Stinson Managing Director Raw2K Ltd

Nick Parsons President FOIL Paul Hollick Chairman ICFM Paul Hughes Chief Executive pH interim Ltd

Tim Wallis Mediator, Solicitor, Director Expedite Resolution & Trust Mediation Zoe Holland Managing Director Zebra Legal Consulting

05

33 Fad or Fact?

Janet Tilley, Colemans-ctts Solicitors

35 The road to prosperity...

47-62 The Features 49 A match made in heaven?

Andrew Chadwick, Ultimate Costs

35 Credit Hire Statement of Consumer

Rights – why don’t we all work together?

Derek Cooper, [Veracity] Claims Solutions

37 Is a CPR-35 compliant forensic

report necessary to repudiate the majority of claims?

50 The road ahead

Paul Hughes, pH interim Limited

37 Life in the fast lane...

Emma Holcroft, 2020 Investigations

39 Moving in the right direction...

Hilary Meredith, Hilary Meredith Solicitors Limited

your peril...

Kamran Akram, Asons Solicitors

Zoe Holland, Zebra Legal Consulting

41 The competitive advantage

Peter Milligan, Compass Chambers

Lisa Beale, Checkaprofessional.com

43 Up for debate...

Gerry Lee, PR Hanna Solicitors, Belfast

45 What is the real value of social

media?

Martin Doyle, Amberis ATE

Tim Wallis and Anne Staunton explain how Claims Professionals can incorporate Crisis and Reputation Management into their Business Strategies and beyond.

Flexibility and transparency throughout the vehicle salvage process should be a fundamental focus when streamlining the client’s experience, as Jason Stinson reports.

50

59 Employment Tribunal fees –

Charles Cox, TLMG Limited

45 Assessing the options...

Modern Claims’ resident legal experts, Alan Nesbit, Donna Scully and David Spencer discuss the latest news and updates for the claims sector.

57 Exceeding expectations

43 Taking the lead...

29

55 Managing a crisis

41 M&A Activity

Autonomous vehicles (AVs) are on their way and the first mass-production versions could arrive within the next ten years. Paul Hollick explains why this may mean significant change for the insurance industry.

52 Legal Opinion

39 Ignore the march of technology at

Research from an OFCOM report released in late 2014 under the headline grabbing stat that the average UK adult now spends more time using media/ communications than they do sleeping, tells us in the claims industry that mobile is a medium that cannot be ignored.

Sucheet Amin reports.

Counting the cost

Peter Orton reports on the dramatic fall in claims following the introduction of employment tribunal fees in July 2013.

61 There’s a new kid in town

But unfortunately it’s an unruly amendment and a bit of a troublemaker, as Simon Pinner reports.

62 5 minutes with...

Adrian Furness

62 Ground-breaking ABS to

implement Proclaim

Aspire Law chooses Eclipse’s Proclaim Case Management solution.

57 MC // January 2015

David Bott talks news

07

DAVID BOTT Talks News...

The Senior Partner at Bott & Co discusses what guidance exists for lawyers as they venture into the new digital world.

H

ere we are in the twenty first century, living lives full of the trappings of this new and fast-moving modern era, but are lawyers and their regulators keeping up?

Looking back to look forward The last ten years in the personal injury sphere have seen change, the like of which has never been seen before. Let’s look at a timeline of these developments: • 2003 – Introduction of the fixed cost regime, dealing with all non-litigated Road Traffic Act (RTA) matters with injury levels up to £10,000 • 2010– Introduction of the Portal, dealing with all RTA matters with injury levels up to £10,000 • 2010- A new fixed fee cost structure within the Portal • 2013- Referral fees banned • 2013 - An end to clients receiving 100% of their damages and the likelihood that up to 25% of their damages together with an After The Event Insurance premium are now payable by the client • 2013 - Reduction of 60% in the fixed cost structure within the Portal • 2013 - The Portal extended to deal with RTA matters, Employers Liability (EL) and Public Liability Matters (PL) with injury levels up to £25,000 • 2014- The cost of medical reports in the RTA Portal is fixed • 2015– The proposed introduction of Medco.

So in order to survive, let alone thrive, over the last five years you have had to become good at change management. To not change could have been pretty disastrous.

At my firm, Bott & Co, we have tried to concentrate on and develop what we believed were our strengths: Process, Information Technology and great client-centred service.

But the changes that became necessary as a result of the evolution of the personal injury landscape meant that we had a tumultuous 2013, in which all of the following figured: 1. Redundancy 2. Investment in IT 3. Investment in new processes 4. Branching out into new areas of law 5. Purchasing stakes in other companies – in order to be more certain of compliance and to consolidate the supply chain 6. Investment in self-generation of work based around a B2C marketing strategy 7. Changing the status of the firm from a partnership ABS to a limited company ABS. In essence, 2013 was an investment year and one that saw the firm only just creep into profit: a genuinely tough year for the staff and management alike. The good news is that we were able to tell the bank that we were not going

‘Self-sufficiency for solicitors in the twenty first century is very different to selfsufficiency in the twentieth century’ to make much (if any) profit in 2013. As such, the lack of profit did not come as a shock to them and their support remained. The further good news is that 2014 has been a genuinely good year. It has been a year in which turnover has dropped but profit is back and the investments we have made previously now appear to be coming to fruition.

Moving with the times Why am I telling you all this? And what does this have to do with the twenty-first century? Well it is because, post-

MC // January 2015

08

David Bott talks news

‘CMCs, and by association nuisance calls, exist because the regulations on how law firms market have been too strict for too long, thus allowing less regulated organisations to fill any perceived void’ Jackson, post referral fee ban and post slashing of fees, one of the ways forward for law firms is self-sufficiency. But as I have learnt from personal experience, self-sufficiency for solicitors in the twenty-first century is very different to self-sufficiency in the twentieth century. The main difference, and what I would like to centre upon, is the issue of marketing a law firm.

We’re not all playing by the same rules Rupert Murdoch, via Sky TV, tells me monthly that if I recommend a friend to use his service, that he will give me £50.

Can I, or indeed any solicitor, do the same? The simple answer is “no”. This is a referral fee and those were banned for solicitors in April 2013. Ok, so I cannot pay a third party. Maybe I can pay the individual an incentive to come to me direct?

Well now we enter a whole other discussion about inducements. Many organisations are against it (APIL to name one) but solicitors that undertake such practices are not in breach of anything per se. However, hand on heart, they just don’t look good or feel right, so in my view they are to be approached with caution. Can I stand in the middle of a shopping centre telling everybody about how great my company is? Yes, so long as individuals come up to me rather than the other way round.

Do offline rules work in the online world?

So what about social media? Most targeted marketing campaigns have a social media aspect. There are of course the marketing stalwarts of Twitter and Facebook but also a whole host of other social media platforms such as Google+, LinkedIn and Instagram to name but a few. As far as I am aware, the Solicitors Regulation Authority, does not have a marketing and social media policy. As such, when assessing the compliance of social media activity everything comes back to the catch all of core duties and asking yourself the question: “is this a bit like cold calling?”

Modern marketing is designed around targeting people that you know have a need. If I see you tweet that you have had a crash, why can I as a solicitor not reply to you to let you know that I can help you? The rules are explicit in saying I cannot contact someone who clearly needs my services because that would be the equivalent of cold calling.

Levelling the playing field Is it not about time that solicitors were allowed to market their services in the same way as any other business?

Clearly, there must be some decorum but I believe that some core rules with regards to integrity and not bringing the profession into disrepute would be sufficient to avoid any perceived apocalypse.

There will certainly be no lack of regulation: If you have read the media over the last three months, it appears that there is going to be a clampdown on nuisance phone calls, an increase in the powers of the Information Commissioners Office, and the Legal Ombudsman handling complaints

MC // January 2015

with regards to Claims Management companies. A Nuisance Calls Taskforce has been set up and company directors could be fined for allowing nuisance calls to be made.

Whilst such moves might lead to a fairer playing field between the lawyers and the Claims Management Companies, do the SRA rules around solicitor advertising not deserve to be looked at also? It is for this very reason that I started this article by asking: Are lawyers and their regulators keeping up with the pace of social media?

There is one strand of wisdom that says CMCs, and by association nuisance calls, exist; because the regulations on how law firms market have been too strict for too long thus allowing less regulated organisations to fill any perceived void.

Why are solicitors not allowed to market in the same way as others?

If you decided, just as we have at Bott & Co, that you want to self-market and become self-sufficient, you might be quite surprised as to what you can and cannot do and where the boundaries lie. So why are solicitors not allowed to market in the same way as others? Whatever the answer to this question is or was, is it even relevant anymore?

Alternative Business Models have allowed investment in the law, and allowed non-lawyers to be partners, shareholders and managers. So why not also open up the marketing rules and actually allow the lawyers the unfettered ability to be self-sufficient?

I am a naive man, and when referral fees were banned, I thought well maybe, this has been done to force me to be self-sufficient.

But if you just ban referral fees and don’t allow me to market freely, doesn’t that just look like the government is out to get lawyers? Surely, that cannot be the case as presumably all any government wants is access to justice for all? I mean it is not as if without any consultation they are about to put in place a system in which choice of the medical expert in a personal injury matter is severely truncated? They wouldn’t be about to just sweep away a system in which my client can choose a female doctor, an appointment to suit her childcare needs, a Muslim doctor or a weekend appointment, would they? Let’s call it Medco and let’s admit that I may well be naive because on the face of it years of a consumer-focussed approach to medical appointments is about to come to an end.

So, yes I’m frustrated. I’m frustrated by the constant changes, frustrated by my inability to freely market my firm and frustrated by the impending retrograde step for medical appointments. But like you, and like most good decent lawyers, we continue to survive because all we want to do is a good job for our clients. Yet I cannot help but think it would be so much easier if we were supported in this regard by our regulator and the government. Then not only could we, as law firms, survive but we might even thrive.

David Bott is Senior Partner at Bott & Co.

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The Interviews

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The Interviews

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Interview with... Matthew Avery

13

Interview with...

Matthew Avery Charlotte Parkinson, Modern Claims, spoke to the Safety Research Director at Thatcham to find out how crash testing and research has evolved and is continuing to do so in the fast paced claims environment, particularly in relation to autonomous vehicles.

Matthew Avery As Research Director at Thatcham, Matthew’s current role involves liaison with vehicle manufacturers, legislators and global NCAP initiatives in all aspects of crash testing, with a view to encouraging safer designs whilst controlling insurance costs.

Matthew has led much of Thatcham’s research work into whiplash testing. He coauthored the international insurance seat assessment procedure, now used as the basis for the Euro NCAP whiplash test and also advises on whiplash issues within the European legislative framework. He also chairs various working groups within the crash test community.

Matthew is currently leading detailed research into collision avoidance technologies and has been pivotal in the definition of test procedures to evaluate Autonomous Emergency Braking (AEB) – these tests now being integrated into the UK Group Rating system and Euro NCAP for 2014.

New research work looking at pedestrian detection and auto-braking will lead to AEB pedestrian tests within Euro NCAP from 2016.

In 2011 he was awarded the US Government Special Award of Appreciation for his contribution to the field of global traffic safety.

‘Thatcham has had to react to [the claims culture] and more of our research now focuses on vehicle induced injuries than repair efforts’

Q

What impact do you anticipate the introduction of autonomous vehicles having on the claims sector as a whole – particularly insurers?

A

Overall, it is good news for the insurers and the guided public because it will reduce crashes as more and more vehicles have these systems. At the moment, we are seeing a 20% reduction in crashes with vehicles fitted with (Autonomous Emergency Breaking) AEB systems and a slightly greater reduction in personal injury claims. This is having a positive impact in reducing the claims culture and also whiplash injuries, which is really good news. We are encouraging vehicle manufacturers to fit these breaks and also to take part in the insurance ranking systems, which gives them a discount of 10%; this makes the vehicles more competitive and is really driving the market.

Ultimately, vehicle manufacturers will fit more of these systems and we expect to see a greater benefit from having them installed. These new systems will lead to a year on year reduction in crashes, repairs and ultimately, injuries.

Q A

What are the key benefits of autonomous technology for both consumers and the profession?

The benefits are multifaceted, manufacturers are now fitting autonomous breaking and adaptive cruise control, which automatically controls distance

MC // January 2015

14

Interview with... Matthew Avery

‘If the industry continues to experience a year on year reduction in claims, our Body Shops need to adapt and evolve into less physical and more electronic specialists’ between the car itself and the car in front. The next big change that we are going to start to see in the next year or two is automatic lane changing or lateral control. This will involve sophisticated steering systems which will keep the car in the lane, keeping the driver safe, especially if the vehicle is wandering out of the lane and another vehicle is coming in the opposite direction. The vehicle will automatically steer itself back into the lane or stop the car running off the road and hitting a tree, for example. These systems together, which control both longitudal and lateral factors combine to create semi-autonomous vehicles.

The principal benefit here is that autonomous technology will prevent crashes by warning the driver of a potentially dangerous situation. The car will be able to take control and take some of the fatigue and stress off the driver. There is a potential long-term negative impact however, in that we might start to see more driver adaptation, as drivers begin to rely on autonomous systems. For now, despite a certain level of distrust from some drivers, because of the robust nature of these new systems, autonomous technology will lead to overall better and safer driving.

‘The focus now is much more on Primary Safety (avoiding the crash), as opposed to Secondary Safety (protecting people in a crash)’

Q A

How has the research remit at Thatcham expanded since the organisation was launched in 1969? Where it the biggest focus currently, in terms of research?

Thatcham has gone through three key periods since it was launched. The first research remit was around material damage and controlling the cost of vehicle repairs, ensuring that high standards were met, vehicles were being repaired safely and the costs were being controlled. In the early 90’s, when there was a huge spate of vehicle thefts, we did a lot of research around alarm technology and we played a huge part in reducing vehicle crime. Having said that, there are still pockets of vehicle related crimes and we have the ongoing issue relating to

MC // January 2015

high value vehicles being stolen via re-programmed keys. In the 2000’s, when we saw the growth of the claims culture, we started to notice a marked increase in personal injury claims. Personal injury claims are now equal to, if not bigger, for some insurers than material damage claims, contributing up to 50% of claims. Thatcham has had to react to that and more of our research now focuses on vehicle induced injuries than repair efforts. We have also become more involved with Euro NCAP and going forward we are trying to bring things together using automated systems.

Q A

How has the organisation evolved to meet legislative changes in the sector?

Our level of engagement has certainly evolved and we are far more engaged with the regulators, in terms of dealing with the Commission and the UK Government. We also interface with the Government to ensure the insurers view is represented and heard. Our work and research with Euro NCAP is ahead of the game, meaning we are able to inform regulatory bodies about trends in insurance claims and the effect of automated systems on the market. Our research into automated vehicles is upgrading our profile within that regulatory environment. We have recently engaged with the Government from the Treasury point of view and are now able to explain the benefits of AEB systems. The other main area of engagement has been with Fleet Managers.

We have highlighted the benefits of AEB systems for their drivers, which includes financial reasons and that they offer a safe environment, as the driving environment is part of their employees working environment.

Q A

How do Thatchams’ member companies provide ongoing strategic guidance to the organisation?

Our Board and insurance liaison groups still offer us direction and can highlight specific problems in certain areas. The current issues we face relate to some of the AEB systems and how they could affect repairs; for example, windscreens. When AEB breaks are installed, specific changes, such as whether the windscreen will need adapting, need to be taken in to consideration as they could incur additional costs. The direction we receive from Board level also focuses on what the Body Shops of the future will look like, as, if the industry continues to experience a year

Interview with... Matthew Avery

15

‘The biggest area of investment is in collision avoidance and up scaling technology, in terms of improving the testing equipment’ on year reduction in claims, our Body Shops need to adapt and evolve into less physical and more electronic specialists in the future. Our Board also lead our Strategic Direction, which focuses on reducing costs and encouraging people to adopt new technology. We see Thatcham moving more towards being able to provide our member companies with specialist, strategic information that will help them price risk more effectively in future.

Q A

How are Thatcham working with the insurance industry to reduce the cost of claims, particularly personal injury claims?

Firstly, the local areas where we work are providing information to our member companies about injury risk are also providing rating products. We are looking at enhancing the benefits of these rating products by providing additional data around personal injury and also integrating Euro NCAP data with the data we collate. We are interested in developing a broader range of products, specifically focussing on pricing the risk of personal injury.

Strategically, we are continuing to engage with Euro NCAP, in terms of making vehicles safer and setting the standard for the vehicle manufacturers, explaining what cars need to be doing in 2020. Collision avoidance technologies, such as breaking for pedestrians, cyclists and addressing crashes at junctions are constantly in development. Our emphasis at the moment is on stopping vehicles pulling out in front of vulnerable road users, such as motorcycles, and we also need to be thinking about reducing other crashes, which are expensive, such as crashes involving motorcycle fleet.

Q A

How has your role at Thatcham changed since you have been working there, particularly in light of technological advances?

Q A

Where does the organisation currently place the biggest investment?

The biggest area of investment is in collision avoidance and up scaling technology, in terms of improving the testing equipment, which is incredibly expensive; the crash dummies alone cost £250,000. We are still placing significant investment in the ‘Body Shop of the Future’ vision and in upgrading the technologies we have for repairing vehicles, as well as the crash avoidance and testing.

Q A

What is in the pipeline for Thatcham in the coming months and years?

Short term, we are focussing on the development of protocols for protecting vulnerable road users, such as cyclists. Vehicle interaction with cyclists is different to that of pedestrians and we are also working on developing our pedestrian protocols for 2016. One of our big medium term goals is developing robotic test targets.

We have to have impactable targets that we can drive cars into and are working with a number of companies on developing these robotic moving targets. They work much like a sleeping policeman that we can drive over. On that sleeping policeman we put a robotic foam target, which we can hit and that won’t get damaged as well as preserving the test car to save costs. We can then test whether the vehicles systems detect that moving target and avoid it, which is a very complex process. This process will dictate the future of how Euro NCAP tests cars.

The most fundamental change has been that when I started working at Thatcham in the 1990’s, much of the research was around physical crash testing; putting dummies into cars and seeing what happened.

Now, the research involves test tracks, driving vehicles into barriers and measuring and assessing how much the vehicles brake and avoid the crash. The focus now is much more on Primary Safety (avoiding the crash), as opposed to Secondary Safety (protecting people in a crash). My role has changed a lot because we used to work on protecting people in the event of a crash, whereas we are now working to avoid the crash in the first place.

MC // January 2015

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Interview with... Ed Fletcher

17

Interview with...

Ed Fletcher Charlotte Parkinson, Modern Claims spoke to the Chief Executive of Fletchers Solicitors about how his own experiences have shaped his legal career and why Fletchers are leading the march of innovation in a fast-paced sector.

Q A

Why did you choose to peruse a legal career?

My best friend growing up, Ben Smoldon, broke his neck playing rugby when we were 16. As a result of that accident, he has been left a tetraplegic wheelchair user.

His case actually opened up a lively legal debate as he was the first person ever to successfully sue a referee and the Referees Society. I saw the difference that this fantastic legal team made to somebody’s life, when an injury had impacted on them so directly. Ben’s claim was not straightforward but he had a great team who fought for him and the rights of the injured person, this subsequently set him up to live as independently as he can and since the settlement, he has gone from strength to strength. This really made me think I could make a difference being a lawyer and I knew what I wanted to do.

Q A

How has your own personal experience influenced your work as Chief Executive of Fletchers?

It has had a very direct impact, as I am a paraplegic wheelchair user. 8 years after Ben’s accident, I was on my way to see him at Twickenham and I came off my motorbike. That experience, of being seriously injured, undergoing rehabilitation in a specialist centre and living day to day with a spinal cord injury, has given me a unique insight into the needs of our severely injured customers. It has also meant that empathy has had a great part to play in the ethos and spirit of Fletchers and because of that, the customer experience is everything to us and we place them at the centre of everything that we do. We have a belief that if the

customer is at the heart, everything else will flow naturally.

Q A

How would you define the Fletchers ethos and culture?

We have got what we call our essence: ‘In this together’. This is in the sense of the contact we have with the injured person throughout the case, to settlement and beyond but also in-house in that we look after one another within the organisation. We call this ‘Corporate Plus’, the plus being the family element; we all feel like a team who are bonded together to do the right thing. The corporate DNA of Fletchers is making great legal advice accessible to all, the planks of which are the 4 P’s: we are principled; pioneering; plain and personal and if we stick to being good at those and stay true to our roots, we will be alright. We have also received our ranking from The Sunday Times ‘Best Companies to work for’, in which the employee engagement survey praised our leadership for being value driven and fostering a listening culture. I am very proud of this and it also ties with receiving the Investors in People Gold Award.

Q A

How have the changes to the legal sector, particularly in the PI market, affected Fletchers?

It has definitely sorted the wheat from the chaff but those with strong business models and innovation at the heart of what they do, have no excuse not to thrive in the current climate. I don’t think the ‘sorting out’ has been a bad thing.

‘[The changes in the PI market have] sorted the wheat from the chaff but those with strong business models and innovation at the heart of what they do, have no excuse not to thrive in the current climate’ MC // January 2015

18

Interview with... Ed Fletcher

Ed Fletcher Specialises in: Spinal Injury, Brain Injury, Amputation Claims, Catastrophic Injury Claims.

Ed joined the company in September 1996. Having severed his spinal cord in a motorbike accident over 10 years ago, no one is better suited to understand the needs of the severely injured and that’s why Ed has made it his mission in life to help those with spinal injuries. This is all part and parcel of his personal mantra of putting the needs of the victim at the heart of everything he does; and he does it all day in day out with tireless gusto and enthusiasm.

A senior litigator member of APIL, Ed also counts chairman of the North-West Spinal Injuries Centre Patient Group as one of his other duties. The Chambers directory, which ranks the world’s leading lawyers, noted Ed to be “an approachable lawyer with a comprehensive understanding of complex spinal cord injury cases.” Ed has obtained tens of millions of pounds for his spinal cord injured clients to assist them rebuild their lives.

And in between all that, Ed still finds time to be a keen handcyclist, sit-skier and swimmer, at one time being a member of the Team GB Para Triathlon Squad.

He was shortlisted for Personal Injury Lawyer of the Year at the PI Awards in 2012.

‘Some rogues that were swimming in the murky waters of RTA whiplash litigation, are now trying to jemmy their way in to our section of the market but to date, we haven’t felt any impact from that’ MC // January 2015

Interview with... Ed Fletcher

19

‘I fear that many of the traditional law firms aren’t set up to nurture the best possible talent because they are stuck in their old ways’

Q A

How have the nature of catastrophic/medical negligence claims specifically changed in the last 2 years?

There have been more entrants to the market, which is fine as healthy competition keeps us sharp and focussed on providing the best service. Some rogues that were swimming in the murky waters of RTA whiplash litigation, are now trying to jemmy their way in to our section of the market but to date, we haven’t felt any impact from that.

Q A

Have these changes meant that many firms have reduced their ‘risk’ intake and been forced to focus on lower value claims?

I haven’t seen that reflected in the market, there have always been the high volume, ‘pile ‘em high and sell ‘em cheap’ providers, and there have always been the high value merchants, who put the injured party at the heart of what they do. Yes, there is a risk element but, there will always be firms who are willing to take the risks, who believe their clients have been wronged and want to give them the best representation. The organisations that have had that philosophy will continue to remain strong and able to take risks. Some of these ex-whiplash merchants are not driven by the same values that we are at Fletchers.

Q A

Do you think the legal profession is diverse enough and is a legal career still attractive to young people?

I am passionate about this; the legal profession is absolutely not diverse enough. At Fletchers, 65% of our workforce is female but the fact that some traditional law firms are not prepared to change their models to accommodate people who may need to work in a different way due to family and child commitments is absolutely crazy. We are reaping the benefits of being able to accommodate these staff because of being flexible.

The legal profession is still a brilliant one to work in when compared to others; we are well paid, the work is satisfying, we get to help those who have been let down and it is possible to make a real difference to people’s lives. To me, it is still the best job in the world. The legal sector is gradually becoming more of a meritocracy, it is far better than it used to be but we are still not there yet in terms of diversity. It shouldn’t matter what your background, sex, race or relig ion is and this is something I am trying to champion at Fletchers. If you are good enough here you will rise to the top but I fear that many of the traditional law firms aren’t set up to nurture the best possible talent because they are stuck in their old ways.

Q ‘When you don’t have a huge budget and when you are hungry, A innovation blossoms’

What do you envisage for the future of Fletchers, do you have plans for further growth?

We certainly have plans for further controlled growth and increasing our market share capture. We are also in the London Stock Exchange Top 1000 Companies to inspire Britain and for me, I want to continue inspiring, being innovative and leading a march to make litigation more customer focussed.

Q A

What are the challenges of being a niche practitioner in the current marketplace?

Fighting with the big boys on price and spend, however, when budgets are smaller, it forces us to be smarter. Big budgets often breed stagnation and comfort zone thinking as well as spending. When you don’t have a huge budget and when you are hungry, innovation blossoms. If there is the right culture and vision backing determination, that will see you through. We have had some remarkable success on a much tighter budget than some of these big players.

MC // January 2015

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The Opinions

21-48

The OPINIONS

21

22

Sector Soapbox

Sector Soapbox What’s in store in 2015?

C

hanges have come thick and fast for insurers and lawyers in the last few years, so one might be forgiven for privately hoping that a year of consolidation lay ahead. If so, forget it! There is little sign of any slowing up. With a General Election fixed for May, we know spending-neutral and cost-saving changes will be pursued

by Government with even greater vigour. Politicians seeking re-election will need war stories to tell as they bid for power.

The Ministry of Justice has been on a mission throughout this Parliament to bear down on the “compensation culture”, exemplified by the momentum behind significant reform around whiplash claims. Whiplash, the lightening conductor of compensation abuse, epitomises the excesses and bad behaviour Government wants to stamp out of insurance claims. How the Whiplash Reform plays out and how MedCo delivers will be closely studied, and no doubt the government are expecting success. Much work has gone into the process from all parties and the aim is to ensure that those injured obtain good quality medical evidence and proper compensation at a sensible cost.

A host of other law reforms have kept insurance lawyers

– claimant and defendant – on their toes. At times it has seemed that barely is one rule being bedded in, when another new rule comes into a play. Sanity has returned around relief from sanctions with the turmoil created by the Mitchell decision being substantially relieved by the restatement of the proper approach to Rule 3.9 in Denton.

The signs are that, after that wrong turn, pragmatism is returning in place of point scoring – and a good thing too.

Whilst the plethora of rule changes and reforms have been unprecedented, the biggest change for solicitors practices has been in the ongoing impact of legal market liberalisation, which has allowed non-lawyers to become involved in providing legal services.

As insurers, accountants and a variety of other players enter the legal services market, insurance law firms will have to embrace change and adapt to it. Failure to do so will spell trouble. The pace of change as ABSs emerge, and business models evolve, has been steady but relentless. In ten years’ time, the scale and nature of the changes will be apparent in a way which it is not always today. Law firms as we know them are going to be replaced by legal services businesses.

Will that be a good thing? Only time will tell.

Nick Parsons, President, Forum of Insurance Lawyers (FOIL).

Hard times

I

nsurers and politicians seem to think it is easy. A claimant is either wholly genuine or fundamentally dishonest, and there are no shades of grey. But in over 20 years of representing claimants, I have seen far more grey than black or white. One reason is that the adversarial system tends to drive both parties to present their cases in the most attractive light, and another is that some people simply find it harder to recover from the effects of injury or illness than others. This is what worries me about a change in the law that requires a court to dismiss a claimant’s entire claim if, on the balance of probabilities, it finds that the claimant has been fundamentally dishonest in relation to any aspect of it.

The change, proposed in the Criminal Justice and Courts Bill, comes against a background of reported cases where the courts have accepted defendants’ submissions that the claimant has presented a grossly exaggerated claim, but have still awarded damages for the genuine element of the claim.

The current law is that the court can strike out a dishonest claim where it is just and proportionate to do so. When in force, the new law will be that the court must dismiss a dishonest claim unless it is satisfied that the claimant would suffer substantial

MC // January 2015

injustice if the claim were dismissed. Exactly how the court will interpret this shift is difficult to predict, but it is highly likely that, particularly in the fast track, genuine claims will be dismissed and claimants ordered to pay defendants’ costs.

Many of these cases never find their way near a court, but are fought between professionals from both sides. In this new world, claimants will be faced with stark choices: take the offer, or fight on with the risk that you may not be believed by a judge, receive no compensation and be faced with a substantial bill for the defendant’s costs. Clear advice will be needed on the risks the client is running.

Claimants and their lawyers will have to be very alert to the risks of introducing elements into the claim that could be regarded as exaggerated or unreasonable and therefore dishonest. We will have to consider whether the symptoms complained of are all directly accident-related or whether they can be challenged.

Some conditions should not be regarded as dishonest merely because doctors cannot explain their symptoms in simple clinical terms. Times are already difficult for claimants and their lawyers. I predict they are about to get harder.

Susan Brown, Chair, the Motor Accident Solicitors Society (MASS) and Director of Prolegal.

Sector Soapbox

23

Passing the buck...

How will the Legal Ombudsman’s Service cope when they take over from the MOJ in dealing with complaints regarding Claims Management Companies?

S

ince 2007, any complaints about CMC’s have been handled by the Regulator directly. However, this will all change on the target date of 28th January 2015, when the Legal Ombudsman will take over the baton. As well as general complaints, consumers will have the opportunity to receive redress, which will of course include financial redress. LeO have obviously anticipated a certain number of complaints based upon the numbers received by the Claims Management Regulation Unit in Burton. However, the opportunity to receive financial redress will to my mind, once widely publicised, significantly increase those numbers.

I appreciate that it has not been completely plain sailing for LeO dealing with Law firms, however this is still a world apart from the vagaries of the CMC industry. The likelihood (at first) is that the vast majority of complaints will be regarding PPI Claims and in particular, the deduction at the point of settlement. The vast majority of PPI Claims are

carried out by large, board led entities and so records and paperwork are relatively straightforward to obtain. With the advent of success fee deductions in Personal Injury cases since April 2013, there are a number of relationships involving CMC’s where the deduction is shared between the CMC and the Law firm. It is this area which will expose LeO to their greatest difficulties.

Whereas there are a number of very large PI CMC’s, there are far more entities ranging from very small to medium sized who operate in anything but a corporate manner. Filing systems kept in people’s heads, mandatory paperwork at best a flight of fancy. This will make evidencing any complaint paperwork nigh on impossible. It is to be hoped that Clients may have kept some paperwork, but that is no guarantee either. Of course the other significant issue will be the obvious passing of the buck.

CMC’s will state that it is the Solicitor’s fault and vice-versa.

The inevitable cross over and confusion this will cause is going to take some real untangling by skilled case workers.

I genuinely wish them all the best…

Alan Nesbit, Chairman, Association of Regulated Claims Management Companies (ARC).

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MC // January 2015

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The Opinions

The human touch...

As technology continues to drive change in the claims market, are areas of the sector (such as underwriting), at risk of being phased out in favour of automated processes?

W

e have had technology assisting us in the Insurance Market for some considerable time; hopefully making things better for both the insurer and end customer. Whilst many welcome these advances with open arms, some see the advent of new approaches as a risk to employment.

This isn’t new, I remember way back in the 90’s Underwriters being concerned that the ‘Commercial Lines Market Initiative’, CLMI (or ‘Slimey Climey’ to the more Paranoid), would “Take our Jobs!”.

It didn’t, but what do Underwriters really do and will they eventually all be replaced by machines?

An underwriter is meant to assess the risk, use their understanding beyond a simple ‘Book Rate’, apply terms, conditions and settle on a price for each individual risk.

Whilst some talk about ‘Gut Feel’, the reality is it is the minor nuances, the granularity of detail about the risk, that an Underwriter takes and ‘adapts’ the book rate and terms.

Previously, technology could just about cope with that standard ‘book rate’ but now the reality is that rating engines can take information from a huge number of data sources, as well as properly considering information provided by customers and brokers in ways never thought possible. We now have systems that consider thousands of variables and millions of quotations in a matter of seconds, so do we need Underwriters at all anymore?

My view is that the ‘Bread and Butter’ risks, the vast majority that are quoted, both in the Personal Lines and Commercial sectors, can be processed entirely without touching the sides, and this will transform our market and the careers of underwriters over the next few years.

Underwriters will still be required, but in a very different way.

First we need even more numerate, almost actuarial and data scientist style underwriters to be setting up that technology, monitoring and tweaking rates in the way that most personal lines business have been written for a while now.

25

From ‘Claimant’ to ‘Consumer’

O

ne of the challenges for an insurer in making the move into a strong national consumer law offering to the public, is to ensure that the mindset of ‘claims handling’ does not get in the way. Don’t get me wrong: the process of claims handling is a vital customer journey that needs to be every bit as good as the interaction that the customer has with all parts of the insurer’s business. Any failure will affect renewals and is therefore crucial. The slight difference is that when we work on consumer law products, these are discretionary purchases made against stiff competition in the market.

In other words, the customer has to be persuaded to make the journey, return terms of business, and stay with the product, rather than following a claims journey dictated by their choice of an insurance product. The customer will also be very directly mindful of the brand promises made in TV or other forms of advertising, which induced them to choose the product.

It’s a subtle but important difference. The mindset change is away from doing customer satisfaction evaluation and SLA monitoring because that is one very important aspect of a process, to being completely driven by it, or better obsessed. It isn’t enough to have happy customers if you are going to help a company become a major legal brand: you need customers who will enthuse about the product and recommend it to friends and family. The only way you do this is by creating teams of lawyers who enjoy being driven by customer service and who use customer satisfaction data as their most important MI on a daily basis.

This is why we have started the process of training our lawyers in the kind of customer service training more likely to be found at Virgin or First Direct. The best thing about this change in mindset is how it increases the satisfaction that lawyers get from their work, moving from a purely technical attitude to having real empathy with the people for whom they are delivering solutions.

David Jabbari, Partner and Managing Director of Consumer Law, Parabis Law LLP.

Above the Volume/Package area, even Big Data isn’t yet a match for the experienced underwriter who truly understands the customer, their business and processes, these will still need to be underwritten individually, so there is (Human) life in the sector for a while yet!

David J Williams, Managing Director, Underwriting, AXA Insurance.

MC // January 2015

The Opinions

Conversation is key...

H

appy New Year to you all. What will 2015 bring to the world of claims and disputes? If we look at the ‘Back to the Future’ films, they suggested that by 2015 there will be no lawyers. They suggested that this being the case all claims would be dealt with much quicker and cheaper. There were a lot of good bits to the film but fortunately or unfortunately, depending on who you are, the above prophecy has not become reality.

So, should we look to the Chinese to help us anticipate what the year will bring? 2015 is the year of the sheep (or goat).

Its motto is ‘I am a passive onlooker and I let bygones be bygones’. The prophecy is that the sheep will help us all live in harmony and lack of conflict. Unfortunately, human nature is such that this is unlikely to happen and we will continue to follow each other into disputes like sheep without asking why we are doing so.

A general election is planned and we will therefore experience, for the first six months of the year, political turmoil and a certain amount of economic uncertainty, as the political parties do battle for our votes. What happens in the second six months of the year will depend on who wins those battles and ultimately that particular war. Our political leaders, who you would have thought should know better, find the simplest matters to dispute.

One thing is for sure in 2015, people will continue to claim on their insurance policies for their mishaps and have disputes with each other over anything they can possibly imagine. The challenge for the claims and dispute resolution professions is how can we deal with these aspects of life with as little time and cost as possible?

There is no simple answer to these questions, otherwise someone would have already worked it out and life would be a lot better for us all. There does however seem to be one rather obvious point and that is that the insurance claims world deal with disputes and dispute resolvers help settle disputes. Perhaps one of our 2015 New Year resolutions should be to talk to each other and see how we can help each other achieve our goals.

Bruce Bourne, Commercial Mediator, Bruce Bourne Associates LLP.

27

A necessary step?

Does the Pre-Action Protocol adequately ensure claimant representatives undertake a ‘previous claims’ data search prior to accepting new claims, or should further amendments be made?

T

here are currently no requirements for Claimant lawyers to check a prospective client’s claims history. However, this has now been proposed as part of the second phase of the government’s reform of the system for dealing with low-value whiplash claims. The aim is to make it mandatory for claimant representatives to check the claims history of potential clients before sending a Claim Notification Form to the defendant’s insurer. Failure to do so will prevent a whiplash claim from being started.

Overall I consider this would adequately ensure that Claimant representatives undertake such a search and, in my view, it is not necessary to expect anything further than this. However, I do have some scepticism regarding the proposed aim of this measure, which, according to the proposal document is ‘to prevent fraudulent and unnecessary whiplash claims at source.’ At present, I have three queries relating to how the checks will achieve this aim:Firstly, if the pre-claim check reveals 5 previous whiplash claims in the 5 years, what is the lawyer supposed to infer from this? Do we expect them to immediately cry fraud and drop the client? If we are to work on the basis that after X number of claims there should be fraud concerns, what is the ‘acceptable’ number of claims over time to be? In my view such a system would be unworkable.

Secondly, what data will be used to populate the database these checks are to be performed against?

How will such a system operate to catch someone who uses aliases, multiple addresses and vehicles; which is a standard tactic amongst any sophisticated motor fraud ring?

Thirdly, the requirement is only to perform the check.

Once this is done, the lawyer is free to submit the claim regardless of the outcome. Therefore this is likely to become a box ticking exercise in most claims and do little to identify fraud.

Checking a claimant’s previous claims history does nothing other than confirm the number of claims previously made. In any event, both Claimant and Insurance representatives have now agreed to the checks and I don’t think anything further is required. Due to the above concerns, I am not convinced that even this step was required in the first place and consider that the current pre action protocol is adequate.

Alistair Schuberth, Associate Director, Claims Defensibility, Risk Management, Willis Group.

MC // January 2015

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The Opinions

29

Planning ahead...

Too much on the plate...

Managing risk: What would an Ebola outbreak on European soil mean for the claims industry?

Is true innovation in the claims industry failing because companies simply cannot bring their new products and services to market, quickly enough?

F

or the majority of us, the Ebola virus was, until recently, unheard of, as it has centered in West Africa since its first occurrence in 1976. The latest Ebola outbreak in West Africa first appeared in the news in March 2014 and took the world media centre stage. It has become the deadliest and most complex occurrence since its discovery in 1976.

There is an enormous amount of information available on Ebola; but what are we doing to manage this risk? An Ebola outbreak spread across Europe is still very probable, if not unavoidable. To date we have seen one reported case in Spain. The reality is that these occurrences in Europe will happen, because of travel to and from Europe and the affected countries.

An Ebola outbreak on European soil could have a catastrophic impact on the claims industry and we will now consider various types of insurance that will be impacted.

There could be an increase in claims on employer’s liability insurance, if employees contract the disease and if the employer is legally liable and has breached the duty of care owed to an employee. This is subject to the policy terms and conditions, but there are no specific exclusions relating to a particular disease. We can also consider the claims impact on public and product liability insurance, where the insured is deemed legally liable if a third party contracts the disease; again this would be subject to the policy terms and conditions. A valid claim under any policy will depend on the facts of the case.

A further example of a potential increase in claim costs relates to business travel insurance and whether the policy covers Ebola related repatriation costs and medical expenses or potential cancellation of a trip. There are massive costs associated with repatriation and a potential logistical nightmare to move patients due to travel restrictions. Monitoring developments, reviewing policies, educating staff and clients is central to the management of risk. Organisations should be stress testing this scenario, which will have a significant impact on claims if there is an outbreak of Ebola in Europe.

Nicola Klimkowski, Head of Business Control and Development, LAMP Services Limited.

I

nnovation in the claims industry is, arguably, ahead of comparable legal service sectors - simply because of the intense competition and the (seemingly!) constant legislative change.

To imply that innovation is failing is not true - but is there a disconnect between what the marketplace (the customers) want and what can be delivered by claims industry operators?

I think there is often a difficulty in tying together technological offerings into a coherent service package for customers. Some projects (which I have witnessed in the broader market) which seek to introduce ‘apps’, at the same time as back-office improvements, online accessibility enhancements, and so on, are giving firms a hill to climb. Too much ‘on the plate’.

Delivering service-enriching technology to the consumer should indeed be done in as holistic an approach as possible, but needs to be carefully considered. The technologies in place need to tie together effectively to avoid duplication of effort, and the provision of a (for want of a better word!) ‘lumpy’ offering to customers.

So, the planning is important - sketching out the ‘customer journey’ is vital for true innovation to realise its true worth, and for it not to flounder.

• How will our back-office systems collaborate with what the customer sees?

• How will information be shared (and how quickly – ideally, real-time) and how will it be secured so that only relevant information passes to relevant people?

• How will customers interact with our technology - how will it influence their behaviour and how will it impact the journey quality?

In the end, innovations often fail because a) the need for them isn’t there, or b) the implementation is wrong.

Deciding on how to provide an innovative experience for the customer is paramount, and the technology should fit that end. Not the other way around.

Darren Gower, Marketing Director, Eclipse Legal Systems, part of Capita plc.

MC // January 2015

carpenters

The Opinions

Gathering pace...

Is the claims sector still a reactive industry in terms of utilising technology and digital marketing?

T

he claims sector, and in particular, the legal side of the claims industry has always struck me as a real mixture of the old and the new when it comes to its systems and technology.

On one hand, our industry is still very traditional in many ways. Our Advocates north of the border still don wigs and gowns before appearing in court and the tradition of gowns remains in the Sheriff Courts too. Similarly, until very recently, instructions sent to Counsel were still bound in pink ribbon and left in wooden boxes in the halls of the Court of Session.

Within many a legal office has been the talk of “going paperless”, something that never fails to chill those of us who thrive in a mire of paperwork to our very core!

Despite these traditions, technology and digital marketing is all around us and in full swing. The claims industry is one of the most competitive markets online, with billions invested each year in trying to gain a competitive edge. The number of Smartphone Apps from insurers, CMCs and law firms runs into hundreds and (at least in England and Wales), claims are now processed through an online Portal.

Are we as an industry more reactive than proactive to using and developing new technology? I think we probably are.

From my experience, part of that stems from the draconian rule that Scottish solicitors are required to abide to on advertising and marketing. We have a regulator who isn’t all that keen on us trying to attract new business. That makes pro-active marketing and use of technology a bit more tricky.

All of that said though, I think we have some good innovators in this market and the delivery of claims handling/legal services now has some real momentum in terms of the technology widely used in the industry, to both generate new business and to interact with clients throughout the claims process. Now that this momentum has gathered some pace, we will continue to see greater innovation and use of technology throughout the industry.

Scott Whyte, Managing Director, Watermans.

31

Groundbreaking solutions...

Is true innovation in the claims industry failing because companies simply cannot bring their new products and services to market, quickly enough?

T

his rather begs the question as to how much scope there is for innovation in the claims industry, given that it is a sector which is basically reactive: by definition, claims handling is an activity that responds to situations (each one more or less unique) rather than setting out new products in the way, for instance, underwriters do. Those underwriters are forever enhancing their policy wordings and offering new add-ons as part of the underwriting package in order to lure prospective policyholders. Those in the claims sector have always maintained that their role is to “sweep up” behind the underwriters and to respond to claims on a claim-by-claim basis. New Products are therefore not top of a claims manager’s priorities. The other factor of course is cost. Insurers are keen to spend money on the front end (i.e. the underwriting module) but the back end is not so well favoured.

Part of my business provides claims administration services to liability insurers on an outsourced basis, an area which naturally highlights the need for economies in the sheer cost of claims handling and at the same time illustrates the efficiencies that can be made from the use of effective IT systems to assist the claims handler in his or her task.

The key mechanical aids in this area are: (a) a fully reactive, real-time claims administrative system; and (b) comprehensive Management Information collection and analysis. Naturally, the latter is usually only possible as an adjunct to the former.

It is questionable whether any of the above can be classed as “innovation” but I am told, by those who design and provide IT systems to Claims Departments, that in many cases any improvement on a manual spreadsheet is perceived to be ground breaking! Even when there are IT systems in place, many of them are 20 or 30 years old and such legacy systems have to be bundled up into the new system in order to provide a full view of the available data. A start-up situation gives greater flexibility and so new, smaller insurers and specialist MGAs have a huge advantage here and have no excuse for not acquiring highly resilient and effective software.

David Simon, Chairman, Triton Global Limited.

MC // January 2015

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The Opinions

Investing in the future...

As technology continues to drive change in the claims market, are areas of the sector (such as underwriting), at risk of being phased out in favour of automated processes?

T

he technological developments we have seen in recent years are truly exciting, and enough to inspire imaginings for what the future will bring: assessing risk with pin-point accuracy in order to set profitable premiums, cut losses dramatically and eradicate fraud; insurance claims managed electronically, with instant decisions, no longer relying on individuals spending many long hours pulling together all the relevant details before making a decision (with potential for human error, of course).

However, when reality is allowed back in, we realise that whilst technology is a fantastic resource, it should be used to enhance rather than replace the infrastructure in which insurers have invested heavily to date. In reality, technology and the automation of processes, backed by in depth, accurate, supportive data, is providing insurers with a more cognitive approach when dealing with claims, where the aim is straight through processing for the 80%+.

These advancements and the ability to ‘power up’ can also be applied when it comes to assessing the underwriting risk against its potential loss - complementing existing investments in underwriting. Richer data sources can influence how insurers underwrite specific risks based on a whole lifecycle of information. By drilling right down to crash avoidance safety features for vehicles in particular, spec based vehicle valuation and risk profiles influenced by the type of car finance, are all valuable facets when assessing risk.

Blending this information together offers insurers real heavy weight insight, which can positively influence the way they underwrite and value the risk.

Audatex and related Solera UK businesses combined have created a Risk & Asset Management Platform with access to a unique volume and profile of data which proves invaluable in insurance decision-making. For example: accident history by type of vehicle, normalised repair costs for a particular vehicle with a given severity of damage, vehicle valuation, or risk assessment factors. In fact, there is no other one source able to provide such a wealth of comprehensive vehicle specific data, given simply the registration plate.

It is impossible to make an accurate judgment regarding risk without the use of high quality data, and the more relevant information available, the more accurate the assessment will be.

It is clear that the future of claims from marketing and underwriting through to processing will lean increasingly on a wealth and breadth of data to support automation of process, improvements in accuracy and software assisted decision support when dealing with exceptions.

33

Fad or fact?

A

s Claims professionals we are all aware that success does not happen overnight but failure often does. Critical moments will always happen in business life but how effective our efforts are to control negative situations is what matters most. It is a sobering thought that get it wrong and 30 years of hard work can be destroyed in 30 seconds!

Fad or fact, Reputation management, as a concept, has been gaining momentum with a more sophisticated approach and focus. As a good reputation is clearly a terrible thing to lose, both professionally and financially, it is clearly sensible to weave Reputation management into long-term business strategy and planning processes. So what do we need to consider?

1. It is impossible to protect Reputation without first defining what it is. Take time to find out the reputation of your organisation, both internally and externally and establish what the value of that reputation is to your business.

2. Create a Pre Crisis Reputation Management Plan.

Unlike traditional Crisis management, Reputation Management, as an ongoing strategy, can arguably create a “halo effect”, giving a degree of protection when crisis strikes. Identifying issues, risks and vulnerabilities are key components of crisis planning capable of being addressed outside of a crisis for impact reduction.

Organisations with a favourable prior reputation are likely to benefit most from the halo effect.

3. Proactively implement ongoing “Reputation focused”, work streams. In today’s world we need to understand and respond rapidly to shifting public values and rising Client/Consumer expectation. Advances in technology have rendered our reputations as Claims and Legal professionals more vulnerable to criticism, which has a habit of going global! Robust PR management, communication planning, complaint handling and customer satisfaction measurement all help strengthen the shield effect. Remember your Reputation is for life not just for crisis!

4. Develop a crisis management road map. This should be consistent and well communicated, incorporating decision making guidelines for all levels of the organisation and a well practised PR communications plan, to limit any Media damage.

In true Boy Scout style, be “Corporate Prepared”.

A high degree of advanced planning woven into the fabric of your strategic and planning processes should instil confidence in stakeholders and protect Brand and Reputation should crisis strike.

Janet Tilley, Managing Partner, Colemans-ctts Solicitors.

Paul Sykes, Managing Director, Audatex (UK) Ltd.

MC // January 2015

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The Opinions

The road to prosperity...

Is the claims sector still a reactive industry in terms of utilising technology and digital marketing?

A

s many of us are fully aware, the market place and legal industry has changed dramatically in the past few years and in general, technology use in the modern world has moved on and evolved at a rapid rate.

Changes brought upon us in our given sector have ultimately meant those who want to not only survive but thrive have had to adapt and evolve and a major part of this has and must be investment into technology and the use of the same.

The market place is as competitive and so you must be proactive in order to get ahead of your peers and build your business. Most people now heavily rely and also constantly utilise technology and social media and as such, those successful firms have embraced change and geared their business and marketing models towards social media, digital marketing and online presence.

In the past you could potentially run a reactive business and still turn a profit but obviously never be that market leader, now however everyone must push to be a proactive firm, which comes up with the new ideas and ways of integrating new technology into their working model.

Within Ultimate Costs and also talking with our clients, we always look to innovate and look at ways that make technology work for us to improve efficiency and profitably, whilst not allowing levels of customer service to drop. We need to look at how our potential clients go about their daily habits and how they would find you as opposed to someone else if they needed your assistance. It is important to engage with them, which at present social media and online are excellent facilitators of, along with other tried and tested methods.

We now live and work in a sector whereby margins are much tighter and you potentially need to put even more effort into your resources to bring that work into your business. Major factors and tools available are the use of technology and not waiting for an issue or problems to arise but to pre-empt them and look for ways to avoid or deal head on and thereafter adapt.

Its tough out there but those willing to embrace technology and be proactive in their approach are the ones who will ultimately prosper.

Andrew Chadwick, Costs Manager, Ultimate Costs.

35

Credit Hire Statement of Consumer Rights – why don’t we all work together?

S

o the dust finally appears to be settling on the ill-fated CMA report and ‘business as usual’ is resuming between insurers and CHCs. To be fair the day-to-day interaction between many CHCs and insurers is constructive, despite what the ABI or insurance press might sometimes suggest. While reform of the GTA and the adoption of more protocols is likely to govern the ongoing relationship between companies, we shouldn’t lose sight of the fact that in the middle of all of this is a poor customer who has had an accident!

Now, as seasoned insurance professionals, we have a pretty good idea what should and could happen and the ins and outs of 20 years of case law (well maybe not every one!). However, a consumer having an accident once every seven years is unlikely to be so well prepared.

It makes good sense therefore, that whoever takes the first notification of loss, should clearly and succinctly explain these rights to the customer. Perhaps one of the few positives of the CMA process was that insurers and CHCs had a productive dialogue on this matter during the possible remedies discussions and the CHO have recently published a document, which could relatively quickly be put into place as a joint document. Agreeing such a document that is not biased and simply informs the customer what they are entitled to in law is hard to argue against.

Surely, this would help insurers build and strengthen the claims experience for their customers? While explaining their rights to a consumer may take slightly longer to do, surely a little bit more time spent up front will lead to a better customer journey and avoid unnecessary or unsolicited calls further down the line. If a consumer is not clear what their rights are, a void exists for third parties to step in and look to provide a service that may not be in their or the insurers best interests.

So let’s agree on a 2015 New Year’s resolution – let’s all start putting the customer first. The claims process should be as straight forward and easy to understand as possible and getting a replacement vehicle should not be a battle but a service.

Derek Cooper, Managing Director, [Veracity] Claims Solutions.

MC // January 2015

The Opinions

Is a CPR-35 compliant forensic report necessary to repudiate the majority of claims?

D

uring these current times of global recession and harsh cutbacks you would think that most insurers and legal service providers would, by now, be working as efficiently as possible. If that is the case, why do we still see cases every day that are forensically inconsistent with the given circumstances, and yet, have accrued months if not years of work and associated costs before they finally get assessed by a qualified forensic professional?

After many conversations with all and sundry in the industry, I have come to the conclusion that it is solely due to the usual business cultural endemic RTA wash-up process and nothing to do with science or best practice! Call me radical, but if the forensic evidence unequivocally shows that the circumstances of either party are wholly correct or incorrect, surely this intelligence should be prioritised first and foremost as the primary indicator of success, and whether the case should go to litigation?

Why waste funds on other subject matter experts and/or CPR-35 compliant reports when there is an obvious, quicker and cheaper route to the settlement of a case in the form of a Without Prejudice (WOP) Forensic Advice Note.

If a qualified forensic professional quite simply conveyed the executive summary from what the CPR-35 compliant report would say (if it was requested) into a WOP forensic advice note, it would unambiguously show all involved your trump forensic card and your clear intention from inception, as well as acting as a true catalyst for an early conclusion.

The overwhelming majority of virtual desktop analysis casework sees clients seeking qualified opinion on two top topics: • Damage consistency • Occupant movement from an alleged low velocity impact (LVI).

Providing there is good quality imagery of the vehicles involved and the differing versions of events, there is no reason why forensic service providers should not provide a same day turnaround package for a WOP forensic advice note commenting on the above topic areas.

37

Life in the fast lane...

As technology continues to drive change in the claims market, are areas of the sector (such as underwriting), at risk of being phased out in favour of automated processes?

B

usinesses are constantly looking for ways to streamline their processes and reduce their costs.

This has led and will continue to lead to robotic replacement of workforces. Machines are more efficient, less erroneous and all round better and cheaper than man at performing certain tasks.

At the same time, technology such as the Smartphone, means we expect to be able to obtain information instantly at any time, whether that be our bank balance, the name of that actor in that programme, or a comparison of insurance quotes. Industries are adapting their services to more online and app based to streamline their processes as well as cope with our desire for 24 hour, instant information. There are however still consumers who have a distrust for technology and the motives behind it or simply those who want a service and to deal with real people. For as long as these customers are in existence they are considered customers worth keeping.

I compare it to grocery shopping. I have no loyalty to any supermarket; I go to whichever is most convenient at the time. List on phone, I do not wander. I opt for self service.

The quicker I get out of there the better. My parents will go to the same supermarket every Saturday for the whole morning. They will start with a coffee in the café then wander down every single aisle picking up what they think they need and anything extra that they fancy. They will queue at the checkout chatting to the assistant and picking up some ‘special offer’ chocolate at the counter.

There are no self service checkouts where they go. They refuse to use self service, my dad’s response being: “You’ll be asking me to stack my own shelves next”.

This customer is paying for a service. If the service is good they are loyal to the provider. They use a broker for their business, motor, property and any other insurance they have. Although they won’t be ripped off, if their insurance premiums increase they are likely to stay where they are because they have a contact who looks after them, they haven’t had any issues and they are not interested in doing it themselves.

This low cost and rapid virtual product lends itself very well to the mediation route for case settlement, and has proven time and time again to significantly shorten the claimant’s or defendant’s respective post-incident resolution process. Could the WOP forensic advice note coupled to mediation be the best route forward for the bulk of case settlements from now on?

Some believe that insurance lags behind other industries when it comes to technology. I think that for as long as the loyal customer is around it will limit how far insurers go in 100% automating their processes. Companies won’t want to be the first to introduce 100% self service, however it may be that the time for the loyal customer is limited and after that, companies failing to keep up with the fast lane will be left behind.

Paul Hughes MSc MBA FCIL RAF, CEO, pH interim Ltd.

Emma Holcroft, Director, 2020 Investigations.

MC // January 2015

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The Opinions

39

Moving in the right direction...

Ignore the march of technology at your peril

How can/should the claims sector be working to improve transparency, communication, clarity and policy wordings, for the benefit of consumers and the rest of the industry?

Is the claims sector still a reactive industry in terms of utilising technology and digital marketing?

T

ransparency is key in today’s consumer savvy world and is becoming an increasingly high profile issue in the claims sector. Dictionaries offer many definitions for the word, but those synonyms relevant to the claims sector are: “easily understood”, “very clear”, “frank” and “candid”.

Less information means less certainty for consumers and a lack of transparency can lead to suspicion and nasty surprises to come. Thankfully, there are signs that the claims sector is moving in the right direction. In July last year, the ABI wrote to the Financial Conduct Authority (FCA), urging it to ensure that when customers are offered renewal quotes, the document includes the previous year’s price for ease of comparison. The proposal would affect private motor and home insurance documentation and, according to the trade body, would improve clarity for customers.

In addition, the ABI has called for policy documents for new customers to make clear that any introductory discounts applied might not continue when the policy is due for renewal. The association commissioned a survey of over 2,500 adults through YouGov as part of its research. It found that 89% of respondents that had received an insurance renewal before, said they would find it helpful to have the previous years’ price printed on their insurance renewal.

The impact of mid-term adjustments would not feature in the new information packs, as the ABI said it believed yearstart figure comparisons would be the easiest understood comparison. The trade body has committed to discussing its proposals with the regulator, with the ambition of ensuring implementation by December this year. While this is one example of how transparency could be improved, I would urge the whole claims sector to be innovative in developing solutions that will benefit consumers.

Hilary Meredith, CEO, Hilary Meredith Solicitors Limited.

L

argely, yes. But that’s not to say that all law firms are guilty! The legal sector is much more accepting of digital marketing and new technologies than it was two years ago, but it still has a long way to go.

Digital marketing agencies recognise this, and some have gone as far as to specialise in providing for the legal sector because there’s simply so much work to be done, and thus, plenty of business to be had.

This has had a positive effect – for the most part, agencies have not only done a good job, but they’ve taken their time to educate clients. We were fortunate enough to know someone in the digital marketing sector, and we recognised early on that there was an advantage to be had by implementing digital campaigns before everyone else. Thankfully they worked; year-on-year we’ve seen a 50% increase in online enquiry growth, to the point where organic online channels generate enough work to eliminate the need for Out of Home advertising.

These digital channels are now a mainstay in our business development arsenal. Yet there are some firms that feel that they’re either too small, or can’t afford to take advantage of the opportunity. Yet I guarantee there’s an agency out there that would give their left arm to look after them.

The same applies to technology in general. There are many law firms out there that still rely on paper files – where I see filing cabinets, I picture fee earners accumulating billable hours. Case Management software has been around for a long time now, and there’s still this stubborn resilience to change. We’ve been paperless for five years now, and I can’t say often enough that it’s one of the best decisions we’ve ever made.

Ignore the march of technology at your peril – those that adapt will survive and prosper. Those that don’t, could well go the way of the dinosaur…

Kamran Akram, Principal, Asons Solicitors.

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The right candidate will have experience handling UK and worldwide high value general liability, product, construction and personal injury claims and have the capability to work independently and with in a fast paced team environment.

The role will involve working very closely with senior management and underwriters.

As such, you need to be confident and personable, have or be able to develop a strong network of contacts and be willing to go out to the market representing the company when necessary. Please quote reference: MC0101 when applying for this role.

Technical Claims Adjuster

£22-30,000 Basic, London

A Lloyd’s Managing Agent is looking to expand their Claims function by adding a Technical Handler to their division. The right candidate will have a primary background in claims and administration and experience dealing with line management.

Responsibilities of this role will include; ECF administration including diary management & administration for the claims team members, working across the Lloyd’s and London platforms, ad hoc administration tasks, and processing claims outsourced to the Technical Team within service levels and authority. The right candidate will be hard working, understand the claims handling process and be well accustomed to London market claims systems. Please quote reference MC0102 when applying for this role.

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A well respected Lloyd’s Syndicate and Company Market Insurer are recruiting for a Marine Claims Adjuster to join their offices based in the City of London.

The Marine department is experiencing a lot of growth and are therefore needing a qualified individual to help take over a large volume of UK and global claims. The role will involve handling Hull and Machinery, Cargo, Liability and XL Treaty Claims written through their Syndicate and Company platforms.

This is a great opportunity to be a part of a team that has global reach and an innovative approach to claims handling as well as the rare opportunity to gain cross platform exposure. Please quote reference MC0103 when applying for this role.

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Modern Claims Magazine.indd 1

22/01/2015 16:05:24

The Opinions

M&A Activity

T

here has been anticipated M&A activity in the legal sector for a number of years, but in 2014 there has been a tangible increase. LASPO has most likely delayed activity while stakeholders, present and prospective, have waited to see what the longterm ramifications would be. As with any change, where there is risk there is also opportunity. Although there have been a number of high profile failures in the sector, there has not been a catastrophic decline either. As such the opportunists are now looking to exploit the market changes and go for growth.

Those firms that have adapted best to the changes can now see that well run caseloads can still deliver returns, and that commercially savvy firms have the opportunity to invest, be it in their own marketing or through acquisition.

Zebra LC has seen a marked increase in enquires from potential investors bringing new money to the legal sector, especially in the PI/ID/Clinical Negligence sectors. These investors are looking for the right opportunities to invest in while also wishing to avoid any bear traps that may arise from target firms that may have embarked on ill-advised ventures into non-core work, such as a move from RTA to Clinical Negligence, without investment in the skilled staff to run these specialised caseloads.

As well as new investors, banks are also looking to their client base for those who are in a position to take on more working capital and grow, with firm to firm acquisitions.

Firms demonstrating growth and financial stability, despite economic and statutory turbulence and especially if they continue to do so some 18 months after LASPO, give confidence to lenders.

Zoe Holland, Managing Director, Zebra Legal Consulting.

41

The competitive advantage...

Is the claims sector still a reactive industry in terms of utilising technology and digital marketing?

C

ompass frequently comes into contact with the technology deployed by instructing agents, generally case and document management systems. Even something that looks simple on the face of it can quickly nose-dive into trouble. Imagine a claim where everyone has breathed a sigh of relief as liability has been agreed, then a web of issues relating to damages for loss of earnings spins out, stalling a cost-effective settlement. Even where an organisation has been able to de-skill expensive legal staff away from purely administrative tasks, like routine correspondence, by using a case management system, at this point it is essential that someone with the requisite legal skills and experience gets involved - that’s where costs start to accelerate.

That’s why we are participating in the final testing of a new system that focuses on the resolution of evidence and issues, allowing users to manage legal thought processes much more efficiently than before. This application (MISO - engineered by Ulpian Systems) is unique in that it has developed from software built by a UK PI litigator for their own use.

There may be a preconception of the role of the bar in the claims process, namely that we are one step removed, however, Compass is focused on continuous improvement of our service to our clients. This is why we want to ensure that we are ahead of the pack when it comes to implementation, as well as helping to influence the shape and form of the system to allow us to work even more efficiently.

As the environment is designed around the capability for stakeholders from insurers through to counsel to be genuinely and collaboratively involved in litigation, it gives us the opportunity to be in the driving seat, using the system itself to raise the profile of Compass Chambers and its members by being a leader of innovation not just an adopter.

So, whilst the software delivers its own benefits by allowing lawyers to deliver legal analysis more efficiently, it also provides us with a platform to cement relationships within the industry. So far, the adoption model for Legal technology has tended to be reactive - firms waited to see how each other fared before investing in specific technologies. We have decided to be proactive to ensure that our members gain a competitive advantage.

Peter Milligan, Advocate, Compass Chambers.

MC // January 2015

The Opinions

Taking the lead...

Do insurers/brokers effectively utilise customer feedback and are they really doing enough to maximise customer satisfaction?

I

t seems that many businesses are looking at how prospective clients are making choices these days. Most businesses have websites, which offer a vast arrangement of services and promises, but not every client is wowed by flashy websites, also they are now searching for some sort of reassurance.

Over the years, there has been a huge increase in websites and new businesses, but with this there has been growing reports of fraud. With an increase in online fraud, prospective clients are more sceptical on whom they engage with in business, where they purchase from, but more importantly they are being advised to research fully and request previous client recommendations. So it would seem that businesses have started to understand the importance of customer feedback and also how powerful this can be, not just for prospective clients, but for a business’ reputation!

The commitment in this area from the insurance industry however, does not seem as full as it should be, so does this mean that some companies are being dragged into to an area they do not feel comfortable with, think that it is a passing fad that they do not need to concern themselves with, or perhaps they do not understand fully?

Many insurers, who appear to have understood the value and power of their previous client’s testimonials, have made a start on collecting feedback and placing these on their websites. This is at least a start, but for the prospective client, they may be asking, “How do we know they are genuine?” Also, “Are these cherry picked?”

The way forward will be for the industry to offer clients a third party verification route. The first in the insurance industry to place their heads above the parapet and offer clients transparency, via a third party, especially by one who is well known and themselves respected, will very quickly be rewarded with clients who respect them, their service and their product. They will also gain a new found trust, as they utilise and act on this vital information they are so desperately seeking.

43

Up for debate...

A

t the time of writing, the SARAH bill has passed another hurdle and proceeds to the 3rd stage in the Lords. This piece of draft legislation already includes the known overlaps with the 2006 Compensation Act. When you add on the Criminal Justice and Courts Bill that is expected to receive Royal Assent shortly, the once largely operational differences between our Legal jurisdictions regarding PI claims, are very quickly morphing into something much more discernible and fundamental.

This may, at the very least, present some unwelcome points of fracture for our eminent Judges in the Supreme Court deciding on Appellate matters from Northern Ireland (NI). How difficult or indeed worthwhile will it be in the future for an Appellate Judge in England, presiding over what once was for example, a simple allegation of contributory negligence in an NI case with a plaintiff guilty of nothing more than ‘gilding the lily’. In England, under Clause 49(1)b of the Criminal Justice and Courts Act, could result in the dismissal of the whole of the claim with all of the resulting collateral damage regarding cost orders and BTE/ATE insurance.

For the rest of us, the totalities of the probable changes represent further explanation, if such was ever required, as to why it’s vital that only lawyers within the correct jurisdiction should deal with PI claims. In this regard, it is very pleasing to report from an NI perspective, that all of the probable legislation mentioned above will not be applicable and is very likely to remain the settled position for the foreseeable future. When looked at in the bigger context of the post Jackson reforms and LASPO, which again have no application to NI, it’s now certainly arguable to moot, that the once persuasive, sometimes binding nature of English case law, should be consigned to the past and we should let the historians debate the finer points.

Gerry Lee, Senior Partner, PR Hanna Solicitors, Belfast.

If you are serious about standing out and offering prospective client’s reassurance, offer good service, good products then transparency. Change is always challenging, but clients very quickly see the change for the better and also applaud those who take the lead to provide them with reassurance.

Lisa Beale, Head of Checkaprofessional.com

MC // January 2015

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The Opinions

What is the real value of social media?

N

early two billion people use social media and evidence shows over the years that engagement can convert to sales. So, just how important is it to use social media for your business? It can be time consuming, but is it worth it? Absolutely.

The key is to prioritise your activity; select the social media platform most conducive to your needs and weigh up what it is you are trying to achieve.

Whether it be building your brand awareness, establishing yourself as a market expert, opening up communication between you and your consumers or making your company more accessible, there is more than likely a social media platform at your fingertips.

Social media opens up a new and easy way to learn about your audience. With statistics at your disposal, this information can be used to target your market and expand it. Building relationships is arguably the back bone of any business and creating dialogue with your target market can help manage your online reputation and get your content out there faster.

It doesn’t need to be costly; assess the cost of your time. A small budget can allow you to test audience response and new areas you might want to target. Ask yourself if you and your staff have the time and knowledge to spend on social media or would it be more cost effective to outsource?

There was a time when having a website was enough to get noticed online, but with continual online developments, this is no longer the case. If used effectively, social media can actually help increase your search engine ranking and traffic to your website. But, don’t expect results over night.

This marketing activity is about exposure and may not initially generate business for your company. However, keep in mind that social media is becoming more of a necessity in business and with a clearly defined identity and a solid marketing strategy; it is a great way of boosting your business both economically and online.

The bottom line is social media will continue to grow and cement itself firmly into the future as the new ‘normal’. Use it to spread the word, engage in conversations, educate your audience and promote your services, products or company. The affect it can have on your business can be colossal, just ensure you invest the time in monitoring trends, finding opportunities for growth and creating advocates for your brand.

45

Assessing the options...

F

ailing to advise your client of all funding options available to them at the outset of a claim means not only running the risk of breaching SRA code of conduct (July 2014 version), but also potentially disparaging negligence claims against your firm. Alternatively, you could choose to self-insure the claim, which brings inherent financial risk to the Firm.

Do you consider the prospect of discussing After the Event Insurance (ATE) with your client as difficult? Not least because you are making deductions already from their damages and any additional costs may result in you losing the competitive edge. Or is it the perception that the clients costs risk post-LASPO is minimal and can be absorbed by the Firm?

Self-insuring a claim can severely hinder the progression of a client’s case to the risk of under settlement or loss.

Trying to obtain ATE at a later stage is unlikely and if possible, can have a significant or even cost negative effect on the client’s award. Similarly, choosing to absorb the increased cost exposure at the various points in the litigation process, can have an adverse and unnecessary effect on the Firms balance sheet.

Along with the Firm’s increased exposure to costs, there is also a professional negligence exposure which is difficult to quantify financially. Claims against the Firm for negligence may be small and dealt with within the firms Professional Indemnity Insurance (PII) excess or a one off large claim. All have to be notified to Insurers under the policy terms and will result in difficult questions at renewal along with a significant increase in the premium.

The risks associated with not offering ATE at the outset are not immediately obvious but never the less those risks can undoubtedly affect your firm’s reputation, operational processes and financial position. When all is considered, discussing the clients funding options and insisting that an ATE policy is taken out unless alternatives are available is a sound risk management decision for the Firm.

Martin Doyle, Director, Amberis ATE.

Charles Cox, CEO of TLMG Limited.

MC // January 2015

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The Opinions

47-62

The Features

47

What is the best way to provide protection that is both unique & attractive, yet solid & reliable?

Bespoke insurance solutions for after the event Modern Claims Magazine ad.indd 1

www.amberis-ate.com 11/12/2014 14:59

The Features

49

A match made in heaven?

Research from an OFCOM report released in late 2014 under the headlinegrabbing stat that the average UK adult now spends more time using media/ communications than they do sleeping, tells us in the claims industry that mobile is a medium that cannot be ignored. Sucheet Amin reports. instruct us and leave us to get on with the job. Consumers now crave information and knowledge about anything and everything and it is readily available within seconds. In our sector, forums and blogs have fuelled information hungry consumers. The consequence is that our clients demand an “experience” with high expectations. The challenge is balancing that with profit margins which are particularly tight in the post-Jackson era.

“The Communications Market Report: United Kingdom – Techie teens are shaping how we communicate” (go to http://tinyurl. com/m5l8hgh for the full report) revealed some market intelligence that are worth taking a few moments to digest: • 88% of 16-24 year olds own a smartphone • Young adults (16-24 year olds) are glued to their smartphones for 3 hours 36 minutes each day – the average UK adults spends 1 hour 22 minutes daily on their smartphone • 61% of UK adults own a smartphone in comparison to 51% in 2013 • 28% of those over 55 now own a tablet and use it as their main computing device • 6 year olds have the same understanding of communications technology as 45 year olds.

The internet is awash with reports saying that mobile search will overtake desktop in 2015. With Google being the leader in search saying the same, this prediction is guaranteed to become a reality. The facts are clear that any business which doesn’t have a mobile adaptive/responsive website in the least is going to struggle for any share of voice online.

Attracting the consumer Consumers will use the internet and websites to educate themselves before purchasing, or in the claims sector, submitting an enquiry. At that point, the website becomes all but useless. Let’s be honest, websites are the shop window of your business – you put together a nice display to get the consumer to walk in the front door. From there, it is down to your staff on the shop floor to do the rest.

The difference with the claims sector is that this is not a “single moment” experience. This is going to be a relationship that will last months, maybe even years. So, the consumer is really focussed on how the relationship will develop and amongst other issues. In the “good old days”, the majority of our clients would

The answer? Apps The claims sector has been well ahead of other legal sectors when it comes to embracing technology and it has helped drive systems and efficiencies for years. And whilst many other areas are only just getting to grips with the advantages of a well-managed case management system, the claims sector is looking for the next advancement.

Mobile app consumers typically have a specific app for a single objective. For games it is escapism; for social media is sharing; for news it is current affairs; and for their claim it is updates.

Apps are not very effective as a marketing tool for law firms – if the consumer has no specific need for the service being offered they won’t download it and let it take up space on their smartphone. On the other hand, if the consumer is engaged with a product or service then a well presented app focusing on user experience will make a real difference to that person’s “experience” and significantly enhance the relationship.

Communication of the future In the claims sector, a mobile app can do more than simply enhance the clients “experience”. Managing the user experience from the outset can result in clear and fast instructions and a well-educated client about the process as a whole. With an app a client can check the status of their claim 24/7; give instructions on the train to work; be alerted to take some action by “notifications” and a whole lot more.

The distinct advantage of mobile apps over other forms of communication such as email is the use of “push technology”. “Push” allows the sender to notify the receiver of an alert or message and inserts a thought in the mind of the recipient to view it and take action.

With an ever-increasing percentage of clients using Smartphones, firms need to seriously consider how they are going to integrate mobile app technology into their service offering. Otherwise they risk falling behind the rest of the pack as consumers choose a firm with a mobile app to manage their claims more efficiently.

Sucheet Amin - Personal injury solicitor and Founder of inCase™ mobile apps.

MC // January 2015

50

The Features

The road ahead Autonomous vehicles (AVs) are on their way and the first mass-production versions could arrive within the next ten years. Paul Hollick explains why this may mean significant change for the insurance industry.

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lready many features of AVs are to be found on cars today; ranging from auto brake to adaptive cruise control, lane assist to park assist and city safety. So, if you drive a quality, high specification car, you may already be enjoying some of the key components that will make up a future AV. Why do we need AVs? Two principal drivers have encouraged their development. The first relates to road safety. Worldwide, there are 1.2m road deaths annually, equating to a death every 25 seconds. While road deaths in the UK are dropping – in 2013 1,713 people were killed in reported road traffic accidents, representing the lowest number of fatalities since national records began in 1926, but, one road death is one death too many.

And, as it is an accepted fact that 95 per cent of road accidents are caused by human error, the requirement for more advanced active safety aids that eliminate the opportunity for human error will only increase.

Secondly, where and how we live is changing. For the very first time in history, in 2008, over half the world’s population lived in towns and cities and by 2040, two-thirds of inhabitants will live in an urban environment. In the UK, nine out of ten people already live in an urban environment and to get around towns and cities is becoming ever more challenging with the rise in road congestion. AVs will be part of the future urban transportation

solution, as they could serve urban dwellers with just a third of the current number of vehicles.

Reaping the benefits...

With AVs about to loom over the horizon in the next decade, the Institute of Car Fleet Management (ICFM), hosted an interesting debate on the subject of ‘Autonomous vehicles – their future impact on legislation and fleet policy’ at its recent Annual National Members’ Conference.

In a lively expert panel session, Gerry Keaney, Chief Executive of the British Vehicle Rental & Leasing Association, made the point that technology starts in the high end product: “The more experience we have in it, the more trust we have. Most of the autonomous vehicle technology is here now; the challenge is to get it in more cars.”

This prompted a debate on the merits of government incentivising car buyers to specify advanced safety aids like auto brake, lane assist and adaptive cruise control on new car orders. The consensus was that the savings in terms of reduced road traffic accidents, lower road deaths and serious injuries, less congestion and freer flowing traffic would more than offset the cost of the required grants, given road accidents currently cost UK plc more than £30bn a year.

One of the biggest hold ups will be the required changes to legislation as current legislation around the world

covers driven motor-propelled vehicles not driverless vehicles. Already certain States in the USA are adapting their legislation to accommodate driverless AV trials. Also, quite obviously, the DVLA will have to look at the format for a new driving test.

An inevitable step Dr Nick Reed DPhil (Oxon) CPsychol, Principal Human Factors Researcher, TRL Senior Academy Fellow, inevitably had some authoritative comments to make on AVs observing that “How

‘With so much AV technology available on our roads today, greater connectivity and the macro economic trends of increased urbanisation and rental superseding ownership, the advent of the production AV is inevitable’ MC // January 2015

The Features

51

we drive cars in the next 20 years will change more than the way we have done in the past 80 years.”

He also noted that while a basic level of functionality will be required on AVs, connectivity will be essential, vehicle to vehicle, and vehicle to roadside.

And with regard to AV insurance claims, when the technology fails, he underlined that there will be an audit trail from the on-board and roadside data. This will have repercussions for the insurance industry. Insurance will inevitably move away from vehicle insurance to product liability insurance.

Keynote speaker Hugh Dickerson, senior industry head automotive at Google, whose autonomous vehicle testing programme has seen its test cars cover over 700,000 accident-free miles, remarked that, in terms of technology, “today is the slowest day for the rest of our lives.” All the major vehicle manufacturers have been running AV programmes for years and, with so

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much AV technology available on our roads today, greater connectivity and the macro economic trends of increased urbanisation and rental superseding ownership, the advent of the production AV is inevitable. For the insurance industry, there may be also a radical step

change from vehicle insurance as we know it today towards product liability insurance. Watch the road ahead!

Paul Hollick, Chairman, Institute of Car Fleet Management (ICFM). www.icfm.com

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52

Legal Opinion

Legal Opinion Modern Claims’ resident legal experts discuss the latest news and updates for the claims sector. Alan Nesbit and Donna Scully ask whether the Pre-Action Protocol adequately ensures claimant representatives undertake a ‘previous claims’ data search prior to accepting new claims and question whether more needs to be done in this regard. Finally, David Spencer looks at New Year’s Legislation in the form of the Criminal Justice and Courts Bill (The Bill), in which Clause 56 mandates the dismissal of an entire personal injury claim if the claimant is found to have been “fundamentally dishonest,” and asks what this will mean for the sector.

Muddying the waters...

Does the Pre-Action Protocol adequately ensure claimant representatives undertake a ‘previous claims’ data search prior to accepting new claims, or should further amendments be made?

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he proposed amendments to paragraphs 5.10 and 6.3A of the Pre-Action Protocol will require solicitors to undertake ‘previous claims’ checks on potential claimants and to confirm to the defendant that this has been done. This measure will implement a cross-industry data sharing agreement between representatives of the insurance industry and claimant lawyer groups.

If a claimant does not comply with this requirement, they will be given a second opportunity to complete the check and to prove that they have done so. They will however face costs sanctions if they do not then comply with this requirement and proceed, successfully, with a claim.

The government states that this will help tackle fraudulent claims at source, and will mean the lawyer will have better information to test a potential claimant’s account before they decide whether to take on their claim. However, it is important to note that previous claims are not in themselves evidence of fraud or a bar to the claim being taken on. Such data will also help identify information useful to the medical expert relating to possible underlying conditions or previous injuries which could affect the value of a genuine claim.

Whereas I do believe that this is sufficient to ensure that the checks will happen, I remain entirely unconvinced as to how much fraud this will actually stop. As I understand it we will simply be told the number of accidents and when MC // January 2015

they occurred, but this is only reported accidents and may well include accidents that are not of a road traffic nature.

All this will do is serve to muddy the waters and may even lead to significant numbers of genuine claimants unable to find adequate representation, if the accident profile that is discovered is deemed to provide too high a risk profile for the law firm concerned. Far more information is realistically required, including the type of accident and details of either the compensator or Claimant solicitor, so finding out whether the claim was repudiated for example. This is far more likely to cut down fraud. Unfortunately, until the barriers of trust between the parties are properly lowered, rather than the MOJ simply telling the ABI to get this done, that will not happen.

Alan Nesbit, Managing Partner, Nesbit Law Group LLP.

Legal Opinion

New Year’s Legislation

T

he first quarter of 2015 will see the enactment of the Criminal Justice and Courts Bill (The Bill), in which Clause 56 mandates the dismissal of an entire personal injury claim if the claimant is found to have been “fundamentally dishonest,” unless there is “substantial injustice” to that claimant in striking out the claim.

The Bill is the latest stage of an evolution in the response to fraudulent claims since the Supreme Court considered the issue in Fairclough Homes v Summers in 2012. Since concluding that litigation, BLM has sought to keep the topic of third party claims fraud at the top of the MoJ’s agenda, as well engaging the Law Commission and the Transport Select Committee on the issue.

Some suggest reference to “fundamentally” and “substantial” are superfluous, pointing to similar legislation in the Republic of Ireland, which has operated successfully for a decade without those criteria. Others say the definition of dishonesty needs to be more precise, perhaps ignoring identical language that exists with reference to the removal of QOCS protection.

Despite those observations, there appears to be consensus on all sides of the claims process that fraud is something that (still) needs to be deterred, prevented and if found, dealt with appropriately.

There have been cries that the provision will be a stick used to beat every claimant but it is highly unlikely that the introduction of legislation will suddenly cause a shift in defendants’ strategy. The frailty of human recollection means that “honest” mistakes are sometimes made and a plea of “fundamentally dishonest” behaviour will not be made if it cannot be properly evidenced. The legislation is meant to address claims where the issues go to the heart of the claim, and which make the unravelling of truth from lies impossible.

The boundaries of what will be determined as “fundamentally dishonest” will inevitably be tested before and set by the judiciary, in what will likely be their own evolution from dealing with fraud, contempt and QOCS protection.

We can hope that the deterrent effect of this new legislation, underscored by comprehensive advice to claimants from their representatives to be honest in their claim, will limit the occasions defendants need to consider making an application under this new legislation.

David Spencer, Partner, BLM.

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Collaborative and constructive...

Does the pre-action protocol ensure claimant’s representatives undertake a “previous claims data search” prior to accepting new claims? Should further amendments be made?

T

he MOJ, on the 2nd December 2014, published its response to the Consultation on independence in medical reporting and expert accreditation, including proposals for data sharing between Claimants Solicitors and Defendants Insurers.

A proposed paragraph 6.3A of the Pre-Action Protocol will introduce a mandatory requirement for Claimants representatives to make a search of the ask CUEPI Website for details of any accident claims brought by the Claimant in the previous 5 years prior to submission of the CNF. The change is expected to come into force early next year.

The majority of respondents to the MOJ consultation (54%), share our view that the proposed paragraph 6.3A is sufficient. Quite apart from the obvious benefit in assessing/ vetting Claimants from the outset, the potential cost implications of failing to adhere to Rule 6.3A, as provided for in the amendment to Part 45.24(2A) CPR, should adequately ensure that Claimants Representatives do undertake previous claims searches, prior to submission of the CNF. Whilst the search will be helpful to Claimants’ Representatives in evaluating the Claimant’s claim at an early stage, clearly the number of previous claims in the past 5 years is not in itself indicative of fraud. It is however, an indicator that further investigations/enquiries may be required if a client tells you they have had no previous accidents when in fact, they have had lots. The data sharing will extend to record the searches undertaken by other Solicitors in relation to the same Client, which again will be a helpful tool in seeing if a client is ‘shopping around’ to find somebody to take their case on.

The proposed amendments represent welcome progress for both Claimants’ Solicitors and Defendant Insurers alike in weeding out fraudulent claims and doing so at an early stage, before costs are unnecessarily incurred. They can however only be viewed as one step forward in combating fraudulent claims.

Whilst the proposed amendment to the Pre-Action Protocol itself is sufficient, a greater openness and collaborative approach is required between Claimants’ Solicitors and Defendant Insurers when claims fall outside the Portal due to fraud concerns prior to litigation. It is time we worked together more collaboratively and constructively to fight fraud at an early stage. Fighting and reducing fraud is something we all agree on.

Donna Scully, Partner, Carpenters.

MC // January 2015

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The Features

55

Managing a crisis Tim Wallis and Anne Staunton explain how Claims Professionals can incorporate Crisis and Reputation Management into their Business Strategies and beyond.

Client objectives A defendant’s objective, when faced with potential litigation, is normally focused on whether the claim is defensible and, if it is not, damage limitation. Once reputation is involved, the situation usually becomes more serious and the concerns involve brand and share price. The gravity of the situation is illustrated by the following warning from Warren Buffet: “Lose money for the firm and I will be understanding. Lose a shred of reputation and I will be ruthless.”

Case study Some years ago, my former firm acted for an institution concerned in a sexual abuse scandal. The parents of the children involved were, of course, outraged. The media story ran and ran, with daily press reports. The institution was sympathetic to the families but felt constrained, for insurance and litigation reasons, to adopt a “no comment” stance. This fuelled the media fire.

Then the institution made an announcement and the press went away. The reason they did so was that the client offered a mediation scheme for all potential claims.

The scheme was funded by the client, at modest cost, did not compromise the insurance position, and satisfied the parents who understood that legal liability had to be investigated before compensation could be considered.

‘The planned use of communication is key to managing reputation in a crisis’ From the technical litigation perspective little had changed.

Liability had not been admitted. The parents, however, had a serious promise that they would be listened to and for the press, the matter had become a non-story.

Planning for Crisis and Reputation Management Just as it is a little late to think about a business recovery plan as the fire engines arrive, it is best to plan for crisis or reputation management. A claims professional will act instinctively when deciding what procedural steps to take, but how will the client’s broader objectives be met and fulfilled?

In general terms, the mantra is: Predict, prepare, and either prevent or execute damage limitation.

Ideally, a claims professional will work with the client on risk management reviews where these matters can be considered and planned in advance. Where this is not practicable, the claims professional needs to be alert to these issues and ready to liaise with the insurer, the broker, the client and any pr/

‘Lack of communication serves to fuel media appetite and speculation, eroding trust in the brand and potentially creating an impression of a cover up’ communications team that works with the client. As the earlier case study demonstrates, the planned use of communication is key to managing reputation in a crisis. Once the institution informed the press of its plans to mediate, the media spot light on the case was switched off. Lack of communication serves to fuel media appetite and speculation, eroding trust in the brand and potentially creating an impression of a ‘cover up’; regardless of an organisation’s efforts to handle the claim appropriately. Similarly, ill thought through communication or a ‘knee jerk’ reaction can cause irreparable damage.

A measured approach Communication can be used successfully to reassure stakeholders and demonstrate the organisation’s commitment to its values and the promises associated with its brand. A strategy needs to be agreed and deployed from the outset, in conjunction with whatever steps are required from a technical claims handling perspective. A communications team, inhouse or specialist, should be assigned to manage the crisis, handling all related enquiries to ensure informed decision making and consistency of approach.

As with the case study, dispute resolution techniques such as mediation can be considered with a view to a swift, confidential resolution.

The client that feels that its reputation has been protected, as well as its technical claims handling needs being met, will use you again. If this is not the case you may not see the client again!

Tim Wallis, Expedite Resolution and Anne Staunton, Peak Marketing.

MC // January 2015

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The Features

57

Exceeding expectations Flexibility and transparency throughout the vehicle salvage process should be a fundamental focus when streamlining the client’s experience, as Jason Stinson reports.

The key to client retention It is essential to value all clients and ensure that no rock is unturned in providing a service that meets client’s ideal requirements. Methods which could help achieve this include; providing bespoke systems for clients, such as creating unique intranet portals. These portals are used to provide collection requests, enhance the ability to clear vehicles for disposal as appropriate and allow clients to run their own MI. Where required, it is also important to provide clients with images and relevant vehicle information (following their specific specifications), to enable them to remotely assess the damaged vehicle, without the cost of sending out an engineer. Operating on a ‘single point of contact’ basis, for

‘Portals are used to provide collection requests, enhance the ability to clear vehicles for disposal as appropriate and allow clients to run their own MI’ client instruction, as well as customer service departments, including administration, accounts, auction disposal, IT operations and contract Management, will also streamline the client’s experience.

Exceeding expectations…

Utilising a central computerised Audit Trail system gives the ability to keep track on the current situation of any vehicle, from the initial removal and storage request, to the collection of the auctioned vehicle by the new buyer or the scrapping of the vehicle. Furthermore, allocating an account manager ensures that client expectations are met and often exceeded.

At Raw2K, we have the capability to collect over 1000 vehicles per day and have over 136 acres of storage capacity – enabling us to store approximately 24,000 at any one time. We operate 65 de-pollution bays at our 23 sites and have a workforce of 366 staff – this includes administration staff as well drivers and management staff. Our fully audited customer base of over 30,000 vehicle buyers on our online auction site, including over 600 Authorised Treatement facilities, ensures we receive fantastic returns on the vehicles that are sold through our high profile online auctions.

Streamlining the salvage process Throughout the salvage process, it is vital to offer clients flexibility in the way they dispose of vehicles, so they can either choose for vehicles to be scrapped or be collected and securely stored for disposal by auction. Another means of increasing flexibility and ultimately, streamlining the salvage process is by offering clients the option to list vehicles from their location – saving the cost of moving the vehicle and the associated carbon footprint.

Using an online auction provides a free and simple, ‘no risk’ scenario, as, unlike other auctions, if the vehicle doesn’t achieve the clients reserve value and subsequently does not sell, Raw2K do not charge our clients for the listing fee.

Environmentally sound recycling processes Our Authorised Treatment Facility sites are meeting the present EU recycling targets to reuse, recycle or recover 85% of the weight of end of life vehicles (ELV) with some already achieving the 2015 recycling targets of 95%, by investing in post shredder recycling technologies to meet the goal. We ensure that a Certificate of Destruction is completed on all Category A and B vehicles as well as all end of life vehicles and forward a copy of the Certificate to the client or vehicle owner when required.

Becoming a member of the British Vehicle Salvage Federation (BVSF) ensures that businesses can stay at the cutting edge of all new legislation and company procedures. This ensures service offered to clients is of the highest standard on a consistent basis.

A robust Corporate Social Responsibility (CSR) strategy An effective method to offer clients quality assurance is by obtaining ISO 9001 acceditation. Our ISO 9001 Accreditation has led to the implementation of documented and standardised procedures for all Head Office Client Administration, with all relevant departments observing the procedures as relevant to our vehicle instruction processing on behalf of all our clients.

Internal and external monthly audits, as well as audits which are undertaken on a quarterly and yearly basis, offers clients peace of mind and ensures we can stay abreast of all key developments, as well as identify areas for change and improvement.

Jason Stinson is Director at Raw2K.

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MC // January 2015

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The Features

59

EMPLOYMENT TRIBUNAL FEES – COUNTING THE COST Peter Orton reports on the dramatic fall in claims following the introduction of employment tribunal fees in July 2013.

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he introduction of tribunal fees has well and truly put the cat amongst the pigeons in the employment sector, creating a political storm to boot, as the various parties debate whether claimants have been priced out of the tribunal system.

The stated aims of the Coalition Government in introducing the fees regime included: (i) to transfer around one third of the annual cost of running the tribunals to those users who benefit from it; (ii) to remove unmeritorious claims; and (iii) to encourage alternative methods of dispute resolution. The last objective went hand in hand with the introduction of Early Conciliation, which became mandatory for all claimants from 6 May 2014, as a prerequisite to launching a tribunal claim.

Where are we now?

18 months on, what does the evidence tell us about whether the regime is achieving its objectives and if so, at what cost? Moreover, what impact, if any, has the new landscape had on claims that, at first glance, one might imagine would be largely unaffected by the introduction of fees, namely those cases funded by legal expenses insurance?

Official statistics reveal that £76.4 million was spent on employment tribunals in 2013/14. Of this amount, £4.5 million was recouped from fees over the first 8 months, suggesting an annual contribution of around 8%. This appears to suggest that a much smaller contribution is being achieved than was anticipated. But the real headline is that, in the period October 2013 to September 2014, tribunals received over 32,000 fewer cases than in the previous year, a decrease of 64%. This

has caused consternation among the trade unions, who have seen two judicial review challenges fail, most recently in December 2014. Unison’s case was that the fees regime made it excessively difficult to exercise employment rights and was indirectly discriminatory. The High Court rejected the application, mainly on the basis that no concrete evidence had been provided that any particular claimant(s) had been unable to bring claims as a result of the fees (whilst accepting that the reduction in the number of cases brought was ‘striking’).

have fallen, albeit far less dramatically.

Logically, those with LEI should not be affected by the introduction of fees, since they would normally be covered by the policy. Yet the initial indications suggest that there has been as much as a 20% reduction in insured claims since the introduction of fees. It is perhaps in this area where the above ‘muddying’ factors might more obviously be responsible for the downturn. One suspects that it will take at least another year before there is sufficient statistical evidence from which to draw any reliable conclusions.

The effects of change…

Whilst some have argued that the statistics speak for themselves, the picture is somewhat muddied by the fact that the Government introduced another major change in April 2012 that would have a significant impact on claim numbers; increasing the qualifying period for protection from unfair dismissal from one to two years.

The effects of this change really only began to ‘bite’ from mid-2013 onwards because of the transitional provisions of that legislation. Added to this, the introduction of ACAS Early Conciliation seems to have had its own impact on claim numbers, with ACAS claiming to settle 16.5% of cases and a further 19% of employees apparently telling ACAS that they were not proposing to take the matter further. A steadily recovering economy is a further factor that cannot be ignored in the overall analysis.

What is clear at this stage is that the cost per claim to insurers has significantly increased as a result of the introduction of fees, certainly to those insuring claimants. Whilst the rules allow for fees to be recouped as part of a judgment in a successful case, the reality is that the majority of cases settle before trial without any admission of liability by the employer and there is often little incentive for employers to pay the fees, especially if there is any hint that the claimant might be insured.

Looking to the future…

Although the precise extent of the fees’ impact on claim numbers is open to debate, it is clear that there has been a significant effect. Perhaps more surprisingly, the evidence also suggests that legal expense insured claims

As for the future, the Government has committed to carry out a comprehensive review of the employment tribunal fees system, although it has yet to say when that review will take place. With Labour pledging in its recent pre-manifesto report to “abolish the current system, reform the employment tribunals and put in place a new system which ensures all workers have proper access to justice”, it seems that the forthcoming general election will be viewed with great interest by employment lawyers, unions and insurers alike.

Peter Orton is Head of Employment at Lyons Davidson.

‘The Government introduced another major change in April 2012 that would have a significant impact on claim numbers; increasing the qualifying period for protection from unfair dismissal from one to two years’ MC // January 2015

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The Features

61

There’s a New Kid in Town But unfortunately it’s an unruly amendment and a bit of a troublemaker, as Simon Pinner reports.

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efore the introduction of the “Jackson” rule changes in April 2013, a claimant’s success fee and ATE premium were normally paid by the losing defendant. Since then, the claimant must pay these two items (“the additional liabilities”) out of his winnings. So far, so bad, but what if the claimant wins, but cannot get his hands on the money - how is the success fee going to be paid to the solicitor and the ATE insurance premium paid to the insurance company?

This is exactly the problem faced when the claimant is a child (anyone under 18). A child cannot conduct litigation so the claim is always technically made by a “Litigation Friend”. This is a parent, guardian or other adult who can give the solicitor instructions on the child’s behalf and who will be liable for all costs. Since the claimant is a child, the court generally protects any damages that are recovered by ensuring they are invested and inaccessible until the child is 18. This leaves the Litigation Friend liable to pay the solicitor’s success fee and the ATE premium (quite a few hundred pounds) out of his own pocket!

Reasonable measures?

The current rule (Part CPR 21.12) is not wholly unreasonable however. It says that if an application is made to the Court then the Litigation Friend is entitled to have these two additional liabilities paid out of the child’s damages (provided they are reasonable) before the damages are invested.The additional liabilities can even include interest on a loan taken out to pay recoverable disbursements or an ATE premium.

Over the last 21 months, this has not always worked well in practice. Some local District Judges have been very unwilling to allow children’s damages to be depleted and they will simply not allow the additional liabilities to be paid out of damages. Effectively they simply disagree with the current rule, knowing that an appeal will be uneconomic to pursue. Things are about to get a whole lot worse however.

An amendment to Practice Direction 21 comes into force on 6 April, 2015. Where the Litigation Friend makes such an application, he must now make a witness statement setting out: • Why the costs or expenses were incurred; • The risk assessment made at the time which shows how the success fee was calculated; • The reasons why the particular funding model was selected; • The advice given to the litigation friend in relation to the funding arrangements.

The statement must also separately set out the amounts awarded for general and special damages, the costs payable by the defendant and it must attach a copy of the conditional fee agreement or damages based agreement.

The important thing to note about this new rule is that because it takes effect from the 6 April, 2015, it necessarily affects any damages awarded after date. The damages which are awarded obviously relate to a case which started some time ago, and in cases involving children this may be a number of years ago because time is often required to assess the injury as the child grows up. In any case, even if the claim was started a year or two ago, the key issue is that when the solicitor was first instructed, he had no idea that he would have to justify the above points in this way.

On the contrary, these matters are generally considered privileged and in most cases would be recoverable against the defendant without disclosing, for example, of the CFA.

‘If it is not possible to obtain an order that some or all of the additional liabilities are paid out of damages, then the solicitor will be asking the Litigation Friend to pay them’ It will be seen from the above that the solicitor may be ill prepared to deal with these issues. If it is not possible to obtain an order that some or all of the additional liabilities are paid out of damages, then the solicitor will be asking the Litigation Friend to pay them. Unfortunately the Litigation Friend may be ill prepared or not in a position to pay what is likely to be quite a few hundred pounds and this may cause conflict between the solicitor and the Litigation Friend, notwithstanding that the claim has been successful. It is of course always possible that the solicitor may choose to waive his success fee (although that seems particularly unfair on the solicitor since he has run a successful claim), but certainly the ATE insurance provider will want the premium paid for the risk it is taken.

Unfortunately, there simply are no straightforward solutions - it is part of the problem caused by the Jackson reforms in ceasing to make these additional liabilities payable by the defendant. Kids! Who’d have ‘em?

Simon Pinner, Director, Box Legal.

MC // January 2015

62

5 minutes with...

5 minutes with...

Adrian Furness

Q: Has the industry changed drastically since you started working in it?

A: Enormously; the landscape has changed in so many ways. Customer’s expectations are increasingly demanding and rightly so, competition has become even fiercer and the legislative landscape has altered significantly through Woolf, Jackson and the rise of whiplash claims. Then there is technology. When I started work, computers were only commonplace in the workplace but now my children are using technology every day that our Industry is only just beginning to think about!

Q: What has been the key positive or negative impact of change in your area of the market?

A: Positive is the rise of the customer.

Insurers are much more customercentric than when I entered the industry.

Negative is the unsavoury feeding frenzy to milk every last ounce of profit out of a claim from all parties – insurers, solicitors, brokers and accident management companies.

Q: Who inspires you and why?

A: My father - always stands up for what he believes in, despises injustice and prejudice, determined to do his best but always has time for others and at 91, still makes sure he goes to his Local pub at least twice a week!

Q: Have you had/got a mentor? If so, what was the most valuable piece of advice they gave you?

A: I did have a mentor; he was my first Boss at Provident Insurance, Mark Collier. The best advice he gave me was that I had achieved things through my passion and determination so it was important not to change or temper those traits just to try to fit in. So, stay true to your beliefs and be yourself.

Q: If you were not in your current position, what would you be doing?

A: I am a qualified football coach, so Managing Manchester City.

Adrian Furness, Claims Director, Covéa Insurance.

Ground-breaking ABS to implement Proclaim Aspire Law chooses Eclipse’s Proclaim Case Management solution

A

spire Law - a partnership between Aspire, a national spinal injury charity, and Moore Blatch, a personal injury law firm - is implementing Eclipse’s Proclaim Case Management Software solution.

Aspire recently became the first organisation of its type to own a stake in an Alternative Business Structure (ABS) law firm. The new venture will be dedicated to providing a specialist service to people with spinal cord injuries, creating a Social Enterprise Model, which places clients’ needs and requirements at

the centre of work, delivering a highly personalised service. The service could, in time, expand to include advisory elements around housing, education, care and rehabilitation.

Aspire Law will make no deduction of fees from the compensation awarded to clients and - as a joint partner - the charity will receive 50% of profits to reinvest into projects, like the Aspire Housing Programme which provides accessible accommodation to spinal cord injured people discharged from hospital who would otherwise have nowhere suitable to live.

The new ABS is implementing Proclaim across the business, providing a desktop solution for fee earners dealing with a broad range of claims. Proclaim provides scope

for the firm to expand its offerings into other areas, providing the ability to service the complete needs of its client base.

Chris Byron, Managing Director of Aspire Law, comments: “We are extremely proud to be able to introduce an alternative way of delivering legal services to people with spinal cord injuries, which combines the legal expertise of our team with strong charitable values.

The decision to implement Proclaim was commercially right for us as a business; having seen how the system enhanced processes at another Moore Blatch business, Moore Blatch Resolve, we were confident that Proclaim would be able to deliver in line with the aims of Aspire Law.”

The innovation

that’s revolutionising client communications for smart progressive law firms inCase™ is the first mobile application of its kind for law firms.

Specialising in personal injury and shortly industrial disease, inCase™ is a powerful tool that can be easily integrated into your case management system.

What inCaseTM can do for your firm • Reduce time spent on the telephone and increase time spent managing cases • On-going connection with clients to update them on case progress and provide a dedicated and personalised service • Improve your customer service levels and differentiate your firm from the competition • Increase speed and ease of instructions by sending secure letters/documents for your client to sign within the app

What law firms are saying about inCaseTM “It has given us a real USP...”

Rachel Stow, Managing Director, Thorneycroft Solicitors

“A ready-made App at a fraction of the costs of developing our own.”

Greg Almond, Managing Director, Almonds Solicitors

“Instantly I could see how it fit with my vision.”

Bruce Hatton, Managing Director, Hattons Solicitors

Call us on 0161 410 0806 and quote MODERN CLA IMS to find out more or email enquiries@in-case.co.uk for a demonstration

You can find a video of how Thorneycroft Solicitors embraced inCaseTM at www.in-case.co.uk

Wondering how to profit in the new era of PI? The Personal Injury sector has changed – to compete, you have to use the very best Case Management system.

Proclaim is the UK’s leading Case Management software solution, in use by 20,000 professionals. Proclaim maximises efficiencies, cuts costs and enables you to provide a superb service experience.

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Portal-ready for RTA and EL/PL claims Automates procedures and document production Manages your full range of claim types ABS-ready – manages everything through one system Provides instant online services for clients and customers Integrates with business partners

Get the competitive edge

Call 01274 704 100

visit eclipselegal.co.uk or email info@eclipselegal.co.uk