Modern Claims Magazine - Issue 21

Issue 21 September 2016 ISSN 2051-6495

Linking the industry together

John Hurrell

“For a risk management strategy to be relevant in any organisation, it has to respond to the corporate strategy�

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MODERN CLAIMS

WELCOME

Editorial BOARD Amanda Stevens Group Head of Legal Practice Hudgell Solicitors

Oliver Smith Marketing Manager SlicedBread

David Simon Chairman Triton Global

Paul Lynes MD Back Me Up

Donna Scully Partner Carpenters

Ron Atkinson Head of Distribution Relationships SSP

James Roberts Business Development Director Insurance Europcar UK Group

Scott Clayton Head of Claims and Fraud Investigation Zurich

Keith Tracey Managing Director Aon Risk Solutions

Scott Whyte Managing Director Watermans

Lee Woodley Claims Director EDAM Group

Stephen Ward Managing Director Clerksroom & Clerksroom Direct

Lesley Graves Managing Director Citadel Law

Steven Davies Director and Solicitor Three Graces Legal

Lisa Beale Head Checkaprofessional.com

Tara Shelton Chief Executive Officer i-Cog Claims Management

Mark Hewitt Managing Director Rebmark Legal Solutions

Tim Wallis Mediator and Solicitor Expedite Resolution and Trust Mediation

Mark Ledger Principal Prosthetist Blatchford Clinic

Zoe Holland Managing Director ZebraLC

Welcome to the latest edition of Modern Claims Magazine. In this issue, I speak to our cover star John Hurrell, CEO of Airmic, about why their members are having to innovate faster than ever, and the role technology has to play in risk management. The full interview can be found on pages 13-15.

W

Nicola Klimkowski Head of Business Control and Development LAMP Services Limited

This year’s conference certainly ignited debate within the industry, and several features in this issue elaborate on themes from the event. James Maxey, the founder of Express Solicitors was in the audience on the day and in his feature on pages 44-45, he offers his opinion on the potential increase in the Small Claims Track limit and why he thinks if it goes ahead, it will not achieve the government’s objectives. One of the speakers from this year’s event, Carolyn Mackenzie, Complex Claims Director at RSA, elaborates about why collaboration is a two-way process when it comes to claims, and explains what those dealing with lower-value claims, can learn from the complex claims process. Read the full feature on page 51.

Please don’t forget to save the date for the third annual Doctors Chambers Modern Claims Awards, which returns once again to New Dock Hall, Leeds on 27th April 2017. Nominations will be opening at the start of November, so I would urge you to keep an eye on the website www.modernclaimsawards.co.uk for further details. Next year’s Doctors Chambers Modern Claims Conference will return in May 2017, please visit the website www. modernclaimsevents.co.uk for more information which will be announced soon.

Modern Claims are delighted to announce that we have partnered with Connected Claims Europe, which takes place on 28th and 29th November at The Grange Tower Bridge Hotel, London. Please see page 51 for further details on how to book the event, along with the discount code which has been produced exclusively for our readers.

I hope you enjoy this issue of Modern Claims Magazine, if you have any comments, questions or feedback, I’d love to hear from you. Please do get in touch with me via the details below. Happy reading!

Issue 21 September 2016 ISSN 2051-6495 Group Editor Charlotte Parkinson

Production/Editorial Assistant Brendan Gurrie

Project Manager Rachael Pearson

Events Sales Kate McKittrick

Charlotte Parkinson, Group Editor, Modern Claims Magazine. @modernchar charlotte.parkinson@charltongrant.co.uk 01765 600909

Modern Claims Magazine is published by Charlton Grant Ltd ©2016.

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.

September 2016

Modern Claims 03

MODERN CLAIMS

CONTENTS NEWS

INTERVIEWS

07

EdiTorial Board

13

7 The News With David Bott

David Bott considers the potential implications of raising the Small Claims Track limit, and questions when and if a Consultation will take place now that Britain has voted to leave the European Union (EU).

23

13 John Hurrell

Charlotte Parkinson, Modern Claims, spoke to the CEO of the Association of Insurance Risk Managers (Airmic), about why their members are having to innovate faster than ever, and the role technology has to play in relation to risk management.

17 Andrew Twambley and David Wiliams

The third Doctors Chambers Modern Claims Conference took place on 15th June 2016. Charlotte Parkinson, Modern Claims spoke to the conference Chairmen, Andrew Twambley and David Williams two months on from the event, to see how the industry can collaborate and move forward.

22 Navigating the market

Amanda Stevens, Hudgell Solicitors

22 How to give younger drivers a positive claims experience?

James Roberts, Europcar UK Group

23 Compensation Culture Scott Clayton, Zurich

23 What does a relationship look like between a credit hire company and an insurer?

Lee Woodley, EDAM Group

24 Personal Injury - Which way now makes sound business sense?

Lesley Graves, Citadel Law

24 What’s changed post-Brexit?

Donna Scully, Carpenters

25 What does ‘awesome’ look like?

Editorial Board contributors

Stephen Ward, Clerksroom, Clerksroom Mediators & Clerksroom Direct

25 Word of mouth

Lisa Beale, Checkaprofessional.com

27 Tackling culture shock in a fraudulent environment Ron Atkinson, SSP

27 How is the recent string of proportionality cases affecting WIP profiles?

the single platform for all legal

Zoe Holland, ZebraLC

29 I specialize, therefore I am

Oliver Smith, slicedbread/sharedo

29 A work of fiction

Scott Whyte, Watermans

04 Modern Claims

September 2016

MODERN CLAIMS Issue 21 September 2016 ISSN 2051-6495

EdiTorial Board

FEATURES

39

31 The right to choose?

Steven Davies, Three Graces Legal

51

44 Stop the Small Claims limit rise

31 Understanding emerging risks Nicola Klimkowski, LAMP Services Limited

33 Collateral lies and fraudulent devices: Claims managers beware

46 Sector Soapbox

David Simon, Triton Global

33 The Fraud Triangle

Tara Shelton, I-COG Claims Management

37 Only a matter of time

37 Cyber, a risk like any other?

Keith Tracey, Aon Risk Solutions

Paul Lynes, Back Me Up

39 The ‘buts’ of Brexit

Tim Wallis, Expedite Resolution, Trust Mediation and others

42 Life after injury - innovation in prosthetic limbs and the technology behind this

Mark Ledger, Blatchford Clinic

Modern Claims’s panel of resident associations outline the burning issues facing the claims sector.

48 Supply Chain Temple of Resilience

Mark Hewitt, Rebmark Legal Solutions.

39 The Millennial Market

James Maxey shares his views on why a rise in the Small Claims limit will fail to achieve the government’s objectives, and will only serve to block access to justice for genuine claimants.

Professor Richard Wilding explains why it is in every organisation’s interest to build its own Temple of Supply Chain Resilience, in order to ensure sustained competitive advantage into the future.

FEATURES

53

55 The growing importance of calibration as more manufacturers invest in ADAS

Tim Camm, technical manager at National Windscreens, highlights the implications for the aftermarket industry

57 Case Study: Eclipse

Gotelee Solicitors selects Proclaim Case Management to benefit from immediate process enhancements.

10 MINUTES WITH 58 10 minutes with…

Roger Coleman, Simpson Millar LLP.

51 The benefits of collaboration in complex claims

Carolyn Mackenzie explains how a linear approach to complex claims may not be sufficient, and outlines why insurers should seek collaboration in order to get the best result for the customer.

52 Time to stop hiding away

The Ministry of Defence must show leadership from the top and face up to its responsibilities, says Hilary Meredith.

53 Investing in the future

Saraya Fawcett explains the many benefits using a recruiter who specialises in insurance can bring to a company and its workforce.

September 2016

Modern Claims 05

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NEWS

David Bott TALKS NEWS David Bott considers the potential implications of raising the Small Claims Track limit, and questions when and if a Consultation will take place now that Britain has voted to leave the European Union (EU).

H

ere we are in the middle of the summer of 2016 and two massive announcements have been made that both still hang over us like existential swords of Damocles.

We have the (previous) Chancellor’s Autumn Statement, which announced that there would be a consultation on an increase in the Small Claims Track Limit in Personal Injury cases to £5,000, and that there would be an abolition of general damages in minor whiplash claims. And we also have Brexit, in which seventeen million people, or 52% of the people who voted, decided that the United Kingdom should leave the European Union (EU).

Both of them were bold statements and both have yet to come to fruition. To start the process of leaving the EU, the UK needs to serve an Article 50 notice and it does not appear that the Government is in any rush to do this. However, even the pre-notice period is having an effect on the normal running of Government as the “Brexit department” is sucking in resources from all other departments and leading to a general lack of civil servants for anything else.

This may well have an unintended effect on the (previous) Chancellor’s Autumn Statement Consultation, because if you don’t have any civil servants, how do you deal with the consultation?

I should point out here that your hopes should not get too high on the “there is nobody to deal with it point”, as the rumour is that the Consultation has been drafted and is ready to go. So all it needs is a Minister to sign it off, but again Brexit appears to be getting in the way.

Specifically, Mr Gove used to be in charge, but he is the only man to have had a worse summer than the England Football team.

He went from conservative power broker to out of a ministerial position and is now on the back benches.

Elizabeth Truss is now the Lord Chancellor and Minister for Justice and Sir Oliver Heald QC is the Minister of State. It is likely that Sir Oliver Heald QC is to be the person with responsibility for the Small Claims Track and abolition of general damages in the minor whiplash claims consultation.

We have an under-resourced Ministry of Justice, with new ministers considering whether to implement the brain child of a man who is no longer the Chancellor of the Exchequer

So all change at the Ministry of Justice, and further Brexit ramifications as George Osborne, the originator of Autumn Statement, was another Brexit casualty. In short, we have an underresourced Ministry of Justice, with new ministers considering whether to implement the brain child of a man who is no longer the Chancellor of the Exchequer.

that his announcement was not greeted with glee by the ABI, but there are some insurers or insurance executives who don’t think it is the greatest of ideas, as one of the consequences of raising the Small Claims Track limit is a likely flooding of the courts with half a million litigants in person.

What are the consequences?

To add to the general sense of ennui, I also think that in many ways George Osborne’s announcement was not entirely scripted or cowritten by the Association of British Insurers (ABI) and may well have been a partial frolic. I am sure that it was the shear simplicity of the announcement that was appealing. “Why don’t we just raise the limit? How hard can it be? What can possibly go wrong?” etc.

But the more you go into the consequences the more tricky and complicated this apparently simple thing becomes. I am not saying

September 2016

At the moment, a District Judge can deal with 20 Stage Three hearings in a day or 2, maybe 3 Small Claims Track hearings. So you do not have to be an expert in “time and motion” studies to realise that just raising the limit in the Small Claims Track is not a massively efficient step forward.

Stage Three hearings are also populated by barristers and solicitors; the claimant cannot give evidence as there are no provisions for it. A Small Claims Track hearing is populated by

Modern Claims 07

NEWS

In all of the white noise that surrounds this consultation, nobody seems to be putting very much energy into the abolition of damages in minor whiplash claims Litigants in Person, untrained in law, untrained in evidence and unable to realise a good offer when it is put in front of them.

One of the likely consequences of creating a future in which Litigants in Person are representing themselves is almost everything will go to a final hearing. This is because (on the whole) they will not know what good looks like. So a pyramid model goes out of the window. By a pyramid model, I mean 100 claims start with a protocol letter, most settle at that point, a minority are issued upon, and a minority of them go to a final hearing.

However, if you take the claimant advisors out - subject to small drop offs - the 100 claims that you start with could easily end up with the majority going to a final hearing. Throw in the fact that Part 36 doesn’t apply in the Small Claims Track and you wonder why it was ever viewed as a good idea. Would this lead to a reduction in costs for the insurer? Probably not. Would this lead to a reduction in the amount of fraud? Probably not.

If it ain’t broke...

So just raising the Small Claims Track on its own appears to be almost foolhardy, especially as currently about 70,000 Road Traffic matters and about 12,000 Employer Liability or Public Liability claims start in the Portal every month. The system works very well and has led to efficiencies and decreased costs.

All of the claims go through one channel and insurers can build workflows around it with ease. Contrast this with the potential future if the Small Claims Track is raised, leading to a Claim Form being served on any office of the Insurer that is hand written by a Litigant in Person. You never know, the particulars of a Claim may even disclose a right of action. But let’s not get too picky, as the proposed reforms are mainly to save costs, not to assist the drafting of pleadings.

To my mind the insurers have been pushing for a long time for a fully electronic process with a tariff based outcome or a quantum assessment tool at the end of it. Maybe this is where we will end up and maybe the consultation is just the mechanism to allow this to happen. Again, time will tell.

To my mind the insurers have been pushing for a long time for a fully electronic process with a tariff based outcome or a quantum assessment tool at the end of it Where do we go from here?

Finally, let us turn to timescales. I don’t think that Parliament being in recess is a debar to the consultation being kicked off. Especially as the MedCo consultation came out over summer. But it will need a Minister to sign it off. If the consultation came out over the summer of 2016, my view is the earliest implementation of the reforms would be October 2017.

In all of the white noise that surrounds this consultation, nobody seems to be putting very much energy into the abolition of damages in minor whiplash claims. I sincerely hope that this is because the mechanism of achieving this change is far from clear and would probably need primary legislation.

Would you look to amend the Portal to solve the conundrum?

Bearing in mind that the Portal was built to mirror CPR, would you look to start again? Maybe look to do something on the line of Online Dispute Resolution as per Lord Justice Briggs’s recent report.

So I am not sorry that at the time of writing there is no consultation, and to my mind the later the consultation starts… well that in itself is a minor victory. However, when it does start I can assure you that APIL, MASS, the Law Society, Access 2 Justice, the Unions, in fact all of the Claimant focussed organisations, will be ready and will do their utmost to ensure the voice of the claimant is heard.

Originally, he specifically ruled out Personal Injury from his remit, but his more recent comments seem to be opening up the door to Personal Injury being in scope. So, time will tell on that. But either way, on the current scope, he has said that if he gets the resource and money to make it happen, 2020 would be the go-live date.

One final note; do not assume that just because there is a consultation it means implementation. There will be the same lack of resource in 2017 as there is in 2016, as everything is sucked into the Brexit Department. Nobody mentioned this unintended consequence in any of the Brexit debates.

So bearing in mind the consequences of something as apparently simple as raising the Small Claims Track Limit, should the consultation actually be, “how can costs be reduced further, while maintaining access to justice?”

David Bott is Senior Partner at Bott & Co Solicitors.

One of the consequences of raising the Small Claims Track limit is a likely flooding of the courts with half a million litigants in person

08 Modern Claims

September 2016

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INTERVIEW

John Hurrell Charlotte Parkinson, Modern Claims, spoke to the CEO of the Association of Insurance Risk Managers (Airmic), about why their members are having to innovate faster than ever, and the role technology has to play in relation to risk management.

Q A

Is risk high enough on the agenda for businesses at the moment?

It is moving increasingly higher on the agenda. We have spent a lot of time speaking with our members, and other groups as well who represent boards, for example the Chartered Institute of Management Accountants and a group called the Chairman’s Forum. They all tell us that risk is moving up the board agenda, partly because of the reporting requirements of the Financial Reporting Council (FRC) code, and partly because the world is becoming a scarier place. Technology, globalisation and other factors are making boards more aware of just how inherent risk is to their business models.

Q A

What do you think are the main risks facing Airmic members and the rest of the industry, and why?

We conducted a survey of our members just before our conference this year in June, and the answer to that question was that the top three risks were cyber business interruption, cyber data breaches and, lastly, reputation. Many of our members’ companies are becoming more virtual organisations, whereas previously they would actually manufacture and have their own operations everywhere. Now they have bigger supply chains and utilise outsourcing, so their concerns now are focused on maintaining their brand and customers. All of those factors are underpinned by a contract, those contracts are absolutely critical to them and they are spending more and more time looking at the risks associated with those contracts. For example, if a supplier has a fire or explosion, they need to consider what impact that will have on their organisation and how that is affected by the contract they have.

Q A

How are Airmic helping members pinpoint and assess these key risks?

Businesses are moving so quickly to transform themselves and almost every one of our member companies are facing the possibility of disruption by a dotcom player. All those organisations are looking at the ways they need to change their businesses and how quickly they can respond to threats from highly technological organisations. Our members are having to spend more and more time pinpointing not just cyber risks, but technology risks; they are having to innovate faster than they’ve ever had to which is inherently risky. Brexit will speed up the need for innovation and where organisations have found it relatively easy to export to Europe, they will now want to export and trade around the world and part of this will involve moving into territories where they don’t have experience, with different risk profiles. In many cases, these are new and emerging risks with no tried and tested formula to assess the potential implications.

September 2016

For a risk management strategy to be relevant in any organisation, it has to respond to the corporate strategy

Modern Claims 13

INTERVIEW

The Insurance Act is fantastic; it’s exactly what was needed for the market and is already having a positive impact on claims, and as far as we can tell it’s going to have a positive impact on the relationship between policyholders and their insurers in the future At Airmic, we’re not only providing our members with guidance and education on these subjects, we’re also working with a range of players, such as the Chairman’s Forum and the Chartered Institute for Management Accountants, to encourage a coordinated response to today’s risks. We are also in constant talks with the insurance industry to help them provide solutions for risks which might be, traditionally, out of their comfort zone.

Q A

How are risk managers specifically responding to these and what are the core challenges for them?

One of the core challenges is to try to encourage the insurance program to respond to new and emerging risk.

Most of our members’ insurance programs look pretty similar to how they might have looked ten, fifteen or twenty-five years ago, and they incorporate basic property and casualty risks, when actually a lot of their risks now are around their brand, reputation, technology, intellectual property and their business model. The challenge for many of our members is to try to get the insurance industry to respond to some of these new and emerging risks which are (by definition) the areas that are most difficult to understand because they are new and emerging and there is no historical data to base their underwriting assessments on.

Q A

Can you outline a few more factors that are making risk management more complex?

Risk management is more complex because organisations are more complex. For a risk management strategy to be relevant in any organisation, it has to respond to the corporate strategy. Our members are having to get closer to the strategic level of their organisation to understand what their business plan looks like, what value they’re going to be adding in the future, and what threats there are to the business plan and their business model. Core competencies are now focused around customer delivery according to the brand, rather than having to run the logistics themselves. That makes the risk manager’s job more complex because the logistics, which may have been outsourced, still underpin the customer promise. There’s a lot around the virtualisation of organisations that will have an impact on our members which means they have to be more responsive. Whilst the work can be outsourced, the potential impact on the brand if something goes wrong cannot be, and the risks may be more difficult to control.

Businesses are moving so quickly to transform themselves and almost every one of our member companies are facing the possibility of disruption by a dotcom player

14 Modern Claims

Q A

What role do you think technology has to play in relation to risk management?

Technology is improving access to information. Risk managers are looking at information that offers real time analytics and regular reports, but the challenge now is how that data is used.

Organisations are now able to create models that predict potential outcomes based on certain data. For example, if these sets of circumstances occur, this makes it more likely that we’re going to have this type of loss, and therefore what can we do to intervene to make sure that we prevent that loss? The challenge is that there is too much going on for any one risk manager to be able to take advantage of, unless they prioritise and tailor it so that the risk management advisors on the supply side utilise technology to mitigate risks.

Q A

Are there are any other emerging risks that companies should be aware of?

The key risks are around brand and reputation and the insurance industry are currently looking at how they can respond to that. Most of our members are global organisations, so key risks for them are around terrorism, social unrest, mass migration, economic turbulence and the threat of another banking collapse. These are classed as new and emerging risks because the organisations are expanding their reach into new territories and facing risks which are new to their businesses.

Q

What are the major causes of large losses and the resulting claims? Are businesses aware of the types of insurance they need to consider?

A

Risk managers are aware of the issues. The insurance industry is very much aware of the need to try to help their clients as far as they possibly can, but there are clearly constraints, particularly where they don’t have underwriting data, as a lot of these risks are new and emerging, particularly on cyber. The organisations may not have a physical presence in some of these territories or the ability to carry out physical inspections, which is a challenge, and business models are changing faster than the insurance industry has historically felt comfortable to respond to. Insurers are having to think about how they can speed up the innovation process to make sure what they provide their customers maintains its relevance.

Q A

Do you think insurers are innovating fast enough?

They are willing to and the insurance industry have this as a high priority. In practice, one of the problems is that the innovative products or solutions then have to be sold. It’s all very well to come up with a solution, but if nobody buys it then that doesn’t help. The concept of working with customers during the innovation process is important as that way, by the time you unveil your response, you should have already obtained customer buy in.

You can’t just go into an ivory tower of research, then come out six months later waving a new product, expecting the market to want to buy that. It’s an intuitive process.

Q

How has the industry, including brokers, insurers and policyholders, responded to the Insurance Act 2015, which was implemented in August?

September 2016

INTERVIEW

You can’t just go into an ivory tower of research, then come out six months later waving a new product, expecting the market to want to buy that. It’s an intuitive process

A

We were worried earlier in the year, when very few substantive conversations were taking place between our members and their insurers. Lots of conversations had taken place with brokers, but insurers were still being asked fundamental questions, like what they would consider to be a fair presentation of risk, what a reasonable search is, what’s clear and accessible, and the insurers hadn’t responded. We then conducted another survey and the feedback we received from members was very positive as they had had open conversations, and they had gained a good understanding with their insurers of what was required of them, and the policyholders. We’re in a bit of a phony war though, because major claims haven’t really happened yet in the post-Insurance Act era. We think so far so good, but tentatively. What we have noticed is a falling away of claims challenges over the last 12 months or so, for what would have been traditional Marine Insurance Act 1906 causes, like basis clauses, warranty breaches and non-disclosure. So that has already improved. However, we have seen an increase in the claims challenges around other issues, for example late notification, so we’re looking at that quite carefully. The Insurance Act is fantastic; it’s exactly what was needed for the market and is already having a positive impact on claims, and as far as we can tell it’s going to have a positive impact on the relationship between policyholders and their insurers in the future.

Q A

What’s on the horizon for Airmic in the next 12 months?

We are doing a major piece of work over the next 12 months on cyber which will consider what the risk profile of a transformed organisation will looks like. It will also consider what the risk managers need to do to help improve the resilience of the organisation and what the insurance industry can do. We are also doing a piece of work on risk governance at board level, as we want to see how boards see risks associated with business transformation, and what they are doing to ensure that the organisational structures within their companies that keeps them advised about risks are effective. Traditionally, the chief information officers generally haven’t sat on boards as part of the risk management framework, so they have just looked at IT risks as IT risks and put in firewalls and patches etc., but they haven’t sat down with the HR director, who is responsible for culture and human behavior, where more than 50% of IT breaches are caused. We are asking what a modern business looks like and how organisations can improve their risk governance to respond to that, as well as the role of the risk manager. The key will be encouraging behavioral integration from the point of view of the risk agenda, to improve the ability of an organisation to embed the appropriate risk management framework. Both of those reports are due to be released next year. Finally, we are doing a piece at the moment which we shall release this year on broker business models .

September 2016

John Hurrell John was appointed as Chief Executive of Airmic in January 2008 following a career of almost 30 years in the Marsh and McLennan Group of Companies.

John was involved in a number of senior management roles at Marsh and, prior to his retirement from the company, was Chief Executive of Marsh’s Risk Consulting business throughout Europe and the Middle East for five years.

During his period at Airmic, he has been involved in extensive research into risk and insurance related issues which has resulted in a number of ground breaking publications from Airmic, including Roads to Ruin and Roads to Resilience.

John is a Fellow of The Chartered Insurance Institute and a Chartered Insurer.

Modern Claims 15

Claims Supply Chain Manager | Location Independent Major international insurer seeks an experienced Claims Supply Chain Manager to work from one of its prestigious claims offices, location independent.

This household name insurer has recently benefited from circa £100M investment and continues to transform key locations into ‘claim centres of excellence’.

The company has also witnessed its GWP rise, year upon year, and employs almost 6,000 insurance professionals.

Working from any one of the company’s offices throughout the UK, and reporting to the Head of Supply Chain, you will manage the performance of existing suppliers to the Property and Motor claims units. This will include working closely with Claims Handlers to understand their daily interaction with suppliers, and act upon their first hand recommendations and feedback. You will audit supplier performance and review MI to ensure that all suppliers are adhering to contractual demands, as well as managing those that are underperforming and perhaps removing them from the panel, if required. In addition, you will source new suppliers, establish processes and ensure the delivery of agreed SLAs and financial targets. As expected, you will ensure a consistent approach sou across suppliers and Claims Handlers, working in partnership with them to ensure that the proposition remains first class. As this is a varied role, you will project manage tenders, due-diligence and the implementation of suppliers.

It is essential that you have technical and specialist knowledge of supplier contractor management from within an insurer, ideally from a Motor and/or Property background. You will also have a previous track record of delivering tenders and securing new suppliers, through to implementation. Just as importantly, you must be driven, self-motivated and engaging, with a genuine passion for the claims industry. You will be working in an organisation where high performance, accountability and empowerment are valued and rewarded. Although it’s not a prerequisite, ideally you will have made strides towards relevant professional qualifications.

You will receive an attractive basic salary and company car, along with a performance/ business-related annual bonus. In addition, you will receive a structured personal development plan and the opportunity to attend a wide variety of conferences and networking events.

Job Ref: SF–1211 | E: sarayafawcett@astoncharles.co.uk | T: 0345 193 2420

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INTERVIEW

Andrew Twambley & David Williams The third Doctors Chambers Modern Claims Conference took place on 15th June 2016. Charlotte Parkinson, Modern Claims, spoke to the conference Chairmen, Andrew Twambley and David Williams, two months on from the event, to see how the industry can collaborate and move forward.

Q A

What were the key themes that came out of the Modern Claims Conference this year?

DW: I thought there were a lot of concerns about the Autumn Statement changes. Issues were raised about unforeseen consequences as claims management companies (CMCs) take on more work. There were also concerns about the damage the changes could do to legal business models.

AT: It became clear there is a lot of common ground and that neither of us are the actual enemy, despite what we might say in other forums. We have moved forward even since the conference, and meetings have taken place.

Q

What do you make of The Rt Hon Jack Straw’s claims that the majority of whiplash claims are ‘unnecessary’ and ‘have no foundation in medical knowledge’?

A

AT: I thought Jack Straw had been transported from another dimension, because he gave the same speech he gave to the House of Commons 5 years ago. He’s not qualified to make such statements, and he was completely out of date. He didn’t even seem to realise that MedCo was now up and running, he has lost it completely as far as I’m concerned.

DW: I am not a medical expert, but I see whiplash statistics across Europe in comparison to the UK and we do seem to have a ridiculously high number of whiplash claims. I also see from anecdotal evidence (rather than medical evidence) and from conversations with people generally, that it’s far too easy to get some random compensation based on narrative (rather than medical) evidence if you’ve been involved in a road accident.

So whether it’s the vast majority or not, I have no clue, but I do believe we have an unnecessarily large number of whiplash claims in the UK.

Q A

There is frustration with the constant attacking of the insurer’s good name, which is definitely going to hamper real collaboration David Williams

David, what do you think the main frustrations are from the insurer’s perspective?

DW: At the conference, there were clear areas for collaboration and common ground, and yet the line from the anti-reforms campaigners is still very much, ‘insurers are evil, don’t trust them’, whether it’s to do with claims handling, or automatic renewals, and that is very frustrating. Certain people are constantly trying to give the impression that insurers are something that they aren’t. There are also government regulations that prevent insurers - even if they wanted to - from behaving in the manner that is being described, so there is frustration with the constant attacking of the insurer’s good name, which is definitely going to hamper real collaboration.

One of the reasons I go to events like the APIL Conference and the

September 2016

Modern Claims 17

INTERVIEW

We can certainly make progress on pushing the maximum time a claims notification form (CNF) can be held to 12 months, rather than three years, and get rid of a considerable number of data-mining-led claims Andrew Twambley Modern Claims Conference is to understand both sides of the story.

The claimant lobby don’t seem to be able to understand the basic principle of insurance in terms of spreading risk. The reality is that if claims costs go higher and higher and higher, that could actually be good for insurer’s, but nobody seems to want to understand that, so when we’re trying to drive claims costs down, it’s not necessarily to our betterment. Nobody seems to want to understand that, so it’s as if people are sitting there with their hands over their ears, and that’s my biggest frustration.

AT: I respond in a similar way really. There’s a lot coming out from insurers on a daily basis, like in a recent article in The Sun, going on about the whiplash capital of Europe again. We have already established that the way figures are calculated in jurisdictions of Europe are completely different, so you can’t just directly compare figures in the UK with figures in Germany or France.

DW: But are they saying that maybe our regulatory and legislative framework should be nearer to Europe, so we don’t have this situation? The sad thing is that we won’t get anybody on our side, or your side. We are two almost hated, vilified segments of business and society, and the only argument that the claimant side seem to have is that insurers can’t be trusted.

Q A

Do you think genuine collaboration between insurers and claimant solicitors is possible moving forward?

DW: Yes.

AT: It is possible. We can definitely agree on a ban on all cold calling. We are also all on the same page regarding fraud. Let’s fight fraud. As a solicitor, working on a fraudulent claim is no use to me, it’s a complete waste of time and money. We can certainly make progress on pushing the maximum time a claims notification form (CNF) can be held to 12 months, rather than three years, and get rid of a considerable number of data-mining-led claims.

CMCs are driving the whiplash epidemic. They are also not fully understood - nobody really knows who’s behind them David Williams

DW: Definitely. Sweden have something like 21 days, in order to give both parties the chance to see what the real situation was.

Three years down the line, nobody’s got a clue at all. In terms of standards of evidence, we need to come to an agreement so that solicitors know what we’re going to accept. The most worrying thing going forward, regardless of whether the changes proposed in the Autumn Statement happen or not, is that currently, claims farmers are currently not restricted and regulated like law firms in terms of the amount of damages they can take, meaning that claims farmers could take say 90% of a claimants damages.

That is bad for genuinely injured people, but it also drives the compensation culture. It also facilitates greedy, third parties to earn from the mechanism.

AT: The claimant will only know this when he gets his cheque, if there’s any money left to divide up. At the conference, we talked about claimant solicitors giving notice (on the CNF) about where the claim has come from. A ridiculous argument ensued about why it shouldn’t happen, but if you’re afraid to say where the claim came from, you’re obviously worried about something.

Q A

How do you think each side of the industry perceives CMCs, and what do you think is their role going forward?

DW: They are perceived very badly and are viewed as a very large part of the problem. I certainly think CMCs are driving the whiplash epidemic. They are also not fully understood - nobody really knows who’s behind them, and I think both sides suspect the other, so there is a level of mistrust in that regard.

AT: The negative reputation of CMCs is off the scale, well below estate agents and bankers, and justifiably so.

DW: The strange thing is that in surveys that relate to trust, bankers don’t do as badly as solicitors and insurers, because whilst people generally hate bankers per se, they trust their own banks, and therefore they move up. Estate agents are down with us, but you’re right, CMCs are one of the very few organisations below us.

AT: Something that came out in the Carpenters Fraud Roundtable1 held in June was the distrust of the enabler. The enabler is a fairly new phrase which points towards CMCs, some of which encourage people to make claims that have very little value in the first place, and all they have in mind is their cut of the damages. The Solicitors Regulation Authority (SRA) needs to increase their focus on disarming the enablers.

DW: I agree.

Q

Do you think the government’s proposed reforms will be pushed down the agenda now Britain has decided to leave the EU?

A

AT: It’s pure speculation, but it can’t be high on the agenda at the moment. There’s so much currently going on at Downing Street that it must have been pushed back a little at least.

DW: Inevitably Brexit is top of the governments agenda. Going forward, timing is going to be everything. Some people were suggesting that it would take a while before we got into the legal machination of Article 50. There was a view within the ABI

18 Modern Claims

September 2016

INTERVIEW

The enabler is a fairly new phrase which points towards CMCs, some of which encourage people to make claims that have very little value in the first place, and all they have in mind is their cut of the damages Andrew Twambley and some other places that some elements would go through ahead of that. I see the small claims track limit as being relatively straightforward, so the simple elements proposed in the Autumn Statement may be taken out and progressed.

Q A

Do you think that’s a good thing or a bad thing?

AT: It would go against what the government said. Just picking off the low hanging fruit without thinking about it can’t be good for anybody.

DW: If the government increase the small claims track without better regulation and limits on CMCs then it’s a bad thing. I am on record saying there should be an increase to the small claims track limit, so I’m not going to say it’s bad, but CMCs need more controls at the same time.

Q A

Do you think claimants are being affected by the uncertainty in the industry at the moment?

DW: I’ll wait until I no longer hear the TalkSport adverts from some CMC, but for now, they are still pushing injury, PPI and paid-for bank accounts, so consumers aren’t affected yet. As we saw with the Jackson Reforms, there may be another big push from CMCs trying to fill their boots if they think there’s going to be change coming through, so the only impact would be more aggressive marketing.

AT: Agreed. The public have no idea, and are possibly becoming more of a victim to the CMCs, unless we get our act together.

Q A

Finally, where does the industry go from this point?

AT: We meet up with the ABI, thrash out the areas of agreement we have, then narrow down the disagreements and try to work on those.

DW: If both sides can genuinely understand the other’s position, then it will be easier to come up with a resolution that’s good for each party going forward.

1. See Modern Claims Issue 20, pages 48-51 for full coverage from the Carpenters Fraud Roundtable.

Andrew Twambley Andrew trained as a lawyer in the 80s and after flitting around various departments, landed in Personal Injury in the early 1990s. After plotting the ultimate demise of both Claims Direct and The Accident Group he set up injurylawyers4u with a view to treating injured clients ethically and fairly.

From a standing start of inviting a few of his mates to join a marketing collective, injurylawyers4u has become The UK’s foremost and biggest spending solicitors marketing consortium.

Andrew is also a partner in Amelans, a Manchester firm primarily dealing with personal injury cases. He has his eye on the future, and is constantly looking forward at ways to improve and innovate both businesses.

Andrew is a director of Access to Justice (A2J), an action group fighting to retain access to justice for those injured through no fault of their own.

He loves his hens and listens to punk music.

David Williams David has over 30 Years insurance experience, roles including Reinsurance Manager, Casualty Insurance Manager, & Managing Director Claims. David is now Managing Director, Underwriting.

He is an outspoken critic of Referral Fees, Credit Hire, High Legal Costs and the issues with Whiplash Claims. David has appeared on BBC Breakfast TV, Sky, Channel 4 and BBC News, as well as Radio 4’s ‘Today’ Programme, being interviewed on topics varying from Compensation Culture to Business Crime.

David originally hails from Bristol (explaining his passion for Bristol Rovers!) but now lives in Suffolk with his wife Catherine and two young sons Evan (9) & Ryan (7).

September 2016

Modern Claims 19

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EDITORIAL BOARD

Navigating the market Following the post-Brexit Cabinet reshuffle, do you see the reforms proposed by the Chancellor in the Autumn Statement being postponed or modified in any way? n my view, there is one inescapable short to medium term effect of Brexit - it will be a distraction to politicians and business leaders alike, delaying many decisions. I don’t see the change of personalities within Cabinet as being significant to the whiplash debate, rather the lack of Parliamentary time to pass necessary primary legislation to eradicate general damages.

A depleted Ministry of Justice, following severe pruning, now has additional work so some reforms cannot proceed on a full steam ahead basis.

I

Whilst some insurers are pressing hard for these changes, they would not affect all insurers equally. The debate about whiplash began years ago, so much lobbying material is out of date. Many insurers have since formed alternative business structures with claimant law firms, so loss of revenue would impact them too.

Much has been said about the alleged link between whiplash claims and fraudulent claims - I remember it well from my APIL Presidency in 2008/09. But no more compelling data appears to have been produced since then. Startling numbers are aired in the press, but I have not seen a single dataset proving a link between increased motor premiums and fraudulent injury claims.

There is a certain irony about pressing on with this reform; insurers have often questioned why Brits have the weakest necks in Europe, referencing our higher incidence of whiplash claims, but the public has voted to make Europe less relevant - is such cultural harmonisation out of step with what the man on the street cares about? I have never met a single person outside the insurance industry who believes fraud is a significant issue in the whiplash debate. I regularly speak to London black cab drivers, a modern day comparator perhaps to the man on the Clapham omnibus, who are more than ready to proffer opinions on current issues.

Repeatedly they cite congestion, cyclists, Uber drivers; but never fraudulent whiplash claims causing excessive premiums.

Brexit delays may mean lobbyists have to navigate a more crowded channel to the reform of small claims with potentially overlapping proposals from the Briggs review commissioned by the judiciary. Predicting the future in politics is always fraught but postponement of the whiplash issue, maybe in perpetuity, may not be any more surprising an outcome than the result of Brexit itself.

Amanda Stevens, Group Head of Legal Practice, Hudgell Solicitors.

How to give younger drivers a positive claims experience? ccording to the latest Department for Transport data1 on driving test pass rates, the number of young drivers is on the up. For the period April 2015-March 2016, 491,930 1724 year olds passed their test. This is a 0.8% increase on the same period in 2014-15, when 488,023 young motorists achieved this life-changing step.

A

Young drivers are undoubtedly a key market for insurers. Indeed, there are a number of insurance providers that make a virtue of targeting the youngest and newest drivers, such as Insure The Box. And there is no question that the use of telematics is making this particular group of motorists even more attractive, with the most recent research, by the British Insurance Brokers’ Association (BIBA), suggesting that the number of live telematics based motor insurance policies, including black box policies, has increased by 40% in just one year2.

But the challenge has always been how to give the newest and youngest drivers the best possible claims experience, especially if they need a replacement vehicle. The majority of car hire companies have approached replacement vehicle hire in the same way as their traditional rental model, applying age limits that mean drivers under 24 have either been prohibited from hiring completely or faced higher rates.

For insurers this has meant that there are only limited solutions available for the newest customers, even though they are probably where the biggest investment has been made for acquisition in the first place. It has been a conundrum for the motor insurance sector for years. However, the growing use of telematics data, providing the insight for a better understanding of how young drivers really behave behind the wheel, means times are changing. The insight that is coming from both insurers and their own data is helping rental companies like Europcar to understand the level of risk that young drivers present in order to create solutions tailored to this audience.

For example, we can see that young drivers given a replacement car provided by their insurer following an accident perceive this as a real benefit and, therefore, drive more carefully. And this has given us the confidence to create specific products for insurers to enable them to offer replacement vehicles to young drivers, providing they have 12 months driving experience.

In the battle for customer retention, clearly anything that can be done to enhance the customer experience is good news. And a new attitude to the youngest drivers has to be part of the solution.

Driving Test and Instructor Statistics (http://www.dft.gov.uk/ statistics/series/driving-tests-and-instructors/) 1

2 https://www.biba.org.uk/press-releases/40-increase-in-telematicsmotor-policies-in-a-year/

James Roberts, Business Development Director, Insurance, Europcar UK Group.

22 Modern Claims

September 2016

EDITORIAL BOARD

What does a relationship look like between a credit hire company and an insurer?

Compensation Culture Some have argued the rise in fraud is a result of the existence of a ‘compensation culture’. How true is this image, and how is it likely to change in the coming years?

T

he fraud risk is ever changing and has significantly developed in recent years to reflect a cocktail of statutory, regulatory and industry developments.

‘Crash for cash’ in the motor space is now largely considered a managed risk with the Insurance Fraud Bureau (IFB) and wider industry capability having a clear view of the threat, having spent considerable effort in improving detection rates. Although the risk remains, the industry now has some very sophisticated data mining and intelligence capabilities to identify it and disrupt it.

There is, however, clear evidence that some individuals involved in organised motor fraud are now replicating their scams in the casualty arena. 2014 saw the first major casualty fraud ring identified (slip and trip) with a large industry exposure. The IFB, other fraud agencies and insurers are adapting their strategies and services to address this growing threat. Fraud rings in casualty range from family based scams to maximise pothole claims to larger scale accident management driven attempts to systematically defraud the municipal and commercial sector via the creation of fictitious slip and trip claims. There is also some evidence of organised crime infiltrating the workplace to stage accidents.

Aggressive claims farming of historic and largely spurious whiplash and industrial disease claims continues to be a major issue which the industry and the government have spent considerable energy in combatting. Some Claimant solicitors can play an instrumental role in enabling fraud. Although it is a minority of solicitors who are involved in driving and supporting organised fraud and serious criminality, a proportion of solicitors are actively involved in aggressive claims farming and other behaviours that actively drive fraud.

The industry continues to witness high volumes of historic and spurious claims with the trade in claims data and cold calling remaining rife. Although tactics and MOs subtly evolve, a number of other established fraud threats remain a constant concern. These include credit hire fraud; opportunistic exaggerated injury and property damage; arranged theft and arson; and invoice fabrication.

DAM Group has now been trading for fifteen years, and in that time creating and maintaining long term relationships with insurers has always been on the top of our agenda.

Some have been receptive to this and recognise the benefits of a possible partnership, where others couldn’t have been further from that, not even wanting to engage in any sort of conversation.

Lee Woodley has been appointed to join the Group recently as Claims Director. With 25 years’ experience working in Credit Hire, Lee will subsequently assume responsibility for our in house settlement team and insurer relationships moving forward.

In our world, it is well known that the GTA is a voluntary agreement that is widely acknowledged to be an effective protocol for the settlement of credit hire claims. This then offers material cost savings to insurers, though it does all depend on the behaviour of all parties involved for these savings to actually materialise.

One of our main objectives over the next 12 months is to improve our communication channels; it makes sense for all parties involved and we recognise that the GTA has its place, and we will continue to work within the framework because of this. However, working with Insurers to develop those relationships is paramount as we look to set up Protocols moving forward. These long-term relationships with insurers are one of the Group’s priorities, says Lee, with the investment being made and changes in the structure of the organisations.

Protocols for the CHO produce improved cash flow, reduce the age debt profile, and the amount of files referred to solicitors decreases. For insurers it produces a fixed fee or discounted rate with less touch points in the claim life cycles. Protocols will harness a more efficient working relationship for both parties with the removal of frictional costs and the associated cost of litigation.

We are looking forward to seeing what the next 12 months looks like.

E

Lee Woodley,is Claims Diretor at EDAM Group.

Scott Clayton, Head of Claims Fraud Investigation, Zurich.

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EDITORIAL BOARD

Personal Injury – Which way now makes sound business sense?

Relentless challenges to the profitability of carrying out personal injury (PI) work remain an ongoing concern for many firms. s I write this article, it is anyone’s guess what will happen regarding the proposed increase in the small claims limit and the potential widening of the net for claims caught by fixed fees. Any firm dealing in claimant PI has its future strategy under the spotlight and must be thinking “Which way now?”

A

Many firms have diversified and added clinical negligence, noise induced hearing loss or holiday sickness claims to their suite of PI services. Others have remained with their core services but found a hardening of attitude from insurers and thinner profit margins have resulted in WIP and capital lock up and negative impact on cash flow and profitability. Furthermore, how are case acquisition costs stacking up?

A firm’s strategic future in PI could be to invest further and acquire more work, trade out and run the book off, sell or merge.

Whichever option one takes, ensuring your PI work is as lean and profitable as possible will make you agile to react to the future opportunities and challenges ahead. Identifying areas that are capable of improvement can enhance profitability now and set you in good stead to make sounder business decisions in the future.

Commissioning an independent review of your PI business can achieve this by considering the following as a fundamental starting point: 1. Case management system – utilisation and potential for development.

2. Governance and oversight regarding fee earner technical capability, financial performance and risk management.

3. WIP valuation, financial forecasting and cash collection.

4. Robust management information (MI).

If you are embarking upon a merger or sale, carrying out your own vendor due diligence before you go to market is critical. Through a similar process to an independent review you ensure that your PI book’s valuation is maximised and your systems and financial MI are robust under independent scrutiny. This exercise can make a deal look far more attractive and increase its value.

Whether by independent review or vendor due diligence the review process should achieve the same aim - namely to make a business leaner, increase profit and get fit for whatever lies ahead.

That makes sound business sense.

What’s changed post-Brexit?

Following the post-Brexit Cabinet reshuffle, do you see the reforms proposed by the Chancellor in the Autumn Statement being postponed or modified in any way? e may have had a referendum in June, not a general election. The political complexion of the government may have remained the same but after the tumultuous political events following the Brexit vote, a great deal has changed. It is of course very early days, but the new PM, Theresa May, has purposefully flung away her billing as the ‘continuity candidate’ that was so erroneously assigned to her during the Tory leadership contest. She appears intent on demonstrating that only she will define her premiership, unrestrained by the policy positions of the Cameron/Osborne government that went before.

W

The MoJ was one of the departments to feel the impact of a clean sweep of new Ministers. The former team of Gove, Raab, Selous and Vara were all casualties of May’s fearless reshuffle that saw around a quarter of ministers sacked. The final casualty was Lord Faulks who resigned, foolishly voicing concerns that the new Secretary of State and Lord Chancellor, Liz Truss, isn’t a lawyer.

Didn’t he spot that that sacred cow had already been slaughtered when he joined the MoJ under Chris Grayling?

So will all of this have an impact on the proposed personal injury reforms? To a large extent, the referendum, and the campaign lead-up, already had. The claims market had largely anticipated that the consultation on the proposed reforms would have appeared in the Spring and feared that rushed legislation might be announced in the Queen’s Speech in May. With a new team and the main advocate for PI reform – Lord Faulks – within the MoJ having departed, some have undoubtedly been optimistic that the reforms will be kicked into the long grass.

I’m afraid I’m more pessimistic. The consultation may or may not be published over the summer and we may have to wait for a while yet before it sees the light of day, but I strongly suspect that it’s still coming. The background work has already been done and there are whispers that the consultation is ready to be published.

Most Conservative MPs regrettably share the misplaced but prevalent view in the British press that there is a ‘compensation culture’ to be fought. If I’m right that it is probably still coming, I do sincerely hope that MoJ officials will have used this enforced pause to produce a more thoughtful and workable set of reforms, tackling fraud systematically, but preserving justice and avoiding potentially calamitous unintended consequences. As Charlie Chaplin said, you’ll never find a rainbow if you’re looking down.

Lesley Graves, Managing Director, Citadel Law. Donna Scully, Partner, Carpenters.

24 Modern Claims

September 2016

EDITORIAL BOARD

What does ‘awesome’ look like?

Word of mouth

e’ve all heard the calls for change at the Bar, for chambers to be more relevant, sustainable, attract more talent, continue to compete and deliver the quality of expertise that our customers expect. But who is rising to the challenge?

Does the claims industry utilise social media to its maximum potential and could/should insurers adapt some of the successful marketing techniques of CMCs and aggregator sites for their own marketing purposes?

People First Clerksroom is a business that exists because of its people. This should be the case for all B2B brands, but particularly legal services. However, we do not rank our barristers any higher than our complete network of awesome people.

nsurance for many is a necessity and can be purchased begrudgingly, often settling for a policy it is hoped will be adequate, but hoping that if a claim were to become necessary, then the insurer will live up to their name by providing the great customer service expected and the claim will go through smoothly!

W

When we talk about ‘our people’, we mean our clients; those who send us work, use our services and pay our fees. ‘Our people’ also include our suppliers who help us deliver our great service. Our people are also, and very importantly, our staff and our barristers; the people who make the business great and who are working together to create an awesome future.

A culture of change What makes Clerksroom different to any other chambers in England & Wales is the culture. A culture that has taken 15 years of continuous hard work to develop and build. A culture that does not accept ‘good’ as it must be ‘great’. Then, when we achieve ‘great’, we review it again and ask ourselves what ‘awesome’ looks like. By awesome, we simply mean ‘extremely impressive’.

‘Awesome’ in the legal profession isn’t always easy to achieve, but we take time out on a daily basis to see what awesome looks like and how we can one day achieve it.

Change handlers Thanks to some heavy and measured investment into our people and our processes, as well as our marketing (as we have previously discussed in Modern Claims), we have the ability to prove our model delivers sustainable benefits to all involved. This is why our growth rates continue to rise, our investments in people and digital marketing increase and why our contractual arrangements grow on a daily basis.

Every pound of marketing spend, investment in our people and business development can be tracked into our conversion rates.

We do our job and we expect our people to do theirs. This is why we look for exceptional, forward-thinking professionals to join our exceptional business.

We believe the future is bright, positive and full of opportunity. We also accept that we will need to change, move swiftly and react to the raft of changes coming our way soon – and that requires some seriously awesome people.

I

Aggregator sites that deal with prices, along with policy details, are often seen as a great way of finding cover at a competitive price. They are well visited, easy to use and a good way for prospective clients to view a multitude of insurers and purchase a policy without ever having heard of them and never having the need to pick up the phone; a great sales tool, alongside the insurer’s own website.

Some insurers have started to step away from aggregator sites for various reasons and it is also thought that some prospective clients visit an aggregator site just to find the cheapest quote, which makes the product even more of a grudge purchase, which for some will never change. This then begs the question on how to stand out from the crowd, be different and educate prospective clients that it is not all about the price of the policy, but to take a look at the cover provided and - equally as important - to have the availability to review services provided by the claims department, should their services be called for.

The true worth of an insurance company comes at the time of a claim, when the purchaser needs help and understanding the most. The most intelligent and forward thinking of firms, who think outside the box, placing their heads above the parapet by providing details on those who have claimed on their policies, the service experienced and the journey involved, via a third party, will lead the way and provide the information many purchasers require to make a decision. One that is not just based on price alone.

Be different; providing reviews on quality creates demand!

For more information contact us on: 0800 093 8414 or email us at info@ Checkaprofessional.com Lisa Beale, Head of Checkaprofessional.com

More information about our culture, our work and our values can be found at Clerksroom.com Stephen Ward, Managing Director, Clerksroom, Clerksroom Mediators & Clerksroom Direct.

September 2016

Modern Claims 25

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EDITORIAL BOARD

Tackling culture shock in a fraudulent environment Some have argued the rise in fraud is a result of the existence of a ‘compensation culture’. How true is this image, and how likely is it to change in the coming years? s people have become more aware of what they are doing and what they can get, a compensation culture has emerged where individuals are more likely to make a claim. Whiplash claims are higher than ever, and insurers have seen a sharp rise in customers reporting their mobile as stolen or damaged just as the latest model is released.

A

While some of these claims are undoubtedly genuine, in an AXA study published this May, more than two million people admitted to having made a fraudulent claim – and the actual number of dishonest individuals is likely to be higher still.

Insurers are partly responsible for this trend, as they have not secured the trust of customers. A third of respondents in the AXA study felt an exaggerated claim was justifiable as insurers “try to trick their customers with small print”.

Increasing levels of fraud have added an extra £50 to the annual insurance bill of every honest UK policyholder. It’s not only premiums that have been affected however. A recent YouGov poll showed 42% of adults who could potentially have claimed for personal injury cited the compensation culture as the reason they did not do so.

How can the insurance industry change this picture? Amongst the challenges it faces are the need to demonstrate claims fraud is not a victimless crime and the lack of previous interactions between fraudsters and insurers in cases such as slips and trips.

While the first of these is an education piece, the second highlights the benefit of having greater insight into customers right from the beginning of the relationship. This is especially pertinent given SSP research showed over 55% of consumers believe falsifying their car insurance details is acceptable – and Brightside reported drivers who lie on their initial application are 66% more likely to make a claim.

Solutions such as SSP Verify capture and monitor the behaviour of individual customers in real-time across the whole insurance market to identify when manipulation of their application data is taking place, so insurers can respond appropriately. With this intelligence, insurers can focus on their quality clients, writing the risks they wish to write at the correct premium and declining risks that are clearly suspicious.

In the compensation culture world, such technology enables providers to shut the stable door before the horse has even considered bolting.

How is the recent string of proportionality cases affecting WIP profiles? ith a string of recent cases, proportionality is a hotly debated topic that is here to stay. Challenges due to the hardening attitudes of Courts and Defendants have the potential to impact heavily on the valuation of ‘accrued net income’ and off balance sheet WIP.

W

Firms relying upon historical recovery rates for financial modeling and WIP valuation need to take heed that a downward pressure on costs recovery due to proportionality challenges is a potential risk.

This is a live issue for many personal injury firms, especially those managing NIHL and clinical negligence cases. Key stakeholders such as banks, funders and accountants also need to be aware of the emerging risks and the impact on WIP valuation.

Proportionality is also affecting M&A valuations and, increasingly, a focused area of due diligence.

Recent cases

In the recent cases of BNM and May, the respective courts made an assessment on reasonable costs. However, the Master in each case further reduced the amount of reasonable costs by 50% based on their views of proportionality.

In the case of May, Master Rowley made clear that “the amount that can be recovered from the paying party is not the minimum sum necessary to bring or defend the case successfully”.

In the case of BNM, Master Gordon-Saker in his judgment stated that “the sums which had been allowed as reasonable on the line by line assessment were disproportionate and were about twice the sum which would be proportionate”.

Impact on niche areas

Courts are struggling to accept the argument that formerly ‘niche’ areas are complex and require more extensive costs to be incurred because of the specialist nature of advice and the complex issues that exist within the case. The reality is that, in some circumstances, some aspects of these niche areas have been volumised. De-skilled. Call it what you will, but it is having a significant impact on WIP or costs recovery.

This is a warning shot to firms operating in ‘niche’ areas who have not streamlined their process and have not provided the service that is necessary to run an efficient case. Changing of attitudes by the Courts and Defendant Insurers is confirmed by what ZebraLC has seen on field audits. A failure to recognise these issues will ultimately lead to black holes in firms’ WIP profiles, and potential swathes of WIP that are no longer recoverable.

Zoe Holland, Managing Director, ZebraLC.

Ron Atkinson, Head of Distribution Relationships, SSP.

September 2016

Modern Claims 27

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EDITORIAL BOARD

I specialise, therefore I am

A work of fiction

Should insurers look into hiring from alternative talent pools to specialise in certain types of claims, and to help with the approach to emerging risks?

Some have argued the rise in fraud is a result of the existence of a ‘compensation culture’. How true is this image, and how is it likely to change in the coming years?

or us at slicedbread, the creators of sharedo, the answer is a resounding yes. It’s what our clients are doing and our clients are renowned global innovators who have chosen sharedo because it provides them with the flexibility to model their business around emerging trends and risks.

he phrase “compensation culture” is without doubt the single biggest and most successful slogan ever devised by the insurance industry, no doubt with plenty of help from their media friends. It sensationalises and vilifies the process in which ordinary people (not gangsters, fraudsters, terrorists or even aliens) seek recompense for something unfortunate that has happened to them.

F

The property and casualty insurance industry is in a state of flux.

Telematics, new distribution models, complex analytics, changing client demands and of course, Brexit, are creating a whole new set of challenges.

The old adage, ‘a jack of all trades; a master of none’ springs to mind when looking at the new trends within the insurance market.

How would a motor claims specialist deal with autonomous vehicles, or how would someone who specialises in UK insurance understand the different procedures and legislation for a foreign market? It would be inefficient and reactive. The obvious route would be to ensure that the relevant talent pools were in place to meet the demands of clients and to triage claims to the appropriate resource, be it internal or external teams.

Our ethos at slicedbread is to ensure our clients own their processes and data. This is incredibly important as the days of labour intensive paper based claims are long gone and the need to modernise, optimise processes and have the agility to reinvent business models to meet new challenges is paramount.

As well as hiring alternative claims specialists, it is also important to look into other specialist areas. One such area is business intelligence. As insurers embrace factors such as wearable technology and telematics, without the history and experience behind them, the need to understand large amounts of data is especially important to spot trends and eliminate claims leakage.

We can’t be expected to know everything. Specialising and ensuring that claims are handled by appropriately skilled people will improve efficiency, maximise customer service and enable insurance firms to ride the massive waves of transformation to future success. The future is not set in stone, but being able to proactively shape it will help insurance firms profit and succeed no matter what is thrown at them.

Oliver Smith, Marketing Manager, slicedbread.

T

The phrase is also coupled with a notion that personal injury claims are in some way modern and that they arrived unwanted on our shores from across the Atlantic. Again, this is another of the great myths that those of us who genuinely seek to act in the best interest of injured people see on a daily basis.

The truth is of course that personal injury cases pre date the UK, the Magna Carta and the whole of modern civilisation and go all the way back to the 2nd book of the Bible. Exodus chapter 12 dedicates a whole section to the rules regarding such matters.

The law in this area has of course developed in this time, however the intention of the law in this area remains exactly as it is put in verse 19, which states “the guilty party must pay the injured person for any loss of time and see that the victim is completely healed”.

These principles are ones that the vast majority of people in the UK live by, including those acting for injured people, and they are the principles by which the insurers of those at fault for causing harm to injured people should live by. Except they don’t.

Insurers created and enticed fraud into the personal injury market.

Quick fix strategies like pre-medical offers and 3rd party capture encouraged the less honest citizens of the country to seek to cash in on these foolish strategies. Instead of realising that the error lay at their own door. However, the insurance industry went on the offensive and now, almost without exception, every person seeking to pursue a claim is treated like a fraudster.

Fraud and dishonesty in claims is wrong but the approach of using a sledgehammer to crack a nut that the insurers and their friends at Westminster are hell-bent on pushing is not the answer. Co-operation and trust between the professionals on either side is the way forward and things like the introduction of askCUE PI go some way to bridging the huge gulf that now exists between insurers, accident victims and their representatives. Much more still needs to be done to dig us out of the current trench warfare we are in though.

Scott Whyte, Managing Director, Watermans.

September 2016

Modern Claims 29

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EDITORIAL BOARD

The right to choose?

Understanding emerging risks

Do individuals maintain an unfettered right to choose their own lawyer?

Should insurers look into hiring from alternative talent pools to specialise in certain types of claims, and to help with the approach to emerging risks?

s an employment law solicitor, I am only too aware of the increasing challenges of funding legal claims. This problem has become more acute with the recent introduction of employment tribunal fees. One of the first things I try to establish is whether my client has Legal Expense Insurance (LEI). Clients will want to utilise such a policy as it usually covers legal and tribunal fees.

Prima facie, in light of the challenges individuals face in gaining access to justice, LEI trumps most other forms of funding. Sadly, one of the greatest challenges that we are having to surmount is defending our clients right to instruct a solicitor of their own choosing.

A

Most insurers have their own panel solicitors, and they are going to increasing lengths to ensure that cases remain in-house. I believe that it is fundamental for an individual citizen to maintain an unfettered right to choose their own lawyer. Why? • Local The ability to have a face-to-face meeting can be a very important factor for an individual, particularly in sensitive cases such as sexual harassment and discrimination. Other benefits of locality include the ability to carry out site visits, knowledge of local tribunals, and the characteristics of their Employment Judges.

• Knowledge Many firms offer clients a free initial consultation. As part of this process we take detailed instructions, consider the evidence, and begin applying the law to the facts of the case.

Through investment of time and energy, we have already gained considerable knowledge of the matter.

• Reputation Many clients come to us as a result of recommendations from previous clients. They want to use our services based on reputation and past performance. In addition, we are often recommended by organisations such as the Citizens Advice Bureau for our expertise.

• Conflict of interest Some clients are wary of instructing panel solicitors as they feel that there is scope for a conflict of interest in that the panel solicitors may have one eye on maintaining their valuable relationship with the insurer, possibly to their own detriment.

The law is clear that once proceedings start, policy holders have the right to choose their own solicitor. However, insurers are not doing enough to promote awareness of this principle. Our experience with some insurers, and their panel solicitors, has been met with frustration at every turn. This includes difficulty contacting the insurer/panel solicitor, being informed that our view as to prospects of success is wrong, receiving inadequate remuneration, and in some instances, being prevented from running cases on behalf of our clients.

ifferent insurers have their own definition of emerging risks. According to Lloyd’s, an emerging risk is defined as “an issue that is perceived to be potentially significant, but which may not be fully understood or allowed for in insurance terms and conditions, pricing, reserving or capital setting”.

D

Over the last few years we have witnessed an explosion in new technologies and products, which gives rise to new risks. We need to be smart and develop our understanding quickly, and certainly try to stay one step ahead of the game to prevent these potential risks from becoming threats.

The management and understanding of emerging risks should already be embedded into a business’s existing risk and governance framework. Once you have the insight, you will be able to profile and analyse these risks.

Although I can see the merit in hiring from an alternative talent pool for an injection of specialist knowledge, I do not necessarily think that’s the right approach. I think utilising your existing pool of resource can be developed into specialist areas, which will also benefit in the tailoring of existing product lines. A key factor is education in terms of the business, understanding its exposures, and underwriting of risk goes hand in hand with that.

There are core global emerging risks, which may be categorised as geopolitical, societal, economic, technological and environmental.

The most widespread emerging risk that springs to mind is cyber risk, which has arisen through the development of information technology and our ability to be connected 24/7. This has impacted the way in which businesses operate. Interconnectivity and globalisation have enabled cyber crime to spread and cost the global economy billions.

Cyber risk includes security breaches, extortion, terrorism, reputational damage and supply chain disruptions. It has become so very technical and complex.

Many insurance companies will face similar risk challenges and therefore will need to stay ahead of the curve by improving their own understanding of risk. I also believe close interaction and understanding of a business risk management framework is key to mitigation and opportunity.

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

As noted by the Judge in Maltez v Lewis (1999) “It has always been the fundamental right of every citizen to be represented by solicitors of his or her choice”. We must ensure that this right continues unfettered, as we face the increasing challenges of ensuring access to justice for our clients.

Steven Davies, Director & Solicitor, Three Graces Legal.

September 2016

Modern Claims 31

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EDITORIAL BOARD

Collateral lies and fraudulent devices: Claims managers beware

The Fraud Triangle

David Simon comments on the controversial judgement in the Versloot Dredging case, and how this signifies the modern approach to claims.

Some have argued the rise in fraud is a result of the existence of a ‘compensation culture’. How true is this image, and how is it likely to change in the coming years?

ugust 2016 sees the first legislative shake-up of insurance law for a hundred years with the coming into force of the Insurance Act 2015. It is ironic then that on the eve of this fundamental restatement of the law, with its drive for fairness and proportionality in place of safe phraseology such as “utmost good faith”, the Supreme Court has, in the last gasp of the old law, delivered a judgment, which controversially changes the accepted approach to claims which are tinged with fraud.

t doesn’t take much for someone to fear actual or possible financial pain. Take the recent Brexit news for example.

Some may say it won’t make any difference whilst others say it will make all the difference. Nevertheless, when people fear a possible pinch, the ‘compensation culture’ or as I call it, ‘the ISA mentality’ is born.

In 99% of fraudulent claims, there is one motive that stands tall – money problems. The other 1% is pure greed. This is what those who admit the truth actually tell us. And the numbers don’t lie. So let’s examine the ‘ISA mentality’. With an ISA, you invest and try not to touch it unless it’s necessary. Then, you drawdown against the ISA and sometimes take the penalties that go with the early drawdown.

Now let’s look at the insurance policy. You pay monthly premiums and applaud yourself for never having to use it. But you need cash. You tell yourself you are a good citizen as you have never had to claim previously. It’s not a crime as it’s just an insurer.

So you decide to drawdown against your policy. This happens on a daily basis and on more occasions than anyone realises. For psychologists like myself, Maslow’s Hierarchy all too clearly puts the art of survival as a primary need. And when you are desperate for cash, nature will undoubtedly kick in.

The Fraud Triangle explains that those with dire needs rationalise what they do, seek the best opportunity to do it and believe their motivation for doing so is valid:

A

Insurers have of course always been on strong ground when dealing with a claim that arises out of a fraudulently placed policy, or even one where the policyholder has made a valid claim but has exaggerated it a bit in a fraudulent manner. What happens however if a policyholder puts forward a valid claim but then (with the object of facilitating the passage of the claim) embroiders the story during the investigation stage? This is what happened in the recent case of Versloot Dredging.

The conundrum for the court was this: the claim would have stood up as falling valid within the defined policy cover were it not for the fact that the policyholder told the insurers a lie about one aspect of the background circumstances of the loss. Was the whole claim to be kicked out? After all there had been a lapse in the “good faith” to be shown to the insurers? Indeed, many insurers would have relied on the old fashioned terminology and contended that this was a “fraudulent device” and that they were entitled to reject the claim.

I

The Supreme Court rejected such old-fashioned notions. It said that “fraudulent device” was no longer a suitable concept in commercial insurance. It determined that the policyholder had indeed told a lie but that it was not causative of any loss or change of position by the insurer. It was, in the court’s words, a “collateral lie”, so that in spite of everything, the policyholder was entitled to succeed on the claim.

Claims managers of the old school may find this a surprising outcome, but it is clearly intended to give a modern slant to claims handling. Incidentally, the Insurance Act makes no difference as the topic is not covered.

David Simon, Chairman, Triton Global.

As this is a very true image, the market is still not clear on what solutions can stop this. The only way we can is by investing in those who contribute to the beginning of the claims lifecycle, with claims triaged fairly yet stringently.

If I am honest, I feel the fraud problem over the coming years will actually test us far more than it does now, rather than lessen our current pains. That’s my prediction based on recent UK market and benefit changes.

It will therefore be more crucial than ever to have the right partners in place to catch it before it severely affects your business performance. And that’s where I-COG’s approach is worth its weight in gold!

Tara Shelton, Chief Executive Officer, I-COG Claims Management.

September 2016

Modern Claims 33

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EDITORIAL BOARD

Only a matter of time

Cyber, a risk like any other?

To what extent can Artificial Intelligence (AI) be utilised in the legal sector? Are there any examples of AI being used today and will it eventually take the place of lawyers?

Keith Tracey explains why thorough understanding and assessment of cyber risk can provide defence against its unknown nature.

he progress of AI is particularly relevant to the claims market, not least as the Online Court project is well underway, bringing closer the reality of lower value civil claims being moved out of the courtroom. Already we’ve seen the introduction of a new online ‘plea’ facility for traffic offences, saving valuable court time by reducing the number of court sessions. But AI is not just about saving court time, it’s about saving lawyers time.

T

CMSs will continue to take care of the standard paperwork side of things, but AI can speed up the more laborious aspects of handling an injury case – like telling a lawyer which pages of medical records contain references to pain, spine, or similar groups of words so as not to miss anything (even allowing for typos).

AI could also be used to evaluate medical outcomes on a scale that ensures expert opinions are so statistically accurate that challenges to their conclusions become futile. AI could then read the pleadings from each side and predict the outcome based on results of other cases while accounting for litigation risk.

AI will never replace the need for lawyers in PI and clinical negligence law, something we’re keen to stress. We’re not replacing lawyers, but developing software to make your job easier and more profitable. The human side of a lawyer’s role in a serious injury claim is what most do the job for. For Claimant lawyers, making a difference isn’t all about the level of damages secured, but about helping an individual through a traumatic time in their life. This requires empathy and trust.

As thought leaders in technology for injury claims, we are exploring technology for the claims settlement process. In the future, could agreed compensation be based on data from other cases evaluated by AI in a fraction of a second? Once investigations and evidence gathering are complete, could the outcome be predicted by a machine?

I believe that the injury claims market is more suitable than most for greater use of innovative technology and is being driven down this route quicker than other sectors in the profession, not least because of fee pressures. Technological advancements are already happening which make the claims process easier and faster. It’s only a matter of time before the entire negotiation and settlement process for a large proportion of injury cases is taken online.

echnology is changing the way services are delivered in the legal profession. Cyber and technology risks are regularly seen in surveys as being in the top five threats.

These are unavoidable risks. I would suggest that cyber is like any other risk and the same approach is required. Risks are rooted in a firm’s culture and practices. A conventional risk management approach looks at the risks, how they might manifest themselves, their likelihood and consequences. This line of thinking is also appropriate for cyber.

T

There is however an unknown nature to cyber: it is less clear what could go wrong. Technology is not understood in the way that other risks are and can deliver some unpleasant surprises.

Risk management thinking is evolving. Prevention and firewalls are where it all started. Detection is now regarded as absolutely vital, response has always been crucial. And then we come to prediction. Accessing threat intelligence enables you to position yourself to predict what could go wrong and permits a focused approach to risk management.

Identifying key information assets and classifying the data are crucial. There is a school of thought that you cannot protect everything, so it is vital to identify what is really important and make sure you protect that. Access controls are part of the response. Human error is a key area and a frequent source of loss.

So one task is to increase the level of awareness.

It is important to decide where on the risk management continuum you need to be. There are clear benefits from having a reasonable and defensible position to address any issues that arise with regulators, clients, and to protect your reputation. Having a written response plan that has been tested and examined by a third party, with the full support of management, is crucial.

Clearly there needs to be a balance between IT security and the operation of the business. Going too far can potentially curb operations. Cyber security can be relatively expensive compared to other risk controls so there are also budget issues.

Finally consider insurance. In the risk management profession we define the difference between uncertainty and risk. Risk is something we know about, have thought about and possibly quantified. Uncertainty is when these steps have not been taken.

Keith Tracey, Managing Director, Aon Risk Solutions.

Mark Hewitt, Managing Director, Rebmark Legal Solutions.

September 2016

Modern Claims 37

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EDITORIAL BOARD

The Millennial Market

The ‘buts’ of Brexit

oday’s high property prices, difficulty getting mortgages and university bills to pay means the needs of Millennials and their lifestyles are very different to other generations.

In a survey1 of 18-34 year-olds, we discovered that mobile phones are Millennials’ most valued possession, yet almost half (48 per cent) admit their phone isn’t insured. They simply aren’t switched onto traditional insurance as in its current format it doesn’t meet their needs, with the main reasons they state including:

Following the post-Brexit Cabinet reshuffle, do you see the reforms proposed by the Chancellor in the Autumn Statement being postponed or modified in any way?

T

• Millennials are more interested in access than ownership – for example, streaming music is mainstream; • They have fewer possessions - however the possessions they own they really care about; • They value their experiences – especially holidays and festivals; • A full home contents insurance policy isn’t really what they require, or a number of separate policies which cover different things.

When asked about insurance more generally, just one third (32%) of 18-34 year-olds deem it as necessary, which shows that the majority don’t see how it’s for them. Rather than the industry’s current ‘take it or leave it approach’, there’s lots we can learn. Millennials -‘the Spotify Generation’ - have a different attitude to life and the industry needs to create propositions specifically for them. That’s precisely why we launched Back Me Up, custom-made insurance for just £15 per month, via an app, with users able to switch possessions in and out whenever they want, as well as leave whenever they want, with no penalty fees and charges to pay.

We also designed and built Back Me Up in partnership with the very people who’ll use it - young, independently minded people who find insurance ‘a reluctant purchase’ and ‘overpriced’.

Our research also found that more than 4.3 million (33 per cent) take part in action sports overseas, yet almost 2.3 million (18 per cent) still jet off without any travel insurance. Millennial travellers are constantly looking for new ways to push the boundaries when they go abroad. With this in mind, Back Me Up also includes UK and World Wide travel insurance.

With Millennials wanting to protect the things they value, as well as travel experiences they enjoy, the time is right to help them understand the value of cover that’s on their terms. Let’s give them the power to decide on what to insure – not the other way around.

Visit www.backmeup.co.uk for more information.

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Back Me Up was conceived and developed in partnership with a ‘Millennial panel’ and is powered by Ageas Insurance Limited.

‘N

o, but; yes, but” is my “Vicar of Dibley” style answer.

No, because the fact that the reforms were introduced by the 2015 Autumn Statement endows them with a status almost akin to an election mandate.

The No, however, is followed by a number of “buts”.

But number 1: The people have changed post Brexit: we have a new Chancellor and a new team at the MoJ. But number 2: The political priorities have changed and the Government has a new chief focus. Further, Brexit will inevitably suck resource, affecting the work capacity of both politicians and civil servants at the MoJ. But number 3: This one is more complicated. Oliver Heald QC, the minister who now has responsibility for this sector, will no doubt receive a civil service briefing. It will inevitably deal with the facts that there are a number of proposed reforms and that they come from different sources and may not be entirely interlocking. On the one hand there are the former Chancellor’s reforms (increase small claims limit, reform whiplash general damages), where the implementation date has usually been given as 2017, and on the other hand there are the plans to digitise the courts and put them online, where the timeline is more like 2020. There is a conundrum here and it arises from the fact that the former Chancellor’s reforms will impact a high percentage of all personal injury claims.

At face value, these reforms will mean a major downturn in the use of both MedCo and the Claims Portal and a major upturn in business for the small claims court, from litigants in person, several years before the online court goes online. (Oh, and Briggs LJ did not envisage the online court dealing with personal injury.)

So, if you add all the Buts together, Yes, might be a logical conclusion to the headline question. But number 2 above has, undoubtedly, contributed to the delays to date and will probably cause further delay. Further, But number 3 might, alone, be grounds for suggesting that there will be modifications to the proposed reforms prior to implementation.

But (to qualify the Yes) it would surely be a mistake to assume that these reforms are going to go away. A direction of travel has been established and the likelihood is that there will be more change coming down the track.

Tim Wallis, Mediator and Solicitor with Expedite Resolution, Trust Mediation and others.

Study undertaken by Opinium Research on behalf of Back Me Up, 10 -14 June 2016 amongst 2000+ UK adults.

1

Paul Lynes, MD, Back Me Up.

September 2016

Modern Claims 39

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EDITORIAL BOARD

Life after injury innovation in prosthetic limbs and the technology behind this ith over 45,000 people relying on lower limb prostheses and 4,000 amputations carried out each year in the UK alone, the need for innovative prosthetic limbs is ever increasing. Recent developments in prosthetic technology are enabling more amputees to return to a life as independent and active as possible.

W

The replication of natural motion is at the heart of Blatchford’s design philosophy and Linx represents the beginning of the development of intuitive and integrated prosthetic limb systems, specifically designed to improve the lives of amputees.

Blatchford has recently been awarded the MacRobert Award by the Royal Academy of Engineering for its Linx prosthetic limb.

Established in 1969, the prestigious MacRobert Award is regarded as the leading prize recognising innovation in UK engineering.

Linx is the world’s first fully integrated, microprocessor-controlled lower limb system. Amputees frequently experience back pain, difficulties on various terrain and require a higher cognitive and energy demand as they plan and analyse each and every step.

The ground-breaking technology found in Linx shares information continuously between the foot and knee to adapt automatically to changing terrains and circumstances, allowing users more freedom, confidence and stability.

The Linx prosthetic limb has 4 central processing units and 7 sensors to collect data on the user, activity, environment and terrain. Linx has 3 message streams acting simultaneously, with a total of up to 700 messages per second being transferred at any given time. With over 100 different types of data to share between knee and foot, Linx will adjust over 2,000 times per day, depending on activity.

Linx has also been awarded The British Healthcare Trade Association (BHTA) Product Innovation Award. The BHTA is the UK’s oldest and largest healthcare trade association, comprising almost 500 companies who make or sell healthcare and assistive technology products.

The Linx is available through the Blatchford Clinic. To find out more, please visit blatchford.co.uk/private-clinic Mark Ledger, Principal Prosthetist, Blatchford Clinic.

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Stop the Small Claims limit rise James Maxey shares his views on why a rise in the Small Claims limit will fail to achieve the government’s objectives, and will only serve to block access to justice for genuine claimants. he Doctors Chambers Modern Claims Conference 2016 took place on 15th June 2016. Readers will be universally aware of the Government proposals to end the right of individuals to claim compensation for what they define as minor whiplash injuries and increasing the Small Claims limit for personal injury matters to £5,000. The Modern Claims Conference was one of the first opportunities that both sides of the debate had come face to face in open discussion on the topic.

T

The morning session started with a keynote address from the Rt. Hon Jack Straw who provided a scathing attack on Claimants in personal injury cases and their solicitors. The former Justice Secretary quipped that, “whiplash is an innovation of fertile legal minds which has no real foundation in medical knowledge.

Everybody knows that the vast majority of whiplash claims are completely unjustified. I support any measures to eliminate soft tissue injuries”.

I find Mr Straw’s claims that whiplash is essentially the brethren of Claimant personal injury practitioners to be quite preposterous.

A whiplash injury is defined in the World Health Organisation’s International Statistical Classification of Disease and The Related Health Problems 10th Revision (ICD-10) as a sprain and strain of the cervical spine. It is a well-recognised medical injury, certainly not one born by lawyers.

Mr Straw continued that he would “ban whiplash as a basis of claims unless the Claimant was able to positively prove that they had sustained serious injuries”. I would suggest to Mr Straw that this is exactly what Claimants who sustain whiplash injuries do when they present medical evidence from a neutral medical expert to Defendants, their Insurers/Solicitors and the Court. Mr Straw’s comments did nothing but show how out of touch he is with the current legal market, but probably earned him a few pints from his mates at the Association of British Insurers (ABI).

I use the rest of this article to analyse these arguments and question the evidence put forward by the ABI.

Fraud

One of the principle arguments put forward by the Conservative Government and the ABI for the proposals to increase the Small Claims limit and remove the right to general damages for minor whiplash claims is that they say it will cut fraudulent claims. By the ABI’s own admission, they suggest that 7% of motor claims in 2011 were fraudulent. The Government proposals of a blanket ban on claims for general damages in minor whiplash claims would affect 93% of genuine Claimants who had been injured as a result of an accident that wasn’t their fault.

The above figure of 7% of cases being fraudulent quoted by the ABI is flawed to say the least. The ABI include what they define

44 Modern Claims

The ABI and Government’s proposals for a 500% increase have been nothing more than cherry picked from thin air with no independent thought as to what a reasonable and sensible approach to increasing the limit would be as suspected fraud within this figure, even if no proof is ever produced that an individual case is fraudulent. The Access To Justice Group, recently established to fight the Government’s changes, believe quite rightly that cases should only be defined as fraud where there is a conviction, Police caution or a Judge has so ruled when adjudicating on a claim in Court.

One of the biggest problems in relation to fraud is the insurance industry’s use of pre-medical offers. The only way for a Claimant to prove their injuries is through medical evidence and the use of pre-medical offers stops a Claimant from fully being able to prove their case. If the insurance industry is serious about combating fraud then they should test a Claimant’s allegation of injury in every single case.

There are of course robust measures in place within the Court process, most recently involving the introduction of the terms “fundamental dishonesty” and its ability to trump QOCS provisions in personal injury cases. The Courts are therefore well equipped to deal with fraudulent cases and the current system of testing the evidence at trial could be better utilised by the insurance industry if they suspect fraud rather than settling cases without testing the evidence and later labelling it as suspected fraud.

Cost

One of the major attempts by the ABI to garner public support for these proposals is that both they and the Government say that it will reduce car insurance premiums by £40 to £50 per policy. In fact, this figure that the Government often quote is taken directly from an ABIs’ consultation documents, hardly to be considered neutral.

Readers will recall the ABI hailing that LASPO would cut the cost of motor insurance significantly. However, using the ABI’s own figures, since the introduction of LASPO in the second quarter of 2013 average motor insurance premiums have in fact increased from £412 to £427 in the fourth quarter of 2015.

No doubt there will be a similar effect if the Government’s proposals are brought in.

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The campaign group Access to Justice (A2J) has done a fantastic job at collating the evidence to show that the reasons provided by the Government and the insurance industry for the changes is nothing more than farcical Number of claims

An oft sighted suggested effect of the Government’s changes is that it will cut the number of personal injury claims made to stem what the ABI believe to be constantly increasing pool of personal injury claims that needs to be stopped in its tracks before it swells even further out of control. This is nothing but nonsensical and completely against current trends in relation to the number of personal injury cases being brought. Despite the ABIs assertion that personal injury cases are on the rise, between 2012 and 2014 the number of personal injury claims made fell by 1.3%.

The changes created by LASPO are still bedding in and I would suspect that claims will continue to fall year on year for the foreseeable future, as the changes properly affect the market.

Small Claims Limit Rise to £5,000

Unsurprisingly the ABI are entirely supportive of the Government’s plans to increase the Small Claims Limit in personal injury cases to £5,000, even commenting that they believe that the limit should be increased to £10,000 but can “accept” the £5,000 suggested by the Government. The main argument they forward in relation to this is that the limit was set in 1991 and hasn’t been revisited to take into account inflation since.

Claimant personal injury practitioners are not oblivious to this argument. It is of course understandable that there may well be a good reason to increase the Small Claims limit to take into account inflation. However, the ABI and Government’s proposals for a 500% increase have been nothing more than cherry picked from thin air with no independent thought as to what a reasonable and sensible approach to increasing the limit would be.

Since 1991 inflation has increased prices by 105.12%. This means that in relation to the Small Claims limit, a fee set at £1,000 in 1991 should now increase to £2,051.22. The Government proposals are 5 times this level and no-one proposing or supporting this level of increase has provided any justifiable reason for the proposal.

Politicians and the ABI seem to be forgetting exactly why the Small Claims limit for personal injuries was set below that of other types of money claims. Personal injury cases are inherently more difficult to prove and a Claimant is required to present expert evidence to comment on the injuries that they have suffered. A Litigant in Person cannot possibly be expected to understand and draft the intricacies of a letter of instruction to a medical expert. Further, I find it highly unlikely that medical experts across the country will open their doors to instructions from Litigants in Person and many Litigants in Person will simply not have the upfront cash to fund an appointment with a medical expert and the cost involved in him drafting a report. This will effectively stop access to justice to millions of people who are injured across the country.

September 2016

Brexit and the Future

With the vote that took place on 23rd June 2016, it brought about the demise of the main champions of these changes, David Cameron and George Osborne.

Theresa May seems to have signalled that going forwards the Government will place greater value on what’s important for ordinary people rather than just the corporates and I hope that her Government will honour that commitment. The delay in this process caused by Brexit may just have given an opportunity for further debate and perhaps a bit of compromise on both sides of the debate so that the interests of genuinely injured Claimants can be looked after.

Conclusion

The Government and the insurance industry’s proposals brought in through the back door, to remove the ability for innocent injured parties to claim compensation for “minor” soft tissue injuries, together with the proposals to increase the Small Claims limit for personal injury claims to £5,000, is a real threat to ordinary people up and down the country.

The type of case we typically see below £5,000 might involve, say a couple of weeks off work and soft tissue injuries giving pain over anything up to a couple of years or so. To be honest I can see how to some people with secure jobs, perhaps with long periods of sick pay allowed for under their contracts, could categorise this as minor. In the real world though what I see is clients who are told by the agency if they’re ill not to come back. Even a couple of weeks or so out of work can put them behind with the rent and snowball into them having to leave their flat and put pressure on their family relationships. In the real world for the average Joe, £5,000 is not small.

Practitioners who deal day in day out for the rights of injured people will continue to campaign for the changes to be dropped.

The campaign group Access to Justice (A2J) has done a fantastic job at collating the evidence to show that the reasons provided by the Government and the insurance industry for the changes is nothing more than farcical. The information collated by A2J can be found at accesstojusticeactiongroup.co.uk and I would encourage readers to visit the website and support the campaign.

James Maxey is Managing Partner at Express Solicitors.

Modern Claims 45

FEATURES

Sector Soapbox

Modern Claims’s panel of resident associations outline the burning issues facing the claims sector.

Unreal injuries and unnecessary claims? n my recent holiday I had time to reflect upon the possible impact of two opinions that have grated with me for some time. First, there were the inflammatory comments about lawyers by Jack Straw at the Modern Claims Conference in Manchester in June. Lawyers didn’t invent whiplash. It is a genuine injury that can cause significant pain and loss of amenity with the most severe cases lasting in excess of 18-24 months. Anyone who has been unfortunate enough to have suffered from whiplash will strongly testify to its pain and debilitating effects.

Straw, however, said in clear terms that hundreds of thousands of people, their legal representatives, physiotherapists and medical experts are lying. That they have and are still committing fraud and perjury. He is also saying that hundreds of judges have been duped. He is either severely and willfully mistaken or he is quite simply lying. History will of course judge Mr. Straw’s honesty and integrity on a range of matters and the early signs are not good.

The second and more troubling comment was the introduction of the concept of “unnecessary claims” by former Justice Minister Lord Faulks. Without providing any definition, he potentially opened the

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door for the government to sweep aside centuries of legal rights, not just in PI claims but across the legal spectrum. Should it be challenged, it is for the courts to determine the merits of a claim, not a civil servant attempting to draft a workable definition of “unnecessary”, nor indeed a politician to legislate away our rights.

The difference with the comments by Jack Straw is that whilst I fundamentally disagree with Lord Faulks, it is an opinion.

Now Lord Faulks has departed from the MoJ, the folder marked whiplash and personal injury will be passed on to a new minister – or spokesperson, once the confusion over who has responsibility for civil justice is resolved. It may be wishful thinking to suggest that the MoJ will see sense and decide not to proceed with the package of measures announced by the former Chancellor and actively promoted by Lord Faulks. But that is what they should be doing, focusing on a range of practical measures to combat fraud, many of which were suggested by the Insurance Fraud Taskforce and the CMC Review. The concept of ‘unnecessary claims’ will hopefully have departed the building with its proponent.

Susan Brown is Chair of the Motor Accident Solicitors Society (MASS).

Whatever Happened To Utmost Good Faith?! ell…Insurance Act Day came and went and pretty much like with the Brexit vote the sun still rose and the sun still fell and life went on, save for the commentary from a variety of quarters as to how life would never be quite the same again and everything was now different.

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In insurance terms, it is hoped the balancing of the relationship between insurer and insured will bring more certainty to the desired outcome of an insurance contract, but inevitably the uncertainty surrounding its implementation due to the absence of established case law precedent naturally leads to uncertainty.

type of scenario, but whilst we must respect the court decision, we must also preserve the moral balance between insurer and insured, as whilst the insurer is required to provide a fair settlement, the insured should be confident that the principles of the new Act should not require collateral lies to bring about that result. So whilst the new precedent seeks a more proportionate response, it may increase trust in our sector, provided that genuine fraud can be avoided.

But just when the market seemed to be establishing a position as to how to deal with this fundamental change, enter stage left Versloot Dredging v HDIGerling and a case which references the Insurance Act 2015 in advance of its commencement and the advent of a new concept: collateral lies.

The Judge makes reference to the fact that the precedent only applies to the general common law position and insurers could expressly deviate from this position in their policies when they are in a position to review their wordings. However, a deviation from the common law position, which would involve inserting a condition that would entitle an insurer to decline a claim following the use of a fraudulent device, is likely to be held to be a deviation from the Insurance Act 2015, particularly given the express reference to the Act in the judgement.

Some have suggested the ruling to be “a blow for honest customers”, and that “lies are lies”. Many within the insurance market will agree with this sentiment, and would lead to many asking the question; whatever happened to utmost good faith?

So, in summing up Insurance Act Day, the sun still rose, life went on, but it is hoped that the balance will be achieved. In setting common law precedent to support the Insurance Act 2015, it is hoped that future judgements do provide this sought after balance.

In reality, this judgement perhaps provides clarification to an area where the FOS have previously been sympathetic to consumers in this

Andrew Gibbons ACII, Managing Director, Mason Owen Financial Services Ltd and Chair on behalf of BIBA of the Industry Claims Working Group.

46 Modern Claims

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FEATURES

Government needs to keep foot to the floor on claims reform pedal ord Justice Briggs in his final report acknowledges that he was “perhaps over-simplistic” in assuming injury claims below the anticipated new Small Claims Track limit of £5,000 would fall to be dealt with by the Online Court. He now thinks claimants should be able to choose whether to take advantage of the Online Court “if they were otherwise forced into the Small Claims Track and therefore deprived of legal representation” or alternatively, were it available, some sort of adapted RTA Portal.

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The Government announced in last year’s Autumn Statement that it wanted to increase the Small Claims Track limit and remove general damages for low value soft tissue injury. But there seems to be uncertainty about where the Government’s reforms will lead. Many stakeholders agree that simply increasing the Small Claims limit for personal injury claims is not the answer. It seems clear that the courts, as they are currently resourced, simply would not be able to cope with the increase in Small Claims trials. Moreover, there seems to be an acceptance by compensators that it will be expensive for them to handle small injury claims brought by litigants in person in the Small Claims Track. Much, of course, will also depend on the extent and effect of the Government’s plan to remove the right to

general damages for low value soft tissue injuries. The two reforms are interlinked. If as a result of removing the right to general damages the number of claims is significantly reduced, increasing the Small Claims Track limit may cause fewer problems.

What seems to be emerging is a consensus that a new prelitigation process, perhaps based on the RTA Portal process, is needed for injury claims within the Small Claims Track limit. It was always clear the introduction of an Online Court would be some way off. 2020 has been suggested as a possible start date but with significant funding and IT development being necessary, this may prove optimistic. Even if a pre-action process can be agreed and implemented for litigants in person there is still the issue of what happens to claims that are not resolved within that process. The Government has said it wants to introduce its further whiplash reforms by next year. There is therefore some urgency and the Ministry of Justice will have to move quickly and decisively if the Government’s reforms are to go ahead on time.

Duncan Rutter, President of the Forum of Insurance Lawyers (FOIL) and Partner at DAC Beachcroft LLP.

Insurers are a key part of the Government’s ambitious plans for autonomous cars t’s easy to be cynical about ‘driverless cars’ and wonder why they are suddenly so high up the political agenda.

After all, a recent survey by the Institute of Mechanical Engineers found that only 21% of people would actually be comfortable getting in one of them.

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So, why are the Government already consulting on the role of insurers in ‘The Pathway to Driverless Cars’?

Well, firstly, it is important to be clear about what this consultation really covers. We remain a long way from a family car that doesn’t even need a steering wheel. But, Volvo have already announced that their ‘Drive Me’ project, which will allow the driver to check emails or read a book on the motorway, will begin trials on UK roads in 2017. Amusingly, one of the reasons they chose Britain was that they wanted to see how their systems reacted to heavy traffic – probably the first time London’s terrible congestion has actually been a bonus for the economy.

Therefore, the ABI has been working closely with Thatcham Research and the insurers on our Automated Driving Insurance Group to think about how insurers should react when these cars come on to the road, which may happen as early as 2021. Settling some of these questions now and establishing the broad legal framework should give confidence to investors and, equally importantly, drivers.

September 2016

We don’t believe a radical change is needed. Initially, these cars will only be in autonomous mode on the safest roads and anyone still driving a traditional car will expect fellow road-users to have the same insurance requirements as they do. The priority is to ensure any third parties involved in an accident know exactly who to approach about making a claim. It will also be vital to ensure that ‘disengaged’ drivers are not unfairly blamed for an accident that isn’t their fault.

There are some technical questions to resolve. In particular, insurers need confidence that, when an accident happens, they can access data to confirm whether the car was in automated mode – so claims can be settled quickly without long-running disputes over where fault lies.

But, none of these issues will be insurmountable. It is clear from our discussions that insurers are keen to play their part in encouraging the use of a technology that has the potential to significantly reduce the number of people killed or injured on the roads.

Ben Howarth, Policy Adviser, Motor & Liability, Association of British Insurers (ABI).

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FEATURES

Supply Chain Temple of Resilience Professor Richard Wilding explains why it is in every organisation’s interest to build its own Temple of Supply Chain Resilience, in order to ensure sustained competitive advantage into the future. n March 2011, an earthquake and tsunami hit the northeastern coastline of Japan. Honda, Toyota, Nissan and Subaru all had plants in or close to the affected region, and were forced to close them.

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But worldwide, other automotive plants – both Japanese and non-Japanese – were also forced to stop production, because of damage and disruption to tier 1, tier 2 or tier 3 suppliers’ plants. From electronics equipment to paint, and from engines to gearboxes, huge numbers of components turned out to be sourced from Japan and its intricate supply chains. Worse, many of these were single sourced — often not just to a single company, but to a single plant within that company.

Call to action

For insurance professionals, dealing with such events is part and parcel of the job. But there’s another, less obvious lesson to learn.

Which is that supply chains are relatively unregarded – until they fail, and break down.

At which point, commercial consequences invariably kick in. Lost sales. Lost production. Disappointed customers. Additional costs.

Reputational damage.

And the insurance industry isn’t immune. It too has supply chains, and it too faces those same commercial consequences.

Look closely, and those supply chains are a complex network of organisations: insurers, brokers, the policyholder, the client (who may or may not be the policyholder), solicitors, loss adjusters, contractors – who must all work together.

And the better they work together, the lower the overall cost of that supply chain, and the quicker and more efficiently claims will be resolved. In the best case, clients will be thrilled by the ease of the claims process they encounter, and the support they receive at what may be a difficult time – thus creating long-term customer loyalty.

But likewise, as with any other industry, the insurance industry’s supply chain is exposed to risk and disruption. Critically, for instance, the ‘handovers’ between the supply chain’s various organisations are often a source of risk and failure, critically impacting the outcome for the ultimate customer.

And when considering supply chain risk, remember that ultimately, competition is not between individual companies offering insurance, but between the supply chains that they each manage and co-ordinate.

So how best to make supply chains more resilient? A conceptual framework that I call ‘The Temple of Supply Chain Resilience’ can help. Here’s how it’s built.

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Apple and fashion firm Zara certainly stand out as businesses with supply chains perfectly aligned to their own—very different—business strategies The Foundation of Effective Supply Chain Strategy

Supply chain resilience is built upon the ‘foundation’ of an Effective Supply Chain Strategy—in other words, the operational execution of the business mission, through the supply chain. So managers need a clear understanding of the business mission, both in the context of the competitive strategy of the business, as well as the markets within which it operates.

This calls for four things to be aligned with the business mission: supply chain processes, the supply chain infrastructure (including where facilities are located, and what equipment is used), the supply chain information systems, and finally the supply chain organisation itself.

Examples of this in practice? Fairly clearly, Apple and fashion firm Zara certainly stand out as businesses with supply chains perfectly aligned to their own—very different—business strategies.

Product Design for Supply Chain

Next comes the ‘floor’ of Product Design for the Supply Chain.

Here, the message is simple: Don’t design additional risk into your products! So during the product design process, ensure that the implied supply chain is considered.

How are different parties supposed to communicate? How is information to be shared? What information is to be collected?

What technology choices exist? In the insurance of vehicles being shipped on ocean-going car transporters from overseas assembly plants, for instance, Tokio Marine Claims Services has invested in a paperless process that drastically cuts delays and disputes.

By applying such principles, and asking questions during the design stage, it often turns out that simple modifications can greatly increase the resilience of the supply chain for that product.

As an example, post-tsunami, Nissan and Toyota have altered their product development processes, specifically to capture greater opportunities for resilience through such devices as dual-sourcing and supplier selection.

The first pillar: Supply Chain Collaboration

Look at businesses which have survived major disruptions to

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The agile supply chain needs to be able to adjust output quickly to match market demand—or post-disruption supply constraints—and switch rapidly from one variant to another their supply chain, and you’ll typically see effective Supply Chain Collaboration in action.

One of the best examples of this again comes from the automotive industry. When a fire in 1997 devastated the premises of Toyota’s supplier of brake master cylinders, Toyota vehicle production halted across Japan. 20 other suppliers then re-tooled, set up juryrigged production lines, and trained workers to make the parts.

Vehicle production restarted three days later.

The second pillar: Supply Chain Design and Engineering

To maximise supply chain resilience, it is important that supply chain risk management is integrated into the design of the supply chain.

The logic: a supply chain that has simply evolved over time will not be as resilient as one in which network design principles have consciously been applied to balance efficiency against redundancy.

In practice, Supply Chain Design and Engineering involves making conscious decisions about such things as where inventory is held, how much inventory is held, the desirability of alternate sources of supply, supplier development in order to reduce risk, and postponement – right along the supply chain.

Again, the tsunami has taught valuable lessons. Merck—the owner of a Japanese factory that was the world’s sole source of an automotive paint pigment—has set up of a duplicate production line in Germany.

The third pillar: Supply Chain Risk Management Culture

A business’s internal culture has an impact on its supply chain resilience—both in terms of mitigating against risk, as well as dealing with disruption once it has occurred.

In short, when contemplating a given action, it’s useful to ask: “How will this action impact on the risk profile of the supply chain?

Will it make us more vulnerable to disruption to events? Will it make us better able to cope with disruptions?”

But such a Supply Chain Risk Management Culture doesn’t occur by accident, and needs encouragement. Assigning formal responsibility for supply chain resilience, and the creation of ‘supply chain continuity teams’, can also help.

During the September 2000 fuel crisis, brought about by striking tanker drivers, supermarket chain Sainsbury’s was able to activate a team of supply chain contingency planning experts, thereby enabling it to cope better than its peers.

The fourth pillar: Agility

To reduce the overall risk of a supply chain—and to increase its resilience—an element of supply chain Agility is clearly vital. The trick lies in achieving the required level of agility.

Agile supply chains not only need to be network-based, but they also need to be market-sensitive, with highly integrated virtual and critical processes. What’s more, if they are to respond in ever shorter time-frames to both volume and variety changes, agile supply chains need to synchronise both supply and demand.

Finally, the agile supply chain needs to be able to adjust output quickly to match market demand—or post-disruption supply constraints—and switch rapidly from one variant to another.

sourcing giant Li & Fung. During the 2011 Thai floods, it was able to seamlessly switch textile production from Thailand to China— sometimes in as little as four hours—thus minimising the impact on its Western fashion chain customers.

Supply Chain Transparency

Straddling these four pillars is a requirement for Supply Chain Transparency. Simply put, transparency of what is happening within the supply chain system is critical to risk mitigation. When everyone knows what is going to happen—and confidence increases because of this transparency—then trust develops between all the players in the supply chain.

Transparency can be gained by a variety of initiatives, and by the application of appropriate technology. Just as international freight carriers such as Fedex and DHL offer ‘track and trace’ capabilities, insurance supply chains should know the status of every single claim.

Continuous Monitoring and Intelligence.

Finally, overarching all of this is a need for Continuous Monitoring and Intelligence. While Supply Chain Transparency provides a window into what is happening within the supply chain, Continuous Monitoring and Intelligence puts the supply chain in context, gathering data on both local and world events. If a natural disaster makes the news, for instance, an effective Continuous Monitoring and Intelligence process helps to ask the question “How will this impact on my supply chain?”

That said, Continuous Monitoring and Intelligence doesn’t happen by accident. Intelligence needs to be gathered, and an effective process put in place so management can review and act quickly on this intelligence, in order to mitigate supply chain risk. Again, collaboration with supply chain stakeholders helps to make this happen.

As an example of best practice, consider BMW, which has digitally mapped the location of every first, second and third-tier supplier, overlaying on this picture a number of data feeds on weather, natural disasters, and political and economic risks. When something happens, the company can instantly see if it might be affected or not.

Conclusion

Competition, remember, is no longer between individual companies but between supply chains. And resilient and riskminimised supply chains will compete more effectively than supply chains that aren’t.

Which is precisely why it is in every organisation’s interest to build its own Temple of Supply Chain Resilience, in order to ensure sustained competitive advantage into the future.

Richard Wilding OBE is Professor of Supply Chain Strategy at the Centre for Logistics & Supply Chain Management, Cranfield School of Management.

Richard Wilding is Professor of Supply Chain Strategy at the Centre for Logistics & Supply Chain Management, Cranfield School of Management. Cranfield works with companies from all sectors on supply chain development initiatives.

Web & Contact: www.richardwilding.info & www.cranfield.ac.uk/som/lscm

And as an example of the art of the possible, consider global

September 2016

Modern Claims 49

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The benefits of collaboration in complex claims Carolyn Mackenzie explains how a linear approach to complex claims may not be sufficient, and outlines why insurers should seek collaboration in order to get the best result for the customer. he traditional approach to claims handling is often linear.

Both insurers and solicitors can be guilty of approaching complex cases by working through a series of steps without always applying sufficient thought to the desired outcome and how to get there quickly and effectively.

At RSA, we have found that by taking a collaborative approach we can explore more innovative solutions and speed up resolution of claims at no greater cost, whilst delivering what the customer or claimant really needs and wants. This approach also facilitates early and more accurate estimating which, together with shorter claims lifecycles, can assist with pricing and reduce the required capital held against outstanding liabilities.

An initiative that involves purchasing a property for a seriously injured claimant is a perfect example of how collaboration can lead to innovation. The question sometimes arises as to how to facilitate provision of suitable accommodation for a relatively short duration in a way that does not provide betterment or a windfall to the estate, in accordance with the law under Roberts v Johnstone (1989).

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A thorough and collaborative approach

In one such case, the injured claimant was a 76 year old gentleman who sustained a spinal injury, rendering him tetraplegic. There were no liability issues in the case. Because of the extent of the claimant’s injuries and his pre-existing heart condition, his rehabilitation and care needs were particularly complex. Early dialogue took place between all parties to find ways of maximising his functional independence and RSA made interim funds available from an early stage to fund rehabilitation. Unusually for a case of this complexity, RSA, our solicitors DWF and Irwin Mitchell for the claimant, were also able to agree joint instruction of a specialist spinal cord injury consultant and early disclosure of other reports, with regular updates from the treating team to keep all parties informed.

The claimant required single storey accommodation adapted to meet his specific needs and was keen to return home as soon as possible. RSA agreed to purchase and adapt a suitable property for the claimant and to fund the running costs in return for a peppercorn rent. Upon the Claimant’s death, the property will revert to RSA. The case settled for a combined lump sum and periodical payment at the end of 2015, 2 years post-accident.

Whilst a solution like this is specific to the particular facts of a case and will not be viable in every instance, it demonstrates that through a collaborative approach and early intervention the parties can work together to deliver an outcome more quickly and in a way that puts the claimant at the centre of the process.

Collaboration is a two way process. It requires the parties to be open and have a genuine desire to find effective and pragmatic solutions A two way process

A collaborative and outcome-focused approach can be equally valuable in significant property damage cases. In May 2014, a fire occurred at the Glasgow School of Art housed in the Charles Rennie Mackintosh building. The property is category A-listed and one of Glasgow’s most iconic landmarks. Part of the west wing was destroyed, including the Mackintosh library, and parts of the east wing were smoke damaged.

RSA worked closely with the customer, loss assessor and heritage authorities to save as much of the original fabric as possible and to outline a programme of reinstatement estimated to take 3 years. From the outset, the Glasgow School of Art was fully committed to restoring the building in line with Charles Rennie Mackintosh’s original vision and we supported GSA in ensuring it could fulfil this commitment. A schedule of works was agreed and the European tendering process run to select suitably experienced and qualified firms.

Broad ranging discussions with our customer highlighted their desire to take this opportunity to enhance the functionality of the building as a leading establishment for creative education and research. Those discussions led the parties to agree an early settlement payment allowing the client to progress restoration in the way that best suited their needs and without the need to agree each stage of works with insurers. Ultimately the restoration is likely to take a number of years but the client can now forge ahead with the comfort of having their insurance funds in the bank already.

Collaboration is a two way process. It requires the parties to be open and have a genuine desire to find effective and pragmatic solutions. Sometimes disputes within a case mean that an adversarial process is unavoidable, but as far as possible, working together to explore solutions that are proportionate and put the claimant or customer’s needs at the centre of the process can be a win/win for all parties.

Carolyn Mackenzie, Complex Claims Director, RSA.

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Time to stop hiding away The Ministry of Defence must show leadership from the top and face up to its responsibilities, says Hilary Meredith. he long awaited Chilcot report has now been published - as has the Government’s response to the groundbreaking ‘Beyond Endurance? Military exercises and the duty of care’ report.

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Chilcot makes it clear that our troops were sent to war with poor equipment. To its shame however, the MoD is attempting to escape responsibility for putting our servicemen and women in this position by extending the scope of combat immunity to cover procurement of equipment back in Whitehall.

This is clearly wrong and must not be allowed to happen. Combat immunity is there to protect military operations when thinking is impaired in the heat of battle. It cannot relate to procurement decisions back at Whitehall where corners have been cut, and our soldiers have been placed in danger in an attempt to save money. Following Chilcot, there are already indications that the international courts will be looking for issues of abuse of war crimes by the British military.

Leadership is needed

The MoD can now bury its head in the sand and hang our soldiers out to dry or it can step up to the plate and show some leadership.

Responsibility must come from the top. While any potential war crime should be thoroughly investigated, the MoD should stand behind those accused and offer a framework of support. Those who have served feel deserted by military top brass who fail to offer support.

Depressingly, we are already aware of misleading guidance given to our soldiers by the chain of command - with our servicemen and women then abandoned when accused of wrongdoing. It has to be wrong that many cases of abuse are fuelled by promises of a fat cheque to the so called Iraqi civilians with legal fees paid for by our taxpayers’ money via the legal aid board. Our military personnel on the other hand are given no funding for independent lawyers to represent them.

The persecution of our soldiers has to stop. The Al-Sweady inquiry has already exposed the smearing of British soldiers, with false claims that they murdered and tortured innocent Iraqis. Chilcot is an opportunity for the MoD to put out a statement to the world we support our troops, stand firmly behind them.

When it comes to accepting responsibility, the MoD has a poor track record however.

The MoD is still policing itself with no proper sanctions when things go disastrously wrong Hilary Meredith, CEO at Hilary Meredith Solicitors Ltd, gave evidence to the Beyond Endurance Inquiry which earlier this year recommended that the MoD should be stripped of its historic immunity from prosecution when personnel are killed during training as a result of a serious failing in its duty of care.

Hilary Meredith Solicitors also represented the father of Corporal James Dunsby at the Inquest into the death of his son and two other SAS trainees (Lance-Corporal Edward Maher and Lance-Corporal Craig Roberts) who died from heat exhaustion on an endurance march in the Welsh Brecon Beacons, resulting in the Parliamentary Inquiry.

sanctions or heavy fines and lessons would be learnt. The MoD admits itself that these circumstances would be few and far between so what does it have to fear? Why should the MoD be any different from any other large corporation when such terrible mistakes have been made?

While I welcome the implementation of the Defence Safety Authority formed on 1st April 2015, it does seem as if it is too little too late after the disastrous consequences of Brecon Beacons where three army reservists lost their lives.

I also welcome the Duty Holder concept where the MoD is holding to account their own in charge of design and delivery of training.

However there is still no acceptance of responsibility at the top from the MoD as a corporation.

It is encouraging that moves are being made to reduce climatic injuries in the armed forces. However, the MoD has changed the Armed Forces Compensation scheme so that anyone suffering climatic injuries has to fund the cost of an independent neurological report. These reports can cost up to £2,500 each and the cost has to be met by the victim.

Taking responsibility?

It is also good news that at last the MoD will provide the next of kin with unredacted copies of the Service Inquiry report following the fatality of a loved one. Hopefully this will mean the full, accurate circumstances leading up to a death will be known from day one rather than coming to light at the Coroner’s Court.

Sadly, it comes as no surprise that yet again the MoD is trying to wriggle out of responsibility for failings so grossly negligent they result in manslaughter. Only modest amendments to the Corporate Manslaughter Act 2007 would be required to ensure in such rare circumstances the MoD as a corporation would face

Ultimately however, the MoD is still policing itself with no proper sanctions when things go disastrously wrong. Why will it not accept corporate responsibility?

The Government has recently published its response to the ‘Beyond Endurance? Military exercises and the duty of care’ report - rejecting proposals to reform the military exemptions in the Corporate Manslaughter and Homicide Act 2007.

52 Modern Claims

Hilary Meredith is CEO at Hilary Meredith Solicitors Ltd.

September 2016

FEATURES

Investing in the future Saraya Fawcett explains the many benefits using a recruiter who specialises in insurance can bring to a company and its workforce.

G

rowing your business by acquiring new talent

Increasing your workforce with fresh talent boosts confidence and morale as existing staff observe investment in their department as the business continues to grow. We are witnessing many successes where flexible clients consider candidates with transferable skills. For example, a Liability Claims Department that I was retained to recruit for now has a very highperforming team that continues to flourish! Despite some initial resistance from the Board, staff members have come from varied backgrounds, including insurers, brokers, loss adjusters and legal firms - they really are a force to be reckoned with. Bringing in new talent affords a business a fresh perspective, and with that comes varied experience from different organisations, with potentially more effective and efficient working methods to take advantage of.

I understand, especially in the claims market, that if there is no budget to recruit it generally means no new talent can be acquired.

With the relationships we build with our clients, we strive to be as consultative as possible, which includes speculative approaches in senior/niche talent areas that we genuinely believe would be an asset to your business, by way of experience and behaviours that we know to be vital. We build a business case for the management board, including facts and figures, to show that whilst there is an additional cost involved, their talent is worth more.

Retaining existing staff

I’m sure it comes as no surprise that when staff feel valued and appreciated it reduces their need to look outside of their current organisation. We are all motivated by different things, so feeling valued and appreciated differs in meaning from one employee to the next. The main factors that we hear from candidates as to why they are seeking alternative employment include, but are not limited to: salary/bonus/package, lack of career progression, limited promotion opportunities, no work/life balance, lack of financial support for professional qualifications, and the elephant in the room, poor managers/management. The term ‘war for talent’ is now becoming more frequently used, and it’s very real. If you feel that an employee is excellent at their role, tell them and invest in them, because if you don’t someone else will. The wider market is aware of the industry stars, and competitors will pull out all the stops to bring them on board. We know of clients with impressive staff retention levels that are dedicated to listening to their employees and actioning feedback. Many carry out regular anonymous employee surveys to tackle any potential issues or frustrations.

The term ‘war for talent’ is now becoming more frequently used, and it’s very real. If you feel that an employee is excellent at their role, tell them and invest in them, because if you don’t someone else will on new assignments, or indeed, registering a new candidate. Using this specialist and personalised service frees up valuable time and gives peace of mind to clients, as they only receive relevant applications.

Just as importantly, candidates are only submitted to relevant roles that they are capable of fulfilling. It is no coincidence that most of our business is gained via recommendations from existing clients who recognise that our straightforward approach makes all the difference.

With a genuine interest in long-term, mutually beneficial working relationships, we are certainly not in this for quick wins!

The complexities of recruitment

The claims market remains buoyant; even after the scaremongering of Brexit, we are pleased to report that we’re not experiencing a reduced level of vacancies or candidates.

However, there will always be those circumstances outside of our control that result in a longer, more complex process when it comes to sourcing the ideal candidate. Factors such as vacancies in remote locations with minimal insurance activity, or perhaps a specific or niche skillset that is thin on the ground, can all have an impact. Over the last 18-24 months, we have witnessed more northern-based claims functions ramping up their recruitment drives to create ‘centres of excellence’, thus effectively replicating Head Office or London-based roles. However, this presents its own unique challenges due to the required experience for these specialist roles not being readily available in the North.

Saraya Fawcett is Claims, Risk & General Insurance Senior Recruitment Consultant at Aston Charles Ltd.

Benefits of using specialists

Here at Aston Charles, our entire General Insurance Team have all worked within the insurance market prior to turning their hand to recruitment. Each Consultant has their own specialism, and I focus purely on the Claims and Risk market, having done so for over 5 years.

Within this time, my network of clients and candidates has grown at an exponential rate, allowing my knowledge to consistently improve – I never stop learning! In addition, I attend networking events, seminars, and also a range of different Insurance Institute Lectures across several Councils, to keep abreast of the latest trends and changes in case law.

Being a claims expert allows me to ask the right questions when taking

September 2016

Modern Claims 53

FEATURES

The growing importance of calibration as more manufacturers invest in ADAS Tim Camm, technical manager at National Windscreens, highlights the implications for the aftermarket industry. s technical manager for National Windscreens, I am often asked what is the biggest change facing the industry and, for me, there is only one answer: ADAS and the growing need for calibration.

You may be asking what is ADAS and why does it matter to me? Well, more and more vehicle manufacturers are using Advanced Driver Assistance Systems (ADAS) to ensure their vehicles meet the highest European safety ratings. However there is significant concern at the lack of consideration manufacturers have given to the maintenance of these systems, even in their own dealer networks. It is clear that vehicle manufacturers need to start talking to insurers and the aftermarket without delay.

Changes were made to Euro NCap 5 star rating for safety early this year meaning any new vehicle wanting to be granted this rating has to include two separate ADAS systems with Autonomous Emergency Braking (AEB) and Lane Departure Warning (LDW) being compulsory.

This is causing a welcome increase in the use of ADAS which makes our roads safer for all – in fact 10 of the leading vehicle manufacturers have already committed long-term investment in them.

The ADAS systems constantly monitor the environment around vehicles and provide alerts to avoid collisions or even take over control of the vehicle where a driver has failed to identify a potential danger.

A

But how does it work and why do I need calibration?

Well, most of the ADAS systems that are becoming increasingly popular use forward-facing cameras found on or around the vehicle’s front windscreen. If the camera is not correctly calibrated, after a windscreen replacement for example, then the ADAS systems will not work correctly.

The issue of ADAS camera calibration is here and now. 10% of vehicles are already fitted with ADAS systems. National Windscreens has already undertaken over 1,000 calibrations and the numbers are growing rapidly.

The vast majority of vehicles require calibration in workshop conditions and National Windscreens is unique in providing 108 fitting and calibration centres throughout the UK. We have invested over £1 million in ADAS calibration and are working with Hella Gutmann, the ADAS calibration equipment manufacturer, to ensure latest vehicle data is always available. Our objective is to allow motorists to drive away after just one visit to their local fitting centre with the assurance that work has been carried out to the required safety standards.

Windscreen mounted cameras also add to the number of windscreen models that are available for the same vehicle, adding to the complexity of selecting the correct glass for the job. National Windscreens have solved this with a unique piece of software, ‘Partscheck’. This identifies the exact piece of glass needed and if it has a windscreen-mounted camera fitted.

ADAS will continue to grow rapidly in the future – in fact, recent figures anticipate that by 2020 more than 40% of all vehicles on

September 2016

More and more vehicle manufacturers are using Advanced Driver Assistance Systems (ADAS) to ensure their vehicles meet the highest European safety ratings UK roads will have at least two types of driver assistance systems fitted. It is imperative that any workshop carrying out automotive glass work is calibrating correctly and providing a certifcate to prove it.

There are important questions to be answered Is the driver aware that their vehicle has ADAS? Are they aware the camera needs calibrating after replacing the windscreen? Is the vehicle dealer aware?

Calibration can be done in 4 ways: using a handheld diagnostics machine (dynamic); using a full floor standing diagnostics machine (static); dynamic and static combined; and vehicle “self” calibration. There is NO one system for every vehicle manufacturer.

Does the dealer, bodyshop or glass replacement company have calibration equipment?

Without clear answers the continued safe operation of ADAS systems may be in jeopardy.

National Windscreens has worked with Thatcham Research on developing a code of practice designed to help tackle these issues.

Issued in July 2016, the code of practice determines the calibration process, specifies the advice to be given to customers (pre and post-windscreen replacement) and requires the issue of a successful calibration certificate. If calibration is not successfully completed the motorist must be advised that ADAS may not be relied upon. This is a big step forward but there is still much to do to ensure the whole industry is reacting appropriately to this latest technology.

ADAS also poses important questions for insurers For vehicles fitted with ADAS systems will premiums and excess levels increase or reduce? Improved safety is expected to reduce claims value but how does this compare to the increased cost of repairing or replacing damaged ADAS equipment? Who will meet the cost of calibration? Will it be necessary to introduce approved calibration providers? Will mandatory calibration be required and with what frequency?

National Windscreens is now undertaking research programmes to tackle these questions. If you would like to be kept informed please email Barry Donaldson, Business Development Director at National Windscreens, bdonaldson@nationalwindscreens.co.uk.

Tim Camm is Technical Manager at National Windscreens.

Modern Claims 55

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CASE STUDY

Gotelee Solicitors selects Proclaim Case Management to benefit from immediate process enhancements ull-service Suffolk law firm, Gotelee Solicitors, is implementing the Law Society Endorsed Proclaim Case Management solution from Eclipse Legal Systems.

integration with the Land Registry Business Gateway (LRBG) to allow the Conveyancing team seamless access to the Gateway directly from the Proclaim desktop, as well as enhancing the risk control element by using Proclaim’s integration with the online service, Lawyer Checker.

The leading firm offers a full range of legal services and has a reputation for its professional work and its personal approach with a broad range of clients, from individuals and families to companies and local authorities.

In addition, the Personal Injury team will have access to the MoJ’s RTA and EL/PL Claims portal via a seamless Applicationto-Application (A2A) method, enabling staff to manage claims entirely through the Proclaim desktop.

Gotelee will be implementing ready-to-go Proclaim Conveyancing and Personal Injury Case Management systems enabling both departments to experience immediate process enhancements.

“Having researched the legal software market for some time, we came to the solid conclusion that Proclaim was the best placed solution, enabling us to take full advantage of new process and efficiency gains. Additionally, the sheer scope of Proclaim integrations will ensure we consistently provide a high quality and transparent service for our clients.”

F

Darren Gower

Alistair Lang

Furthermore, the firm will benefit from Eclipse’s exhaustive list of readyto-go integrations with a variety of complementary third party providers.

Gotelee will take advantage of Proclaim’s

Alistair Lang, Chief Executive Officer at Gotelee, comments:

For further information, please contact Darren Gower, Marketing Director at Eclipse Legal Systems, part of Capita plc, via darren.gower@eclipselegal. co.uk or call 01274 704100. Alternatively, visit www.eclipselegal.co.uk

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13/10/2016 14:04

10 MINUTES WITH

Roger Coleman Q A

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

The answer lies at least in part in the question. I qualified in 1982. At that time no-one would have dreamed of describing what we do as an industry. We were (and I like to think still are) a profession. I began working in insurance claims in 1984, and was fortunate to be at the vanguard of the legal expenses insurance business as it grew exponentially throughout the 1980s and 1990s.

When I qualified in 1982 there were 54,697 solicitors on the roll, of whom 42,984 had practicing certificates. In 2015 there were 168,226 solicitors on the roll of whom 133,367 had practicing certificates.

Between 1982 and 1992 numbers on the roll increased by 38%.

Between 1992 and 2012 the number of solicitors more than doubled.

Prior to 1984 solicitors were not allowed to advertise. Legal aid was available to pursue personal injury claims, no-one had ever heard of claims management companies and the only Clementi anyone had heard of was the former governor of Hong Kong. The first stirrings of change can be traced back to 1989 and a series of green papers produced by the then Thatcher government which challenged the privileged status of the profession. Over the following 20 years the changes brought about by a succession of legislative provisions, commencing with the Courts and Legal Services Act in 1990 and culminating in the Legal Services Act 2007, which introduced Alternative Business Structures, have led to the environment where the various interested parties in the insurance claims process have been able to work more closely together and a claims industry has been able to emerge and flourish.

At what point did personal injury claims become an industry rather than an area of practice? Arguably from December 2003 when the Law Society (which was then in charge of the regulation of solicitors) relaxed the ban on referral fees and permitted solicitors to share fees with third parties. Such practices undoubtedly went on prior to that date, but only on a limited and covert basis. The formal relaxation of regulation paved the way for a whole new cohort of intermediaries to enter the claims process.

Q A

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

Change has had both positive and negative impact in our area of the market. The relaxation of restrictions on the solicitors’ profession has undoubtedly improved access to justice for consumers and led to innovative ways of service delivery. However, the substantial influx of new solicitors into the market, coupled with the introduction of third party intermediaries whose primary role is to generate and introduce work, has led to considerable competition, with consequent impact on margin and pressure on the quality of service delivery. Ironically this is one area where competition has not benefitted the consumer because the cost

Some of the excesses of the less reputable sectors of the industry have tarnished the reputation of personal injury solicitors, the vast majority of whom provide an excellent service for deserving and needy clients savings driven by increased efficiency and competition are not passed on to the consumer who, with the exception of postLASPO success fees, still does not largely pay for the service.

It is also true that some of the excesses of the less reputable sectors of the industry have tarnished the reputation of personal injury solicitors, the vast majority of whom provide an excellent service for deserving and needy clients.

Q A

Who inspires you and why?

My inspiration has come from both within and outside the profession. I was fortunate to work closely with the senior management of Swinton Insurance as that business grew fourfold during the 1980s, and their now long-retired chairman Ken Scowcroft was my earliest business inspiration. Studying for an MBA under Professor Stephen Mayson in the early 2000s as the storm of change was reaching its crescendo was a huge influence on how we positioned the business to thrive in a changing environment.

Visionaries such as Professor Richard Susskind ensure that we continue to look to the future at the same time as looking after the day job. Finally, at the risk of sounding sycophantic, my own business partners Janet Tilley for her tireless work with MASS over the years and considerable influence at the CJC and MOJ, and Greg Cox for his ground-breaking work on costs.

Q A Q A

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

I have had advice and support from a huge number of people throughout my career, but I have never had a mentor as such.

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

Retired! A long time ago I set myself the objective of retiring when I was 55, but somehow when the time came I couldn’t quite let go.

Roger Coleman is Integrations Director at Simpson Millar LLP.

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58 Modern Claims

September 2016

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