Modern Claims Magazine - Issue 2 by Charlton Grant

Linking the Industry Together

July 2013 | Issue 02 | ISSN 2051-6495 Ben Fletcher, Insurance Fraud Bureau, talks to Modern Claims about collaboration in the fight against fraud and the rise of ghost brokering. Fraud data sharing: A lack of best practice over the sharing of fraud data using exemptions in the DPA is hampering efforts to combat fraud. But that’s about the change, writes Ant Gould.

“Sausage machines and client care don’t fit together, service has to go - I know people won’t agree with that” Andrew Twambley, Amelans Modern Claims Magazine | July 2013 | Issue 02

Tim Oliver Parabis Group “I predict there will be no more than half a dozen defendant law firms within the next 18 months” Charlton Grant

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Introduction

elcome to the second issue of Modern Claims which - I’m very happy to report - is published on the back of a wave of positive pan-sector reports on the success of issue one, launched in May this year for the claims industry. There’s no rest for the wicked however, as we ran headfirst into this issue; packed with even more expert columnists, including the ABI, more insurers, defendant and claimant law firms, costs specialists and assessors. This means we can offer a true helicopter view on the industry, bringing the word on the street / claims department / court room to your desk. Although we’re not quite at a point to review the impact of LASPO and the Jackson reforms, the Legal Services Act has led to a high turnaround of business planning for claims-oriented businesses - namely the rise of the personal injury ABS and the move towards Joint Ventures to handle non-fault insurance work. One of those defendant ABSs is the Parabis Group, which specialises in professional services mainly to the insurance and travel industries; from law and loss adjusting / claims handling to recruitment, health and safety and management consultancy. But for Tim Oliver, Chief Executive of the Group, it is scale as well as depth of expertise that insurers are looking for in the bid to support their quickly diminishing claims departments and off-set risk to collaborators. He predicts (see pages 15-17) that this will lead to the defendant lawyer market contracting as few struggle to compete with legal entities which are able to attract investment for process (Parabis Group is a Duke Street investment) and keep costs to a minimum. Having said that, some insurers saw the 1st April 2013 deadline to focus pre-planned process and IT infrastructure

investments in line with the new regime, to maximise the skill and capacity of their in-house claims department in the future, rather than downsize and outsource. NFU Mutual is just one of those looking to future-proof its department in line with reform to date and the forthcoming portal expansion, as Matthew Scott details on page 59. Finally, with fraud one of the biggest contentions in the claims arena, the way in which the industry is moving to collaborate on data sharing across the piece is a fairly new focus for the Insurance Fraud Bureau (IFB) with the ABI, MASS and APIL leading the discussions from the claimant lawyer perspective. Ben Fletcher, Director of the IFB told me that brokers are also working more closely with the IFB to identify and prosecute a fast-growing area of insurance fraud - ghost brokering (see pages 49-51). A frightening prospect for the general public, insurers, lawyers and experts involved in the process as this sophisticated type of organised crime not only dents the pockets and reputation of each part of the industry but, in some cases, leads to fatality. As Ant Gould, CII, explains on pages 7-8, there are new taskforces in place to ensure that the data and investigative work of the IFB is used effectively by insurers, brokers and perhaps one day, the legal sector, to help fight fraud.

My thanks go to all readers for their feedback and the Modern Claims team welcome your feedback, opinion and project news. Emma Waddingham, Chief Editor Email me @: emma.waddingham@charltongrant.co.uk or visit the website www.modernclaimsmagazine.co.uk

Modern Claims Magazine

Issue 02 – July 2013 | ISSN 2051-6495

Project Director Kate McKittrick

Chief Editor Emma Waddingham

Head of Events Julia Todd

Events Manager Charlotte Parkinson

Production Lindsey Thomson-Heley

Accounts Director Karl Mason

Editorial Department Charlotte Parkinson

Interview Editor Bippon Vinayak

Advertising Rachael Pearson

Design Richard Berry

Contact t: 01765 600909 e: info@modernclaimsmagazine.co.uk w: www.modernclaimsmagazine.co.uk

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

MC // July 2013

Contents

CONTENTS 03-08 Intro & THE News 07 Ant talks news

A lack of best practice standards over the sharing of fraud data using exemptions in the DPA is hampering efforts to combat fraud according to the CII’s Claims Faculty new generation group. But they have a plan, writes Ant Gould.

11-17 The INTERVIEWS 11 Interview with... Andrew Twambley,

Amelans/InjuryLawyers4U

Emma Waddingham talks to the Managing Partner of Amelans, which also owns InjuryLawyers4U, about tough marketing decisions, the ‘killing off’ of the sector and when it’s ‘OK’ for a PI firm to be the butt of jokes.

15 Interview with... Tim Oliver,

Tim Oliver is Group Chief Executive of the Parabis Group, speaks to Emma Waddingham about the impact of change on insurers and the change of mindset required to make the most of expected Portal Expansions.

19-43 The Opinions

21 The tide has turned for ‘frivolous claims’ ABI

21 Siren voices threaten effective reform

Rod Evans, Forum of Insurance Lawyers

22 Are niche services possible in the

modern claims process?

Ashley Potter, DWA Claims Ltd

22 Is the sector moving fast enough

in the bid to share information on fraudulent claims? Donna Scully, Carpenters

23 Use your expert wisely

Robert Kelly, Acorn Assessors

23 Is the Mesothelioma Bill being run

by an Insurance led body better than nothing? John Latter, Zurich

25 Evolution or revolution?

Michael Nixon, Interest Ltd

25 Referral Fees in new clothing?

Andy Watson, Ageas

27 How is the insurance sector combating fraud?

20 The Mesothelioma Bill: better than

BIBA

27 Alternative Dispute Resolution.

nothing or a complete solution?

20 Cooperation is key in the fight

against fraud

Craig Budsworth, MASS

Peter Horton, LV= Insurance Tim Wallis, Expedite Resolution

28 Are niche services possible in the

modern claims sector?

Alan Nesbit, Nesbit Law Group

Editorial Columnists Alan Nesbit Catherine Smith Managing Partner Operations Director Nesbit Law Group & Chairman, ARC Wolf Law

Jim Toole Operations Director First Response Law

Nik Ellis Managing Director Laird Assessors

Robert Kelly Key Account Manager Acorn Assessors

Alan Strange Underwriting Director LAMP Group Limited

Chris Gough Consultant Mills & Reeve Craig Budsworth Chair, MASS & RTA Partner, Glaysiers

Paul Fox UK Head of Claims at XL Global Services XL Group

Rod Evans President FOIL

Andy Watson Chief Executive Ageas

John Latter ACII Director of Technical Centre, UK Claims Zurich Insurance plc

Andy Whatmough Director S & G Response

Darren Gower Head of Marketing Eclipse Legal Systems

Keith Crosier Managing Engineer Legal & Technical Assessors

Peter Horton Chief Operating Officer - GI LV= Insurance

Ant Gould Director of Faculties Chartered Insurance Institute

David Williams Managing Director, Underwriting AXA Insurance

Matthew Scott Chief Claims Manager NFU Mutual

Peter Parry Managing Director Independent Accident Investigations

Anthony Hughes Chief Executive Horwich Farrelly Solicitors

Dez Derry CEO MMA Digital

Ashley Potter Director DWA Claims

Donna Scully Partner Carpenters

Bippon Vinayak Chairman & CEO Doctors Chambers

Emma Bell Director Clifford James

MC // July 2013

Matthew Waterfield Head of Legal Development Simply Lawyers Michael Davidson Head of Strategy & Sales Goldsmith Williams Solicitors Michael Nixon CEO Inter-est Ltd

Peter Revell Partner and Head of Technical Costs at Meruit Costs Lyons Davidson Richard Clark Director Xuber Richard Forth Managing Director Forths Forensic Accountants

Sarah Hill Partner Berrymans Lace Mawer Tim Wallis Mediator, Solicitor, Director Expedite Resolution Tony Rand Managing Director Vamco Ltd & Kingsley Law Ltd Tony Walton Managing Director Questus Zoe Holland Managing Director ZEBRA Legal Consulting

Contents

45-62 The Features

29 The cost of legal expenses.

Jim Toole, First Response Law

29 The rising trend of Claims Fraud.

Sarah Hill, Berrymans Lace Mawer

47 Brand Loyalty in the over 50’s – Is it

possible?

Laurence Kelly, CEO, The Ostrich Group

31 Is improving technology enough to

49 Interview with... Ben Fletcher,

energise claims departments? Nik Ellis, Laid Assessors

31 Claims focussed ABSs.

Alan Strange, LAMP Group Limited

33 Is culture a barrier to processing

claims more effectively?

Michael Davidson, Goldsmith Williams

33 Can’t hear you, can’t hear you.

Richard Clark, Xuber

David Williams, AXA Insurance

35 High Risk Areas.

Paul Fox, XL Insurance

36 Are niche services possible in the

Emma Waddingham speaks to the Director of the IFB, to understand its role in fighting fraud in the claims industry and what next steps are being taken to move towards a more collaborative working model with the wider claims industry, not just insurers. Don’t move now and you’re dead. Tony Walton’s dramatisation of a man on the edge in legal sector might seem a bit far-fetched but for those sticking to the ways of old and failing to embrace what customers really want, is he really far off the mark?

modern claims process?

Keith Crossier, Legal and Technical Assessors Richard Forth, Forths Forensic Accountants

Dez Derry asks claimant lawyers to be honest and reassess often misdirected, stale and unmeasured marketing efforts, in a bid to help entities make the most of the fast pace of change and increasing consumer need for support and guidance in the claims process.

37 The post Jackson era.

56 A net with big holes.

38 Unexpected consequences?

59 Claims Agility.

Peter Revell, Lyons Davidson Catherine Smith, Wolf Law

39 Changes to Business since Jackson

and LASPO.

Zoe Holland, ZEBRA Legal Consulting

39 Is the sector moving fast enough

to share information on fraudulent claims?

Peter Parry, Independent Accident Investigations

Chris Gough, Mills & Reeve

40 Medical report fee uncertainty Is

the MRO Agreement (MROA) in jeopardy?

Dr Bippon Vinayak, Doctors Chambers

43 The rise of solicitor client

negotiations?

Anthony Hughes, Howrich Farrelly Solicitors

Tony Rand, Vamco Ltd and Kingsley Law Ltd Investments into operational cost control and capacity in the claims arena isn’t simply within the confines of the legal team as insurers are looking to maximise their claims ability and agility, as Matthew Scott reports.

60 Game, Set and Match for the Claims

40 Is improving technology enough?

55 Be honest.

36 Advertising = Claims Farming?

Insurance Fraud Bureau

53 Can’t change, won’t change?

35 Striking a balance.

Industry?

Modern Claims attended the annual I Love Claims conference at the Ricoh arena in Coventry, to get the low down on all the latest updates and thoughts from industry thought leaders in the claims sector. Charlotte Parkinson, Modern Claims, reports.

62 5 minutes with...

Craig Budsworth, Chair of the Motor Accident Solicitors Society (MASS)

62 Energising Claims departments.

Darren Gower, Eclipse Legal Systems

43 Is improving technological

process enough to energise claims departments? Alan Cottrill, Commercial Director, Trak Global Solutions

62 MC // July 2013

ACORN ASSESSORS CONSULTING AUTOMOBILE ENGINEERS

Ant Gould talks news

Share and share a-like

Making fraud data sharing add up A lack of best practice standards over the sharing of fraud data using exemptions in the Data Protection Act is hampering efforts to combat fraud according to the CII’s Claims Faculty new generation group. But they have a plan, writes Ant Gould.

Quantifying the unknown Measuring fraud is of course a very difficult thing to do as you are dealing with unknowns, but wherever the industry looks it always seems to find it – from the highly organised ‘crash for cash’ motor scams to opportunistic individuals. Central to the insurance industry’s response to detecting and combating fraud has been greater sharing of data. Not only between insurers but with other bodies, with this data sharing contributing greatly to the successes recorded by the Insurance Fraud Bureau1 and Insurance Fraud Enforcement Department. It was no surprise therefore when this year’s CII Claims Faculty New Generation Group, which first met in the autumn, decided to focus its ‘making a difference’ project on the issue of fraud. After much debate in workshops it settled on something that one of the team, David Clements, Motor Investigations Manager at Zurich had witnessed firsthand – namely the apparent misuse of section 29.3 of the Data Protection Act. Cutting the Act open One avenue open to insurers and legal representatives looking to benefit from sharing data across organisations is to use section 29.3 of the Data Protection Act (used to share information for the prevention and detection of crime) however the group understood anecdotally that section 29.3s were not bringing the benefits they could due to a mixture of over and misuse. The group, who only have a year to deliver the project, quickly split themselves into smaller teams to understand the problem and identified that there was no accepted market best practice for the use of section 29(3) requests. These requests are essentially requests for information

designed for the prevention and detection of crime – a situation that has resulted in a huge volume of routine requests, which, due to the volume and often poor quality, are often ignored. This was not the intention of the Act and serves neither party - let alone policyholders - well. The group believes that it is this lack of clarity and agreement on when to use Section 29(3) requests, that has driven the high volumes of requests in the profession, with many of them being ‘non-compliant’ and adding little value to counter fraud investigations. At the core, there is a lack of consistency between organisations as to how to present their requests, and as to what makes a ‘compliant’ request. This leads to confusion as organisations cannot understand why their requests are not being responded to. As all firms, insurers and solicitors alike, are keen to work together to help combat fraud, this lack of ability to share data effectively is the cause of many frustrations. A lack

“As all firms, insurers and solicitors alike, are keen to work together to help combat fraud, this lack of ability to share data effectively is the cause of many frustrations. A lack of clarity as to what makes a compliant request also leads to unsustainable levels of requests being made, having an adverse affect on resourcing.” of clarity as to what makes a compliant request also leads to unsustainable levels of requests being made, having an adverse affect on resourcing. The group also found that many organisations do not centralise or even collect management information on Section 29(3), making it difficult to quantify the scale of the problem. The need for collaboration The group has spent the last six months talking to insurers, solicitors and suppliers and found a huge variance in process, volumes, timescales and response rates. Jenny Neale, Risk Manager, Ecclesiastical, speaking on behalf of the group said: “Our stakeholder questionnaire told us that there were over 21 000 requests going out per year, and that was across just 10 of the organisations who

MC // July 2013

1. See pages 49-51 for the Modern Claims interview with IFB Director, Ben Fletcher.

ombating and detecting fraud is a major focus for those working in the insurance industry, for those that regulate insurance and for consumer groups who ultimately pick up the tab. Insurance fraud is now adding, on average, at least an extra £50 a year to the annual insurance bill for every UK policyholder.

Ant Gould talks news

The CII Claims Faculty New Generation Group 2013

The CII Claims Faculty New Generation Group 2013 project team Graham Stait ACII Claims Training & Development Manager, Allianz Jenny Neale ACII Risk Manager, Ecclesiastical David Clements Dip CII Motor Investigations Manager, Zurich Nigel Fryer ACII Claims Project Manager, NFU Mutual Martin Kilshaw Cert CII Commercial Intermediary Claims Relationship Manager, Axa Helen Taylor ACII Large Injury Claims North Unit Leader, RSA William Talbot Dip CII Liability Adjuster, SLS, a Crawford Company Ryan Spies Dip CII Technical Claims Consultant, Direct Line Neiha Chohan Dip CII Claims Adjuster, Atrium Underwriters responded. A large number of these requests just aren’t dealt with, and even when they are the response time to these requests varied anywhere from a week to 12 weeks.” Reasons for not responding were all themed around insufficient details and no justification for why the information is required or how the data subject to linked fraudulent activity, all indicative of insufficient understanding and control. Ryan Spies, Technical Claims Consultant, Direct Line, added: “All of our stakeholders believe that the current use of Section 29(3) has led to lost opportunities to counter financial crime. What should be a tool to help us has become a hindrance.” Having identified and detailed the problem, the group is now focused on delivering a solution as part of their wish to use their year together to really make a difference to the industry. Martin Kilshaw, Commercial Intermediary Claims Relationship Manager at Axa, explained: “Through collaboration and consultation with insurers, solicitors and suppliers, we want to deliver an industry protocol which sets out when and

MC // July 2013

“All of our stakeholders believe that the current use of Section 29(3) has led to lost opportunities to counter financial crime. What should be a tool to help us has become a hindrance.” how Section 29(3) should be used, along with agreed templates for the sharing of data and agreed timescales for response. We also want to create supporting best practice for the implementation and maintenance of the protocol and a training suite on the Data Protection Act, use of Section 29(3) and the protocol. “So far we have had a lot of excellent support and feedback from insurers, law firms and suppliers. We held a workshop in June at the CII’s headquarters which was attended by over 20 key stakeholders - this support is vital in getting a broad range of ideas.” He added: “Our aim is to agree a set of protocols that can be adopted across the industry and we are confident that on the back of this workshop, and the volume or firms represented, we can achieve this.” Perfecting the process Having presented their findings to the CII’s Claims Faculty Board, chaired by Ecclesiastical’s David Bonehill, the group is now in the process of writing and fine tuning their protocol with a view to an industry wide launch in the autumn. The group, all of whom have worked on this project in their spare time as part of the CII’s annual New Generation programme, are well on track to meeting their aims of producing a best practice guide and having an agreed protocol amongst insurers and suppliers to ensure compliance, quality and timescales are met for sharing data, with a view to improving the process and ultimately to help prevent fraudulent claims (and save genuine customers money through reduced premiums). For more information on the project contact: ant.gould@cii.co.uk Ant Gould is the Director of Faculties at the Chartered Insurance Institute (CII) www.cii.co.uk

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Andrew Twambely Interview

Interview with... Andrew Twambley Emma Waddingham talks to the Managing Partner of Amelans, which also owns InjuryLawyers4U, a national network of lawyers in the field of personal injury (PI), about tough marketing decisions, the ‘killing off’ of the sector and when it’s ‘OK’ for a PI firm to be the butt of jokes.

Q A

Is the InjuryLawyers4U panel closed for good after it was reopened in November 2012 and what kind of investments are going into the brand over the next 12 months? The panel is closed for the foreseeable future. In light of the new claims landscape we were looking to create bigger buying power and increased investment power. We have that but I’m keeping it back until the feeding frenzy in ELPL claims – prior to the Portal expansion – has calmed down. Then we’ll know where to apply resources.

Q A

Will the entrance of big brands and joint venture ABSs featuring household names in the claims market hit the sector as quickly as it’s feared or is there still mileage in ‘brand lawyer’? The phrase revolving ABS, for the best part of eight years, has been ‘Tesco Law’ but that’s not happened. Tesco and many other brands are being sensible, watching, waiting to see what happens. They haven’t come in yet but there’s been plenty of activity in the marketplace. The problem is that profit levels in the field of PI are slow and small so why would they want to get involved? There has been, instead, a shift towards solicitors’ own brand ABSs, alongside insurer / solicitor joint venture ABSs. In terms of the solicitor brand, of course it still has mileage. The trick is to make potential clients think of you before anyone else, you can’t just rely on ‘brand solicitor’.

Q A

What has been the hardest or most successful brand decision you’ve had to make in the past 12 months? Opening the Injurylawyers4U panel up after 12 years and having to whittle down the potential firms into those with an outstanding reputation, commitment and the substantial resources to make their panel position work. If they didn’t have any of these elements, it would be an administrative headache. It’s not, because we’ve worked hard to ensure that, so we know our decisions were the right ones so we can focus on what we need to do. In terms of other firms’ decisions, what has surprised me since 1st April is the number of inducements being offered per case. Surely this brings profit margins down?! This is something the sector really needs to look at later in the year – to see if inducements rise or fall. I think they will calm down by a natural death due to the acquisition cost. The time for inducements is running out. Only the strongest firms will survive, and for others, well, I think we’ll know by Christmas.

“Sausage machines and client care don’t fit together, service has to go. – I know people won’t agree with that.”

Andrew Twambely, Amelans & InjuryLawyers4u

Having trained with a long established Manchester firm, Andrew created Amelans, as it is now, in 1989. He currently manages Amelans and Injurylawyers4u. After being pressganged into property work, Andrew soon escaped to deal solely in personal injury claims. Andrew was intimately involved with such groundbreaking cases as Callery v Gray and Sarwar v Alam. He also works with the Civil Justice Council to help the development of laws surrounding legal costs.

Q A

Have PI firms no choice but to forge or find effective marketing networks going forwards, or risk losing their stake in the industry? The only real alternative to marketing cooperatives is a joint venture ABS with an insurance company. Inducements are also being used as an alternative. I don’t see inducements as innovative. In fact they are worrying considering they are marketed at the vulnerable. All they do is fuel the compensation culture headlines. Do claimants even receive the ‘free’ iPad or £1500 upfront? No, of course they don’t because the

MC // July 2013

Andrew Twambely Interview

terms and conditions are so tight and, often, the case is settled anyway. I expect, in reality, inducements are rarely received.

Were you always ‘on board’ with the power of marketing / the brand and if not, what turned your head? Are there still tactics that you feel the legal market should stay away from? Back in the last Century I saw the marketing power of Claims Direct and the Accident Group. The explosion of marketing initiatives inspired InjuryLawyers4U, which is a lawyer co-operative, not a claims management company... It was clear then that brand is big and that won’t change. In terms of marketing tools, social media is a tricky one for the personal injury market as a PI legal service is a distressed purchase. Around 98% of the general public aren’t interested in PI firms until they need help. All they see is the compensation culture bandwagon on Twitter messages. Getting the brand to those people requires the use of different techniques, such as the internet and TV advertising. You have to be very, very careful when marketing personal injury claimant firms. We’ve managed it with Injurylawyers4, now a household name. It’s even used in a throwaway context by comedians as a gag term for the industry, which is, actually, quite great.

Are you looking to grow Amelans through acquisitions / mergers and if so, what would you look for?

We’re looking to form a base for the future over the next six-12 months. The PI market will be completely different after March 2014 so we’re treading water on investment spend until we can see through the fog. An acquisition trail is a dangerous one and we’re not that brave...

Q A

Are personal injury ABSs still an attractive option for external investors? External investors are very, very, very choosy. The Holy Grail of external funding is to only invest where they feel it’s a good place to invest and are law firms really the best place for them, in light of what’s happening to the market? Alan Sugar would never invest in a law firm...

Q A

How have ABSs changed services and standards for claimants? Or are we a long way off yet for real innovation? Better service requires the delivery of efficiency in the claims process, but efficiency means different things to different people. On the face of it, the highly commoditised firms push for client care but when you build a sausage factory, client care cannot be factored in. Sausage machines and client care don’t fit together, service has to go. – I know people won’t agree with that, but...you simply can’t provide high scale efficiency and still devote high levels of resources towards client care. I don’t blame the Legal Services Act or Legal Services Board for this. The Government is killing it [the sector] off; it’s been destroyed.

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Tim Oliver Interview

Interview with... Tim Oliver Tim Oliver is Group Chief Executive of the first legal services entity, Parabis Group, to set up as an ABS with private equity backing. He is also the Senior Partner at Plexus Law, a Parabis-owned firm, which merged with insurance dispute resolution firm, Greenwoods, earlier this year. He speaks to Emma Waddingham about the impact of change on insurers and the change of mindset required to make the most of Portal expansions, expected soon.

Q A

Where are insurers going in terms of the new claims landscape and how can outsourced legal services offer innovative solutions to meet their needs? There are two main focuses. Firstly, motor claims. The Portal has been in place for some time and is reasonably settled, with a further extension to come. The small claims limit still needs resolving and once this happens, we expect a drop in the number of motor claims due to a lack of funding. ELPL claims are a second focus; insurers need to do a lot of preparatory work here. Claims need to be turned around quicker which means earlier investigation as soon as claims appear. This means laying in the early groundwork by the insurer. Insurers have also looked at their claims handling capacity internally. Post 1st April, Aviva has reduced the number of its claims staff and others have done the same to ensure they can streamline overheads. Outsourcing provides insurers with greater flexibility to manage claims efficiently and we’re seeing this outsourcing decrease in the off-shore market with near-shoring more popular. There is now a bizarre situation in motor claims where, unless insurers effectively manage their legal claims process, the cost of paying their solicitors is then more than what they are paying claimant solicitors. Outsourcing offers greater capacity and speed as well as flexibility.

Q A

will the rise of Joint Ventures (JVs) in the claims sector (between insurers and law firms) eliminate the need for panel defendant solicitors? What works best? At the moment, JVs are focused on claimant BTE motor work, mainly to help capture profit after the Referral Fee ban. I’m not sure if these are being

“There is now a bizarre situation in motor claims where, unless insurers effectively manage their legal claims process, the cost of paying their solicitors is then more than what they are paying claimant solicitors.”

Tim Oliver, Group Chief Executive, Parabis Group & Senior Partner, Plexis Law

Tim qualified as a solicitor in 1986, joining the Parabis Group in 2000 where he is now Group Chief Executive and Senior Partner of Plexus Law, a Top 30 Law Firm. Parabis provides legal services to the Insurance Industry as well as incorporating rapidly growing claims handling, loss adjusting health and safety and rehabilitation divisions. During the past 10 years Parabis has acquired 12 businesses all of which have been successfully integrated into the Group. A significant amount of his legal career has been spent advising the travel industry but he also edited the 10th and 11th edition of Binghams and Berrymans Motor Claims and co-authored Oliver & Dingemans on Employers Liability. He has many interests outside of the Law and amongst other things is a Borough Councillor, Vice Chairman of the Trustees of The Shooting Star Chase Children’s Hospice and School Governor. Tim is a past president of FOIL.

MC // July 2013

Tim Oliver Interview

“Joint Venture ABSs are a great opportunity for those working with insurers already as we have “????” experience in working alongside them, seamlessly, in the claims arena. However, those JV-ing up with insurers need the strength and depth to offer that legal service effectively; it’s all about scale.” looked at on the defendant side but it is clearly a logical thing to do. Why wouldn’t insurers want to deal with defending claims in that kind of structure? At the moment, insurers are going through a learning curve with the SRA and once more systems have been put in place, then we’ll see more progression into other areas. Joint Venture ABSs are a great opportunity for those working with insurers already as we have experience in working alongside them, seamlessly, in the claims arena. Although perhaps it would be better served under their brand rather than ours. However, those JV-ing up with insurers need the strength and depth to offer that legal service effectively; it’s all about scale.

Q A

How can you maintain niche services for the insurance sector? Are insurers looking for niche skill sets? No, and Parabis has two different models in truth. Plexus Law is unfairly described as ‘factory law’. We have a volume claims and litigation service as well as a specialist solution via Greenwoods, which is very strong in the field of catastrophic loss and disease work. The two aren’t in conflict and no-one is looking to commoditise catastrophic loss claims. ELPL is an interesting area and changes to come mean that insurers need to be more organised to deal with these types of claims going forward. Insurers need to focus on a triage system, to assess the claim at the time of injury notification. For example, you would be able to see from the employee accident record in a factory which injuries are likely to result in a claim. This would work better for insurers, rather than to sit and wait for the claim to come in further down the line, with no ability to control cost and investigate. Yes, this is venturing down the Third Party Capture / Assist line, which gets people going. But what is in the best interest of clients; to help them through their claim, does that mean they are being disadvantaged? A claimant can always bring a solicitor in at any stage and they do.

MC // July 2013

Q A

To what extent are insurers capable of handling the changes to the claims process that impact their business? It’s fair to say that most panel solicitors are in regular dialogue with their insurer clients, who are perfectly capable of understanding the impact of change. The bigger issue is, can they turn around and react? Are they flexible and nimble enough to respond to the changes? The benefit of outsourcing for insurers is that practical implementation is left to the outsourced partner rather than the insurer client, which has the ABI to gain strategic / industry support for member organisations.

Q A

The claims sector is complex and fragmented. Do you see ABSs changing this and how quickly will brands and services consolidate? How will this benefit insurers? If you look at the defendant legal services sector then yes, it has been consolidated and it will continue to do so as insurers want to contract out their work to those with scale. What’s happening now is that insurance companies aren’t looking to go with big-name senior lawyers with reputation; they are looking at instructing on a B2B basis, with a brand which has the capacity to deliver. They want to use end-to-end suppliers, rather than cherry pick services across different firms. Having said this, insurers, while wanting the one service across their whole organisation, don’t want you [legal supplier] to be wholly dependent on their work, so you have to have 2-3 big clients. That’s not unusual. On this basis, I predict there will be no more than half a dozen defendant law firms within the next 18 months.

What edge has Duke Street [the first private equity investor to enter the legal services arena after investing in Parabis Group] given Parabis Group over others in the market? Governance. Duke Street gives us the external business perspective and the ability to build a robust business as a business,

rather than a legal partnership. We have always had a small owner / management structure but Duke Street reinforced that B2B approach, bringing in its knowledge, experience and business techniques from other sectors – which has been hugely beneficial. It is very early days with ABSs as, really, only one or two different business models have been created by them so far. When we really start to see Tesco Law etc, then we’ll start to see different commercial ventures and different structures. What has also been key in terms of the involvement of Duke Street is the ability to invest in the processing aspect of our business and build even more robust infrastructure.

Q A

Will insurers be keener to devolve processes to outsourced companies in light of the Portal expansion and what are they looking for? It’s certainly a solution to support insurance companies around the Portal extension of RTA and the roll out of and ELPL Portal. My organisation describes itself as a middle office outsourcer, offering services in the middle of the claims process. This is what insurers want. What the Portal has done and will do even more, is demand that the claims process to be speeded up, costs

“Insurance companies aren’t looking to go with big-name senior lawyers... They want to use end-toend suppliers, rather than cherry pick services across different firms...On this basis, I predict there will be no more than half a dozen defendant law firms within the next 18 months.”

Tim Oliver Interview

terms of process. Insurers need to look at first notifications in ELPL claims, where they are brought in at the point of claim. Insurers have been on a huge learning curve from the RTA Portal as well as firms. So both defendant firms and insurers need to work together to find a dynamic solution to ELPL claims and push them through to settlement.

Q A

to come down and more effective systems. We can invest in these more heavily than the insurer. Yes, there will still be areas where specialist claims need specialist technicians, which is why we have Greenwoods. But you also need to deliver scale through an army of people in the claims team, which insurers no longer have. The outsourced supplier takes on the assessment of risk too. However, this capacity also needs to be delivered at the right cost for the insurer client. The idea of outsourcing everything to one client, over a panel of clients is also something that will come with a

change of mindset and need to drive down legal costs. Look at CAPITA. This organisation is outsourced to by government departments and others across the UK to administer processes. Conceptually, if CAPITA can do this for many clients, then why not one large or a few large legal services providers for the insurance industry?

Q A

What are the key challenges for the claims sector and defendants in the next 12 months? Getting the ELPL Portal in place and looking at what that means for the insurance industry in

Do you envisage a drop in the number of claims processed by the end of 2013? Firstly, in motor, we have already seen a spike pre 1st April and it’s difficult to see past this period of distortion under the new rules. It will take a while for those claims to move on. Secondly, in disease, I believe this area of claims influx will continue to spike until 2016 and the number of ELPL claims decrease. This is largely due to a lack of available funding for cases which does raise the access to justice issue. It is a shame the Government passed over the suggestion of compulsory BTE insurance for legal expenses cover in the reforms, although they did pick up on it. If the majority of the country has BTE cove then it will be competitive and it will help redress the access to justice issue. The small claims limit extension will undoubtedly take out a huge volume of claims as solicitors can no longer afford to run these cases; this will have a huge impact on claims numbers. Finally, risk assessment by defendants has improved. The challenge for Government is to look at further changes to look at more transparent ways of funding claims for individuals.

Q A

What next for the Parabis Group?

These are interesting times! We will continue to look at the service structure and ways to strengthen demand areas, mainly legal process outsourcing. In our sector, providing the greatest depth, scale and skills for clients is paramount. The Group already has 3,000 people working for our clients and ensuring that everything we do, we do for them.

“It is a shame the Government passed over the suggestion of compulsory BTE insurance for legal expenses cover in the reforms.” MC // July 2013

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The Opinions

19-41

The OPINIONS

MC // July 2013

The Opinions

Q: The Mesothelioma Bill: better than nothing or a complete solution?

On 25 July 2012, it was announced that newly diagnosed victims of mesothelioma will receive help through a new support scheme. This was announced by the Minister for Welfare, Lord Freud and the Association of British Insurers (ABI). The Mesothelioma Bill is currently making its way through Parliament and will be available to claimants who are diagnosed with mesothelioma on or after 25 July 2012 for those victims who have been unable to trace a liable employer or employers’ liability insurer. Claims can only be brought to the scheme when other avenues have been exhausted, and the compensation levels have been set at 70% of the average compensation paid by insurers, to maintain the incentive to trace a liable insurer. The scheme only applies to mesothelioma sufferers diagnosed on or after 25 July 2012 and critics of the scheme say this does not go far enough by using an arbitrary cut off date and also ignoring other asbestos related diseases. Mesothelioma does have a particularly poor prognosis which was paramount in considering the support scheme for this particular disease. Many other claimant groups would like to see an Employers Liability Insurance Bureau (ELIB) in place as a fund of last resort for those unable to trace an EL policy in order to claim compensation. The fact is that none of us were aware of the full effects of exposure to asbestos 30 or 40 years ago and so robust records were not being kept by the insurance industry or indeed employers at that time. This has subsequently been complicated by the myriad of consolidations and amalgamations within insurer and broking firms in recent years, as well as an obsession with policy reissue undertaken by insurers during the 1980’s and 1990’s in particular. The mesothelioma compensation fund will be funded by insurers to the tune of £25-£30m per annum, in addition to the £200m the insurance industry pays each year in compensating mesothelioma sufferers. If an ELIB were imposed, this could have a destabilising effect upon an EL market which is already fragile and an additional cost burden could have a negative effect on the market and its customers. We do now have the Employers Liability Tracing Office (ELTO) which was introduced in April 2011 and going forwards, this should ensure that claimants can secure access to historical EL policies, but we still need to ensure that those mesothelioma sufferers whose claims are expected to peak by 2016 can have compensation access to which they are entitled. Whether the Government compensation scheme as detailed in the Mesothelioma Bill goes far enough is still subject to much debate, but even the most vociferous opponents must agree it is better than nothing and a step in the right direction. Steve Foulsham, Head of Technical Services, BIBA

MC // July 2013

Co-operation is key in the fight against fraud

raudulent claims have contributed to the rising cost of motor insurance and are one of the factors that have brought our industry into disrepute. However, this is still only a small percentage of claims and that has to be borne in mind when making sure changes do not affect genuine and innocent accident victims. The majority of claimant solicitors conduct cases with the upmost integrity and go to great lengths to identify potentially fraudulent cases and ensure genuine claims are run properly. But this isn’t always clear to the outside world and the actions of a minority in the personal injury industry have resulted in the distrust of the wider legal community and industry as a whole. To really tackle fraud we need to promote good practice and work with others in the sector to identify fraudulent claimants who want to take advantage of the system. We need to share data, share ideas, and support each other’s fraud fighting initiatives. We also need to work to bring about a cultural change. MASS has called for an end to the ‘have a go’ culture that is endemic today. This sort of fraud is often seen as the acceptable face of crime, only hitting the wallets of big business such as insurance companies. In reality, such actions hit consumers’ pockets as insurers and others pass on the costs to customers to cover their losses and maintain profit levels. Everyone working in the motor accident claims process needs to play a part in addressing this misconception. Over the last two years, my predecessor as MASS Chair, Donna Scully, has raised the banner high on bringing the industry together to fight this dark side of claims. We are now making progress towards a cross-industry data sharing agreement that will help to stop fraudulent claims being made. At the same time MASS members continue to work hard to spot these cases when they first come to us, and we are urging insurers to play their part in tackling this problem at its source. Fraud detection has to shift to fraud prevention and we encourage insurers to tackle application fraud and work towards identifying fraudsters when they try to take policies out in the first place and stop them being insured. Craig Budsworth, Chair, MASS Motor Accident Solicitors, Society and RTA Partner, Glaysiers

The Opinions

The tide has turned for ‘frivolous claims’

ith whiplash claims costing the industry well over £2 billion a year, representing 20% of the average motor premium, there is now consensus that action is required to tackle the UK’s ‘whiplash epidemic’. This is why; the Government is consulting on increasing the small claims track (SCT) limit to £5,000 and reforming the medico-legal reporting system. The insurance industry fully supports increasing the SCT. It has not been raised since 1991, when it was set at £1,000. Since then, in addition to general claims inflation, there has been a substantial rise in low-value, straight forward whiplash claims. Now even the most minor whiplash injuries have fallen out of the SCT and are now dealt with in the fast track. With the average whiplash claim costing around £2,000, under 9% of personal injury claims were valued under the current SCT limit in 2012. The SCT is a user-friendly, simple route for settling straight forward low-value claims. Claimant lawyers have argued that increasing the SCT will impede access to justice. This is little more than the voice of selfinterest. Increasing the SCT limit would not restrict access to justice. The small claims court is familiar with situations where there is potential for ‘inequality of arms’, and can guide and assist the claimant during the claims process. The insurance industry can assist self-represented claimants in understanding their rights under any new system. There are already a number of guides available from the Civil Justice Council, Bar Council, and the ABI’s third party assistance guide. The ABI guide explains how the defendant’s insurer or appointed claims handler can assist a self-represented claimant. Claimant lawyers are concerns that claimants will not have the expertise to value their claim and that insurers will under settle claims but these are not backed by the available evidence. Research commissioned by the ABI has found little difference between the average compensation received by claimants with or without representation. Claims with legal representation also took substantially longer to settle. The FSA carried out a review in 2010 and found no evidence of under settlement. This issue would be best addressed by implementing the software-based damages assessment tools currently used by insurers across the industry, with damages levels independently set, so there can be no disputes about the quantum of damages. Increasing the SCT limit will reduce the rising tide of frivolous whiplash claims, producing costs savings and lower premiums for customers. Rob Cummings, Policy Advisor, Motor, General Insurance Directorate. Written on behalf of the ABI

Siren voices threaten effective reform

‘K

eep calm and drink up’ says the empty tea mug sat on my desk, a Christmas present from one of my team.

While the issues and changes which have come in as a result of the Legal Services Act and the Jackson Reforms are fundamental and ‘game changing’, the accompanying commentary has reached astonishing levels. The claim and counter claim, hyperbole and attacks are unprecedented in my professional career. As time-recording had not come into being when I qualified, you might think that gives a fair window to look through. When you look, for example, at the propositions that were put to the Transport Select Committee by the various parties and the comments on a number of websites arising out of it, you must wonder how the committee is supposed to reach reasoned and balanced conclusions. Nobody outside the industry would countenance the idea that the costs of bringing a claim should exceed the value of that claim, any more than they would accept paying more for the repairs to the family car than the car was worth. Changes were required and these have now started to come into effect. We are getting through the first few judgments as to what the Jackson Reforms mean on a day-to-day basis. A special Court of Appeal Judicial Bench has been convened to hear appeals. Lord Neuberger stated in his recent speech to the Institute of Government that ‘more radical solutions may be required - such as dispensing with disclosure of documents and cross-examination, even with an oral hearing, in smaller cases’. The issues that have led us to get to this state are multifactorial. Everybody could have done more to avoid the situation. What matters now is how we react to these challenges and move forward to provide a service that users of the system will respect and view as providing value. To achieve this, there will need to be constructive criticism. The referral of DBAs back to the Ministry of Justice (MoJ) is a good example. These need to be sorted out quickly. My concern is that if the commentary continues in the way it has to date constructive criticism will be drowned out by the siren voices. This puts the claims process and the court system in a poor light with those that use it. It also means that the (hopefully) fine tuning required to ensure that the reforms’ objectives are met will take longer and be more difficult to achieve. Rod Evans, President, Forum of Insurance Lawyers (FOIL)

MC // July 2013

The Opinions

Q: Are niche services possible in the modern claims process?

Not only are niche services possible in the modern claims process but they are integral to this industry. Whilst being all things to all men may work for the big corporations, smaller CHOs (credit hire organisations) cannot afford to sit on their laurels and expect a mediocre service to carry them through tough times. LASPO has taught us many things, but the biggest area for change is with service. All too often our industry has been concerned with how much will be made and paid in relation to referral fees. Now it comes down to service rather than price to set CHOs apart from one another and the best way to excel in service is to focus on a bespoke market. As a company that specialises in a niche service market, (with the supply of replacement plated vehicles), DWA Claims has always aimed to provide a service that exceeds our customers expectations. With customers ranging from self-employed taxi drivers and taxi companies as the hirer to intervention insurers, brokers and CMCs as the provider of work, practically everyone we deal with throughout the claims process is considered a customer or potential customer - and treated in accordance with our customerfocused ethos. Throughout the entire claims process the customer is the most important element - it’s a philosophy that has served us well over the years. According to feedback, it certainly sets us apart from our competitors. With over 20 years of experience in the claims industry – on both sides of the fence - and 14 of those years specialising in the taxi market, the management team at DWA Claims agree that a high quality workforce is the key to delivering a high quality service. We believe that focused customer care and great service is paramount to the niche service market, so we’re committed to achieving the best working team possible. In this day and age of ever-shrinking margins, it takes real commitment to stand by an ethos of quality over quantity – especially when you consider the competitive nature of our industry, driving the need to keep costs to our customers as low as possible. Thankfully for the customer, there are still those of us out there that are willing to make that choice. Let’s hope that more CHOs see the light and join us. Ashley Potter, Director, DWA Claims Limited

Q: Is the sector / Government moving fast enough in the bid to share information on fraudulent claims? What stage is the data sharing process at, especially for motor claims?

When I became MASS Chair in 2010 I wanted to do something positive by trying to get both sides in the claims process to work more collaboratively in the fight against fraud. As a PI lawyer I was tired of the mistrust, fighting, ambushing, cost building and generally messing around when it came to working together and sharing information on fraudulent activity. I set up the MASS Fraud Forum and got all the relevant stakeholders in this area together to see what they thought. The result was that we all felt unanimously that we needed to improve communication and collaboration when it came to fighting fraud. Since then I have had meetings with the ABI on behalf of MASS and the claimant community and the discussions are on-going. There is a will on both sides, together a lot of mistrust on the side of the ABI members, to do something positive and break down the barriers that exist today. I hope to see a successful pilot soon so that I see my dream come to fruition. Of course it is not moving fast enough and every day more fraud is perpetrated because of our delay. However, saying that, I do understand that what I am proposing is a fundamental change in not only process but in trust between two formerly warring parties. Simply, we need to all grow up and sort it out. For every day we don’t, another fraudster gets away with it and worse of all, the innocent accident victims pay for that in increased premiums and huge suspicion when they make genuine claims. I am delighted to be a member of the Insurance Times Fraud Charter 2013 too and it is refreshing to sit round the table with a lot of relevant stakeholders and share information, ideas and ways to improve how we all fight fraud together. If an agreement on more collaboration fighting fraud and data sharing cannot be reached then I suppose the next logical step is to seek the involvement of the MOJ but hopefully that will not be necessary. Wanting to fight fraud and reduce it is a goal that joins all sides of the claims process together. Donna Scully, Partner, Carpenters

MC // July 2013

The Opinions

Use your expert wisely

ost repairers on insurance/ credit hire companies’ networks will use some sort of estimating programme (Audatex, glassmatixs, interest, etc) which will provide times and costs etc to replace panels on the vehicle. The importance of having an experience estimator is mainly to check various areas of the vehicle so that the most accurate assessment can be submitted to the insurance company/ assessors to make the correct decision that the vehicle is economical or uneconomical. This can be often a hard decision to make without the correct information, like an appropriate amount of photographs / has the tailgate been opened to check the boot floor / has the estimator provided the mileage of the vehicle for valuation proposes? These simple processes are mainly common sense yet we have seen an increase in estimates received that are incomplete, which could delay the claim from not being in a position to make the correct decision. So why is this? • Are some repairers saving money on not employing experienced estimators? • Are repairers not making appropriate appointments to view the vehicle with the client due to demanding SLA’s Although some might say that this is an assessors’ job, to agree the correct methodology and fair and reasonable costs with the repairers (which is true), an assessor can only base his opinion on the information he is provided with from the repairers to base that opinion. If all that information is available at the time of the assessor making the decision no further action is required and no delay should occur. Robert Kelly, Key Account Manager, Acorn Assessors

Q: The Mesothelioma Bill, currently going through Parliament will be a scheme funded by a levy on insurance companies and suggested by parliamentary debate to be run by an insurance-led body. Is this better than nothing?

The Mesothelioma Bill currently progressing through Parliament underpins a package of reforms for these claims. Once approved, it will have two significant effects. Firstly it will allow the Secretary of State to levy EL insurers to fund a scheme that will make payments to occupationally exposed mesothelioma sufferers who are unable to find an employer or insurer to claim against. Secondly, it allows insurers to establish a Technical Committee, to look at disputed issues of EL cover and make binding decisions on the balance of probabilities of cover being in place. This legislation is a landmark and indicates the government’s long awaited response to the 2010 consultation which proposed an EL insurance bureau for all disease and injury types. These proposals however, focus on providing support to those with the most serious occupational disease, mesothelioma. It is estimated that the untraced scheme will cost the industry £30-£35m per year - around 3% of EL GWP – to provide payments to 200300 claimants. The impact of mesothelioma on individuals and businesses however cannot be understated. Over the last two years the insurance industry has worked to make sure that these proposals address the real issues and provide meaningful help to those who need it most. The unique nature of mesothelioma means that unlike other conditions it is always fatal and almost exclusively caused through exposure to asbestos. Because of the long gap between exposure and symptoms however, it can be difficult to establish details of historic coverage and this has led to claimants being unable to claim damages to which they are entitled. Forecasts predict that mesothelioma deaths are due to peak in the next two years and it is increasingly urgent that a long term solution is found. The scheme is only part of the reform agenda. There has long been recognition that the legal process for mesothelioma claims is too long with claims taking an average of 16 months to settle. In July, the Ministry of Justice will consult on civil justice proposals including a mesothelioma specific pre action protocol, fixed costs, a secure claims gateway to register claims online and a review of the current exclusion of LASPO to these claims. While there may be challenges to changing the approach, by streamlining the process and reducing unnecessary complexity, claims handling can be significantly improved, reducing excessive costs and ultimately serving claimants better with quicker settlements hopefully during their lifetime. There is no doubting that the proposed changes go some way to achieving the almost impossible - a careful balance recognising the hurt suffered by mesothelioma claimants, and placing a proportionate and sustainable cost on the EL insurance market to help resolve these long standing issues. John Latter ACII, Director of Technical Centre, UK Claims, Zurich Insurance plc

MC // July 2013

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The Opinions

Q: Technology in claims: What will transform the industry, evolution or revolution?

The terms borrow from different disciplines, helping shed some light on our understanding of technological developments. Some are seen as evolutionary - referencing biology and genetics - with characteristics inherited over successive generations, and developed in comparatively slow and gradual steps that eventually accumulate into enormous transformations.... or extinction. Others are perceived as fundamental changes in a relatively short period of time - revolutionary - and adopt the language of historians and sociologists. But we need to beware. It’s not so simple. Evolution includes mutation, which is swift and dramatic. And revolution can be drawn out: the Industrial Revolution itself spanned some 80 years between 1760 and 1840. Both terms share the same ‘flawed’ characteristic of 20/20 hindsight: insightful when looking backwards, but less potent in the present day, or for forecasting the future. Take for example, the biggest technological changes in general society today which revolve around smart phones and tablets. Right now they feel like a revolution. But cellular data technology has been around over 20 years already, advancing step by step. So what’s happening? Evolution or revolution? One day, no doubt the historians will tell us, retrospectively. Closer to home I believe the work of my own company in auto claims spans both: evolution of say vehicle damage assessment and estimating, a technology that is relatively mature, yet still open to commercial improvements revolution when it comes to something like FNOL, where an up-front triage can truly transform business processes and profitability. But no-one can really know how right I am. Yet. Michael Nixon, CEO, Inter-est.net

Q: Post 1 April, there has been a flood of personal injury / claimsfocused ABSs coming through the SRA licensing process. Are these mechanisms simply referral fees in new clothing?

I appreciate there are some industry observers who believe the creation of ABS could be a calculated manoeuvre to circumvent the referral fee ban, resulting in the continuation of customer malpractices in relation to personal injury claims. There’s also a fear that an ABS would encourage continued exaggerated claims. At Ageas though, we take the completely opposite view. In response to the new referral fee legislation we conducted a thorough review of our claims services. Our intention was to enhance the overall customer journey, ensure compliance with the legislation and continue to offer genuine customers access to legal services, while helping to filter out spurious and fraudulent claims. The result was that we were one of the first companies to set up an ABS - Ageas Law. For us an ABS is a way to deliver a high quality customer experience via a reputable and controlled supply chain for those in genuine need of a claim, with fewer handoffs to third parties. It also enables us to use up front anti-fraud detection measures. No cold calling, texts or incentives, no data-selling and no pursuing customers who have stated that they have not sustained an injury. That feels like the right way to handle customers rather than leaving them to the compensation feeding frenzy that has existed up to now. Under our ABS model, no referral fees are taken. In addition, to make absolutely sure there is no deviation from the high ABS standards we have set ourselves, we have created the Ageas Ethics Committee to oversee the model. This comprises independent non-executive directors who have a free reign to scrutinise, question and recommend changes to our processes to ensure customers are always put first. Our new arrangement has also been robustly assessed by the SRA and throughout the creation of Ageas Law we have consistently maintained a high level of media transparency about our motives and rationale. For us, the opportunity to extend a strong service tradition to even more customers who have a genuine personal injury need was an easy decision for us to make. Andy Watson, Chief Executive, Ageas

MC // July 2013

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The Opinions

Q: How is the insurance sector combating fraud?

Over the last few years insurance premiums have had to increase by unprecedented amounts, which is partly due to the staggering rise in insurance fraud. Fraud is often seen as a ‘victimless’ crime by the public but the reality is that it drives up premiums for honest customers. In fact, a report by the ABI estimated that fraud now adds an extra £50 a year on average to the annual insurance bill for every UK policyholder. As an industry, we must take the fight to the fraudster and employ a zero tolerance approach to financial crime. Industry figures show that every week a staggering 2,670 fraudulent insurance claims worth £19 million are being uncovered as insurers intensify their crackdown on insurance cheats. Dishonest motor insurance claims are the most expensive with £541 million identified as fraudulent in one year alone from the 45,000 bogus claims uncovered that year. Fraudulent whiplash claims have been identified as the main factor behind the rise. It is not enough to simply prevent fraud at claim stage. If we are deter fraud we need to commit to bringing the fraudsters to justice using private prosecutions to allege contempt of court where we believe claimants have made false statements. A successful example of such tactics being applied was the Liverpool Victoria v Michael Rajinder Singh case at the end of last year which involved a claimant who had made a fraudulent claim for damages. The claim was flagged and investigated further as there were a number of factors that made it suspicious. There was no police involvement in the accident and the vehicle damage was inconsistent with the description of the accident. The fact that the claim was made just a few days after the insurance policy had been taken out also raised suspicions. Mr Singh was committed to prison for eight months after he had committed contempt of court by signing witness statements containing statements of truth, asserting that he had been involved in a fictitious road traffic accident. Sentencing him Judge Graham Robinson said: “Those tempted to make fraudulent claims from fictitious accidents should take heed.” We publicised the outcome in the local, national and trade media to serve as a deterrent to others. The Insurance industry is prepared to spend significant sums to investigate suspicious claims fully by investing in the right systems and fraud expertise. Fraudulent claims are increasingly being identified very early on and fraudsters successfully prosecuted with harsher sentences and outreaching consequences.

Q: Are claimants offered ADR as an alternative to court at the start of the claims process and will this change?

This question assumes that forms of ADR, such as mediation, are in fact alternatives to the court process. ‘Alternative Dispute Resolution’ begins with the word ‘alternative’, so that does not seem to be an unreasonable assumption. As a mediator, however, I do not see it like that. It is not a choice between ADR or the court process. Instead, I consider that processes such as mediation are, like negotiation, integral components of the entire claims system (as they are integral to the CPR). A claim can be settled at any time between day one and the trial. Sometimes negotiation is employed at an early stage and at others it will not be used until very late on. In the same way, mediation can be used at any time. Historically, in this jurisdiction, mediation has been used late. There is, however, no reason why that should continue to be the case, because the process works perfectly well pre proceedings. So, my take on best practice is that the claimant should be offered an excellent litigation service from start to finish. A service delivered by skilled lawyers with the ability to deploy a range of tools - such as negotiation and mediation - at the appropriate juncture. In my view, any client who is not informed about the potential employment of ADR options at the outset, and then kept informed, will increasingly have scope for complaint. Any lawyer whose approach to litigation is ‘I have a hammer, therefore all of my client’s problems are nails’, is getting left behind. Jackson LJ, in his costs review, recommended that guidance on ADR be published for lawyers and the judiciary. The Jackson ADR Handbook is now on sale and, having been provided to all members of the judiciary, is on a judicial bench near you1. Practitioners may find that thin explanations such as ‘mediation is not suitable for this case’, will no longer wash. Clients may not yet ask their lawyers about mediation on day one, but mediation is being used more frequently in many areas and that day will come. Tim Wallis, Mediator, Solicitor, Director, Expedite Resolution 1. The Jackson ADR Handbook, Susan Blake, Julie Browne, and Stuart Sime 978-0-19-967646-0 OUP

Peter Horton, Chief Operating Officer, LV= Insurance

MC // July 2013

The Opinions

Q: Are niche services possible in the modern claims sector?

Although far more difficult a prospect, there still remain areas of practice within the modern claims sector that can be seen as niche. What is clear however is that those niches have become far more specialised and specific. One of the main areas in which niches appear in the modern claims sector is very specific to client base, so there are firms which specifically service disabled clients, or military personnel. They become expert in that area and can offer a more bespoke service to cater for specific needs of that client base, in a way that a more traditional firm simply will be unable to replicate.

There are also firms who deliver to very specific communities, who can be seen as having a niche in that area of work. So, for example, I am aware of a firm in London who caters specifically for Turkish clients, almost the entire staff can speak Turkish and they are known in the Turkish community as the place to go for any legal requirements. Then there are the specific areas of law that are often seen as those areas of law most other law firms do not want to get involved in, because they are too difficult, time consuming or involve more risk than many law firms are prepared to face. My own firm Nesbit Law Group deals with cases where there are allegations of fraud and in particular in respect of cases that other law firms have decided they have reached a stage that they no longer want to deal with them. Similarly there are firms that deal specifically with holiday cases or dental negligence cases. Finally, rather than niche specific firms, firms have moved away from doing a variety of different types of PI and have become specialist in a specific type of personal injury activity, such as focusing on industrial disease work only or clinical negligence claims. Although that specifically niche, they are undoubted specialists in their area of law. Alan Nesbit Managing Partner Nesbit Law Group LLP

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The Opinions

Q: Are consumers concerned about the cost of legal expenses – enough for them to invest in MLEI (motor legal expenses insurance)?

The market has developed since 2000 to its current state and the main drivers in the development of the market are legislative changes. Two of the key factors are the compensation act 2006 and the introduction of regulation of claims management companies. MLEI was traditionally a cheaper alternative to after the event Insurance and is still a lucrative revenue stream for motor brokers. Now that LASPO is upon us the ability for law firms to recover large ATE premiums from the TPI is no longer an option. This leaves several options open to the consumer: the first being to purchase an MLEI policy at inception as an ‘add on’ to their main motor policy. The typical cost being around £25. Most policies will also protect against any reduction of awarded damages. There is however a major knowledge gap in the understanding of the benefits of such a policy as the majority of consumers either don’t know or the message isn’t being made clear enough by the suppliers. There are also some hybrid MLEI policies starting

to appear on the market which limit some of the exposure to reduction in damages for legal costs but not entirely. The next option is to be provided with an ATE policy which will cost around £50 to £75 -however there are products on the market which are appearing and these can set the consumer back several hundred pounds and may be deducted from any damages. There is also the issue of losing up to a further 25% of any award to cover solicitor costs. Another consideration is the recent thematic review of this sector by the FCA. I think this should galvanise the providers to offer more transparency and more importantly value for money for the client. Providers need to look at educating their potential customers and helping them to understand the importance of the right choice of policy along with the potential pitfalls of not choosing the protection at inception. I think the market will continue to develop and providers who put the customer first will prosper. Jim Toole, Director First Response Law

Q: The case of the rising trend of claims fraud across all business lines, including property, pet and casualty?

The ABI estimate that the total value of fraudulent insurance claims each year amounts to £1 billion – approximately 139,000 dishonest claims per year across all lines of business. Undetected fraud could potentially add a further £2 billion to this figure. As we enter the ‘post-Jackson’ era - and with several further changes to the civil procedure rules and claims process being introduced shortly - the battle lines may need to be re-drawn as fraudsters look for innovative new avenues to exploit the changing legal landscape. Recent figures from the Compensation Recovery Unit show an increase in the number of injuries being registered as a result of EL and PL claims – whilst the number of motor related injuries has fallen. Shortened investigation time and periods for admitting liability for insurers (due to the forthcoming extension of the MoJ road traffic accident portal process to EL and PL claims) is expected to lead to an increase in fraudulent slip and trip claims as professional enablers look for potential new targets. Despite increasingly efficient screening, validation and claims handling processes, insurers, no matter how well equipped, are likely to struggle to assess claims within the prescribed time-frame. In the pet arena, insurers are currently paying out over £1.2 million per day on cat and dog claims alone – an average of £600 per claim and an area ripe for manipulation. The level of detected fraud against pet products stands at £2 million and a year on year increase is expected to continue. The picture is similar when claims against travel policies are scrutinised, and fraudulent home policy and property claims are the most numerous by volume. For the short to medium term, it is likely to remain the case that the more sophisticated, organised fraud operations with the highest monetary value and financial impact will be found in the motor arena. With the value of motor claims that will be dealt with via the portal set to increase to £25,000, there is no doubt that motor fraud will continue to require industry focus and resource. With products spanning such a diverse market however, the risk of financial leakage, brand and reputational damage and an ability to remain competitive posed by insurance fraud in its widest sense is significant and continuing. Insurers should have one eye firmly on their non-motor lines when setting their future fraud strategy. Sarah Hill, Partner, Berrymans Lace Mawer

MC // July 2013

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The Opinions

Q: Is improving technological process enough to energise claims departments, make them more efficient and prove value to clients / funders / partners?

The key to using technology effectively is to understand that it amplifies the system to which it is applied; thus a well thought out manual procedure could be made significantly more efficient with an automated IT system. Equally, a poor procedure will be compounded by IT.

Whether processing a claim, building a car or cooking a hamburger, there is a process which flows from the initial instruction through to the final product. This works well when there is a standard product such as the hamburger, but as the item becomes more complicated, the process has the potential to become counterproductive - unless well thought through subprocesses are built around the system. The process becomes complicated when the general public become involved. When processing someone’s claim we are dealing with humans who are distressed; they have had their car damaged, they may be in pain and have seen members of their close family injured. Ahead of them they now have much messing about and time wasting as they become embroiled in an industry fighting a civil war. They don’t want to be just another number in a factory. It is essential that any IT is there to genuinely assist their claim, thus the claims handler must have control over the system, not the other way round. The ‘computer says no’ attitude has become ubiquitous in some sectors. Smarter companies empower their staff to intervene using their best judgement where necessary and within parameters to tweak the process allowing a swift flow. Over recent years we have seen the companies who embrace the transparency technology can bring coming to the forefront. By allowing principals (insurers, solicitors, CMCs, fleets, etc) to see exactly what has happened to their file from cradle to grave, we open up our company to scrutiny from every angle. From funders’ or the partners’ point of view, this means clients effectively police the staff; the staff is aware of this and therefore are keen to ensure every case is handled correctly and efficiently. So the effective implementation of technology can indeed energise claims departments provided that it is complementing an existing correct procedure and has human staff elements in the appropriate places. Nik Ellis, Managing Director, Laird Assessors

Q: Post 1st April, there has been a flood of personal injury / claimsfocused ABSs coming through the SRA licensing process. Is this simply ‘referral fees in new clothing’ and how will they benefit / impact on claims resolution, access to justice and costs, etc?

As expected, the LASPO changes and referral fee ban has led to an increase in firms on both claimant and defendant sides taking advantage of the liberalisation of legal services and applying to establish ABSs. So is it just a way of getting round the referral fee ban, and if so does it really matter?

Looking at the ABSs set up between claimant solicitors and claims management companies first, in essence, all you have is the outsourced marketing company brought in-house. For years some people have argued that there was no need for claim management companies as solicitors should be able to attract their own clients. Well this is what you now have – a firm with its own marketing arm. You may even see fewer claims being brought, as a potential case is only considered by the one firm rather than being offered to a number of firms until one decides to take it on. The second common ABS has been the link-up between a legal expenses insurer or motor insurer and a law firm. In this situation, rather than receiving a referral fee for passing on one of their customer’s claims they handle the claim themselves via the ABS and receive the legal fees. Costs should be unaffected, as it is just a case of redistributing the same money - instead of the insurer receiving a referral fee and the solicitor paying the cost of the referral from their costs, the ABS retains all the costs. So how has access to justice been impacted? Well the claimants still see the daytime TV adverts they clearly respond to (no-one spends millions of pounds on advertising that doesn’t work – at least not for long!), maintaining awareness of injured parties’ rights. Insurers can maintain their profit margins (or keep prices down, depending on the side of the person you ask!) and continue to generate the same volume of work. And how will they impact on claims resolution? On the positive side, there are advantages and efficiencies of keeping everything ‘in-house’ so in theory claims should settle faster. There’s certainly no reason I can see that would mean slower or more inefficient claims settlement. Alan Strange, Underwriting Director, LAMP Group Limited

MC // July 2013

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The Opinions

Q: Is improving technological process enough to energise claims departments, make them more efficient and prove value to clients / funders / partners? Is culture a barrier to processing claims more effectively?

Technological advancement; adaptation and ability to change is critical in the high volume, low margin insurance claims handling arena - more so now, than ever before. With greater downward pressures on reducing premium for our customers and significant emphasise on cost controls, historically investment into claims handling (especially in relation to motor books) has been minimal. Often joined by the view, ‘why invest in areas of the business which offer high costs and low returns’. In-house claims departments have, for many years, often been deemed as inefficient and seen as prerequisite; a necessity; a tick box and in most cases, a 24/7 365 operational headache. Culturally the focus of claims departments, particularly motor, has been to build a service around the non fault party. This has been the most commercially attractive element, yet it is clear the largest impact on cost escalation is how a fault customer is managed from the outset. Fault customer management is not only a key to improved cost control but also plays a role in renewal attrition, overall customer service and brand management. Technology, although important, helps syngergise the two most important elements of claims handling - ‘skill-set and structure’ - and will only be optimised with the right claim handling set up and people, managed appropriately. A key outsourcing message has always been ‘focus on your strengths, and let us take care of your weaknesses’. Why would this be any different for claims handling? If you can reduce your overheads, generate income, improve efficiency and most of all, take advantage of highly trained staff and new technology, then this is worth serious consideration for in-house claims handling entities. Culture barriers often make it easier to outsource as resistance to change internally can prove challenging. In terms of the client, who should be at the centre of every claim? Whether it is fault, non fault or FNOE, they will receive greater added value from the delivery of market leading SLAs and KPIs. 2014 will be the battle of the brands especially as ABS ventures prove their worth, so claims handling efficiency is key. I would strongly advise any insurer or broker who handles claims in-house to review their options sooner rather than later and seek those who can add significant value while reducing their overhead costs. Michael Davidson, Head of Strategy and Sales, Goldsmith Williams

Can’t hear you, can’t hear you. Why it pays to listen on the road to an improved claims experience I’ve never read your company brochure, nor the ‘about’ section of your website. But I bet it says things like ‘we’ll take time to understand your business’ or ‘we are dedicated to helping you reach your goals’, right? Now tell me, with hand on your heart, would your last ten customers with a claim agree? If you know the answer to this, then you’re probably well on your way to delivering true customer-centricity. But if you don’t, then it’s time to be brave and ask. The shame of the matter is that many insurance firms don’t know if they’re meeting their customers’ claims expectations at all. Either because they don’t take time to ask, or worse, believe they know what their customers think already. Customer-centricity starts firmly with the customer. And that’s where you need to start too. So if you are not afraid of what you’re going to hear, try these three ‘back-to-basics’ steps: Step one – ask and listen People like to be listened to. It makes them feel valued. Pull together a post-claims survey for your customers, and ask them to rate your service in relation to every element of the claims process. Was it dealt with quickly? Were they kept informed? Ask them what their expectations were, and if you met them. Could they deal with you how they wanted? Step two – prioritise and align Using that feedback, identify and prioritise areas of weakness in your claims process. Create a ‘customer experience charter’, align customer service principles accordingly, and engender that charter amongst all – from the new broom through to your CEO. Step three – get closer to your customer Start to pull together data that is customer-centric as opposed to policy-centric. Spend time consolidating your customer data, and combine it with external data to build an intelligent picture of your customer. Technology is an enabler in improving the claims process, but don’t throw it like mud against a wall. Take time to align any IT investment with your charter. Like it or not, there’s no hiding shoddy customer service in claims because it’s the shop window to your business. So go back to basics, listen to your customers continually, and who knows – you may just end up with some new brand-promises you know you can deliver. Richard Clark, Director of Business Development, Xuber

MC // July 2013

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The Opinions

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

Existing regulation means insurers are now absolutely focussed on ‘Putting the Customer First’, and with good investment and brand reputation at stake I do believe we could actually see better service for customers. I am however concerned about the lack of clarity and worried about what new behaviours these alternative models will produce. Referral Fees always struck me as a bit of a red herring, as - well before the implementation of the ban - many parties were talking about the ‘ways around them’ and the biggest of these was to set up a Joint Venture ABS (Alternative Business Structure) with a law firm. That way no ‘dirty money’ has to change hands; business is sourced within the venture and profits are earned within the venture - easy. All sorts of options exist for using that money within the ABS but paying for the costs of defendant legal work seems to be the most regularly cited. The big issue for this is previously anyone could earn from referral fees (subject to licensing).Now what we have is completely different. If the best way to launder claimant acquisition income is through savings on defendant work, suddenly Insurers have a clear advantage. Brokers and CMCs don’t have the same model to make the ABS work well. Questions are now being asked in the Lords. On 19 June Lord McNally, said: “The law gives Parliament the power to extend the ban if necessary. If an attempt is made to bypass the ban, then the powers under the law will be revisited.” Maybe a ‘Code of Conduct’ for insurers is needed to ensure they don’t behave like some of the worse claims farming organisations of old? The last thing we want is to see even more borderline whiplash cases being encouraged to improve insurers’ bottom lines. Many insurers have argued that claimants against them don’t need legal representation in straightforward cases, will they take a different view however when pursuing a third party claim and forcing it through their own ABS can earn extra money and improve their own bottom line? Something to watch VERY carefully, I feel. David Williams, Managing Director, Underwriting, AXA Insurance

Q: Are insurance companies staying away from high risk areas or are they now, more than ever, able to look at high risk areas?

No doubt about it, risk is getting riskier. Business and manufacturing is fast-paced and complex. New ways of working mean that new risks are developing all the time. If we think about the three most important areas of evolving risk- technology, energy and supply chain risks - the worldwide insurance market is not providing the full services they need. If the situation continues, insurers could find themselves irrelevant. The insurance industry must be there to provide cover and assist businesses that create change, make things and drive the world to advance. This means a greater emphasis on innovation, either to solve existing industry issues or find ways to cover risks when there isn’t 30 years of loss information to rely on. As an industry we need to focus on innovation and deliver products that are fit-for-purpose. In practice this means creative underwriting, state of the art technology and exceptional claims talent. Claims must be at the heart of innovation, because when buying a risk transfer solution, businesses need to be confident that their claims will be dealt with fairly, efficiently and promptly. Insurers need to actively look for solutions to thorny issues and be open-minded to doing things differently. YouTube might be a popular social media platform but it’s also an effective business tool - a way for loss adjusters to access video evidence that allows claims to be investigated more thoroughly. In times of economic uncertainty we have a greater impetus and opportunity to help our clients. When cash flow is all important, businesses can’t wait around while forensic accountants pore over their accounts. Advance payments need to be available for business interruption as well as property damage. In a tough economic climate employers can’t afford lost productivity while the lawyers debate legal liability before approving rehabilitation for an injured employee. When sectors such as Financial Services rely on IT infrastructure for services and distribution, they need clear, concise and above all, relevant wordings. In 21st century banking, computer fraud and cyber extortion should be covered as standard. The world is changing faster than ever. Emerging risks need insurance solutions. Insurers should offer products that are innovative and relevant. Clients should demand nothing less. Paul Fox, UK Head of Claims at XL Global Services, XL Group

MC // July 2013

The Opinions

Q: Are niche services possible in the modern claims process?

In order to answer this question we first need to decide and understand what a niche service is; a niche service needs to be focused on a niche market. This is the subset of the market on which a specific product is focussed. The market niche decides the specific product features that satisfy specific market needs, as well as price, range, product quality and the demographic that it is intended to impact. Every product can be defined by its market niche; a niche market can be regarded as a specialised market in a need to survive amongst the competition from other companies. Our business model is based on customer service, analysing specific client needs, adjusting methods and creating services tailored to our clients needs. This is carried out by constant review procedures – essentially – ‘keeping your eye on the ball’. The Claims industry is a niche market by nature and by definition needs niche services to support a distinct segment of the market. The five key points to remember when you are considering your target market are to have a niche idea, do your market and financial research, internet marketing and innovation. Whilst the basic claims cycle is the same, recent times have seen solicitors’ costs being slashed. It is therefore very important to understand clients’ needs – giving them the very best possible service without becoming stagnant and complacent. In order to develop a niche service, you need a wish list, namely, you need to identify which type of businesses and customers you want to do business with. What is key to remember is that the basics are the best place to start and if you don’t know who you want to do business with you can’t make the contacts you so vitally need. The second key thing to remember is to focus and clarify what you want to sell. When you look at the world from the perspective of your clients’ eyes you are then able to discuss and identify specific needs. Whilst most businesses will have core business and bread and butter services, the need to ‘get niche’ in order to stand out from the crowd has never been greater. Keith Crosier, Managing Engineer, Legal and Technical Assessors.

Q: The Cooperative Legal Services has launched its first ever TV and radio advertising but for the claims sector, advertising is still judged as ‘claims farming’. Can the claimant sector ever move away from this image and how?

It is a statement of fact that there have been significant developments in the claimant sector over the last 10 years, from the manner by which firms procure business and the way in which they are structured to handle the same to the regulatory framework within which firms have to operate. It is the method by which many firms have sought to obtain new work, via extensive direct marketing campaigns and business relationships with claims management companies / insurance companies that has established the moniker of claims farming in the wider public domain and all of the negative connotations that the phrase brings to mind. It is the case, therefore, that the phrase is relatively contemporaneous, as the notion of no win no fee was and has, therefore, only really been associated with the personal injury sector for a short period of time. On this basis, I do not necessarily agree with the notion that the association is one that the claimant sector is stuck with. In my opinion, with careful management by those firms that are (or will become) the market leaders in the claimant sector over the coming years, as the post LASPO / Fixed Recoverable Costs environment settles, the portrayal of the industry away from gravy trains, falsifications and fraudulent activity to more positive images of reasoned, transparent, professional access to justice for victims of accidents can be achieved. Without a doubt, the Insurance industry is currently in the ascendancy with its well targeted media hearts and minds campaign and it is now going to be incumbent on the claimant sector, as a whole, to re-establish itself in a different light from the shadowy hinterland currently prevailing. Whilst branding from respected ethical businesses, such as the Cooperative, obviously have a part to play in returning balance to the market, from an external perspective, in reality, good branding is only one element of the issue, as ultimately the success of the claimant sector moving itself away from the claims farming tag will be determined by the behaviours which go into creating how the business works behind such brands and ensuring a quality product for claimants. Richard Forth, Managing Director, Forths Forensic Accountants

MC // July 2013

The Opinions

Q: Will the post-Jackson era see an increase in cost disputes between solicitors and their clients, along with lawyers focusing much more on straightforward cases, as suggested by recent research by the Association of Costs Lawyers (ACL)?

It is unlikely that cost disputes between solicitors and their clients will immediately increase as the old style CFAs have to run off. There is in fact anecdotal evidence the clients accept they should pay for litigation and the likelihood of them being unaware they may have a legitimate dispute. However, for the first time in 10 years, most clients will have an interest in costs and will find a voice if those interests are ignored. Clients should not expect to pay for an ATE premium and/or success fee if it is discovered at a later date they had pre-existing BTE. Even without BTE the solicitor will have a difficult decision as to when, or whether they advise their client to take out ATE insurance. If too early (especially if QOCS applies), the complaint might be the insurance was unnecessary. However if left till after a Part 36 offer or post proceedings then it can cost more and if ATE is not taken out at all who pays if there is an adverse cost order? A solicitor might look at the type and value of the claim

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before advising the client on the funding. For example a DBA on a high value case or conversely a small claims case might be more profitable than a CFA, hourly rate or fixed fee - but what would be in the client’s interest? With a DBA there might be under settlement as the solicitor’s fee is a percentage of the damages, whatever the stage of the case. Whereas for the client, solicitor’s costs obtained against the other side reduces their cost liability. Also in fixed fee regimes there might be under settlement or advising the client to take pre-medical offers to end the litigation quickly. Where there is a CFA with success fee, the oddity is that the client and the defendant will have the same interest in keeping the solicitors costs as low as possible as both have to pay. Solicitors may have to look both ways when dealing with challenges to these costs. It seems more likely that solicitors will filter on the basis of prospects, proportionality and profitability. There may also be some filtering on the basis of the clients themselves. In whose interest this all is, is another question. Peter Revell, Partner and Head of Technical Costs at Meruit Costs, a part of Lyons Davidson

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The Opinions

Unexpected consequences? W

e consider that LAPSO will only serve to increase the number of cases being litigated. Too many solicitors shy away from issuing court proceedings although it is in their clientsâ&#x20AC;&#x2122; best interests. Many of the more complex cases are not being fully investigated by insurers who lack the resources or, in some circumstances, technical understanding of the law to properly assess their insuredâ&#x20AC;&#x2122;s liability. Quite often the issuing of court proceedings will serve to bring a swift conclusion to what could be a drawn out case.

Are defendant lawyers likely to be more confident post LAPSO? There is QOWCS, so the defendant will, in the majority of cases, not recover their costs in the event that they successfully defend a claim. The incentive they once had of recovering substantial costs in a heavily litigated case backed by Insurance has now gone. They will usually get nothing. If anything we believe that this will only serve to encourage litigation rather than discourage it. However, with the advent of fixed fees for issued cases, claimant solicitors will also feel the pinch. Post LAPSO has seen a new attitude by the judiciary which is no longer exercising any discretion in relation to failure to comply with Court Orders. There are an increasing number of cases where the judiciary have taken a hard line with solicitors who have failed to comply with court directions. Judges have been told to firmly apply the rules. Even when both parties have agreed by consent to vary the directions, the courts have refused to do so and struck cases out due to non compliance. In a recent case in the Birkenhead County Court, the Judge stated that it does not matter what the parties have agreed between themselves, it is for the Court to manage the case for itself with particular guidance from the revised definition of the overriding objective. Failure to adhere to directions will be fatal for both defendant and claimant lawyers. Catherine Smith, Operations Director, Wolf Law

L L P

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The Opinions

Q: Has Jackson / LASPO led to positive changes in your organisation that you didn’t expect? Or, perhaps opened the doors to partnerships and clients you didn’t expect? How has this benefited your business?

The very core of my business has evolved from Jackson/ LASPO changes. Firstly, it has seen the birth of a personal injury caseload retail sector, with firms aggressively looking to buy personal injury WIP. Even in the last month, new entrants have arrived to acquire personal injury caseloads. For example, in the Law Society Gazette recently, DBS Law has a full-page advert. In response to the burgeoning PI retail sector, Zebra’s due diligence specialist team increased from five to 15. Although I envisaged a rise in M&A, the pace since the beginning of this year was unexpected. Secondly, it has led my business to engage with strategic partners, such as accountants, legal advisers, banks, funders and insurers. The market has forced key industry stakeholders to connect and collaborate. For law firms to flex, adapt and evolve quickly enough, a multi-disciplined approach has been fundamental. In terms of law firm clients, whilst there have been significant challenges - some of these are on going there are business positives. Firms have had to reassess financial areas such as fixed cost overheads. Assessing office space, staff resource and the positioning of technology has led to some significant improvements. Investing in technology has certainly been a key focus for progressive client law firms. Some are looking at cloud based computing, virtual offices, telecommuting and software technology to reduce overheads whilst at the same time offering legal services to the demands of the iPad/iPhone generation. With the impact of fixed fees, there are an increasing number of law firms that are certainly more focused on pushing through multi-track work. Within the last three weeks, I have been requested to scope two projects involving high volume PI practices, looking to improve systems and enhance the skills of fee earners to maximize client damages. Others are looking to niche areas such as NIHL and clinical negligence. This has been most evident since 1st April. The changes have certainly brought a baptism of fire. It remains to be seen who the winners and losers will be over the next 12 months and beyond. Zoe Holland, Managing Director, ZEBRA Legal Consulting

Q: Is the sector / the Government moving fast enough in the bid to share information on fraudulent claims? What stage is the data sharing process at, especially for motor claims?

No and don’t hold your breath waiting. I’m not sure the Government or anyone promised a level playing field; but it could be argued that if the Government genuinely wants to reduce fraudulent claims they should promote a sustained holistic strategy that tackles every element. In the police we would create ‘squads’ to tackle emerging problems, burglary squad, robbery squad etc. There was also the ‘shoulda’ squad, ‘you shoulda done this or shoulda done that’. Blessed with hindsight some would criticise post performance and sometimes introduce one-time governance as they moved to another topic. The relevance of this is having introduced the LASPO legislation, the Government shouldn’t stop there as there is so much more they could do. You can’t prevent convicted criminals working with children without allowing relevant employers access to the applicants criminal records. That facility maybe expensive but it also creates commercial opportunity. If a person is found to have been ‘fundamentally dishonest’ in a claim, or whatever criteria is considered relevant, shouldn’t all insurers, claimant solicitors, anyone about to invest their time/money in that person, be entitled to have that knowledge. Insurances companies already have intelligence which, in fairness, has cost them. I’m not suggesting such information should be provided free of charge but in the spirit of fairness, if the Government is striving to reduce legal costs and reduce fraud, here is a valid facility. As independent investigators we are fortunate to have access to various data many others, particularly claimant solicitors don’t. This is good for our business as we analyse a claimant’s previous claims history enabling us to make a more informed decision. Some data we obtain quicker such as DVLA vehicle owner details within 72 hours. This doesn’t, however, affect my view that whilst ethical standards should be ensured (with punishment for misuse) such intelligence should be available to the entire profession. SO what stage is the data sharing process at? The optimist will say, it’s early days and Rome wasn’t built in a day, but with so much on the Government agenda, I suspect such sharing will only evolve from private commercial enterprise. I’m up for it should anyone want to develop this with us. Peter Parry, Managing Director, Independent Accident Investigations

MC // July 2013

The Opinions

The business case for technological investment achieved board level momentum as the legislative framework ‘changed the claims game’, first in the context of auto claims but now for other lines of business. With better processes, a strong case management platform and comprehensive data capture, the claims function has a greater capacity to process ‘volume’ safely and efficiently. Claims can be resolved within shorter cycle times; a reduced need for ‘management’ oversight; less opportunity for claim deterioration; less space in which legal and other costs can flourish; indemnity spend reduces and an ease of communication (especially with the corporate client) of the information they really need and want. The claims team feels the investment on the ground, learning the new processes, seeing aspects of the day to day become more streamlined and effective. This brings energy and motivation to the working adjuster as they deliver a better service with a strong sense of their place in the claims world. Some challenges remain though. We aren’t only inspired by the assurance of a tightly managed diary line or a vastly reduced post backlog. Those are important indices to track and control, but people are motivated by the prospect of adding value to an employer and to their clients by bringing something greater than ‘processing capacity’ to the party. Adjusters can do important things that a claims management system can’t. They can think proactively, can evaluate complex and conflicting evidence, can make strong, robust value judgments, determine realistic objectives and set strategic plans in place for achieving them. As part of a dedicated group focusing on a particular risk/risks, an adjuster can also learn the ways of the corporate client, its drivers and its key processes and people. That learning can deliver further streamlining and efficiency in evidential capture and speed of joined up decision-making as part of a service team and the corporate market knows this. It may not have been intended, but embracing the values of the Aldermanbury Declaration could lead the strategic mind to a balanced solution, and ultimately help the industry as whole articulate the true value of insurance as the great global facilitator it is. Chris Gough, Consultant, Mills & Reeve (on behalf of Willis UK Retail)

MC // July 2013

Q: Medical report fee uncertainty - Is the MRO Agreement (MROA) in jeopardy?

The MROA is a voluntary market agreement between a number of insurers and certain medical reporting organisations, signed in May 2007. The Agreement sets out a cap on the level of fees chargeable for GP, orthopaedic and A&E medical reports for cases valued up to £15,000. Whilst the Agreement remains voluntary, its relevance has been questioned when dealing with fees charged by non-MROA agencies. Two recent cases have highlighted the confusion: Charman -v- John Reilly (Civil Engineering) Ltd and also, Kavanagh -v- Powell. Under the MROA, the fee for a GP report is £200 (if paid within 90 days). In Kavanagh, the defendant argued that the fee claimed was unreasonable as it exceeded the MROA rate. However, the claimant successfully argued as follows: MROA rates are irrelevant; simply referring to the MROA rates did not render the fee claimed as unreasonable; the paying party did not object to the instruction of a non-MROA agency; the paying party produced no evidence of lower fees charged by other non-MROA agencies; the BMA recommended fee for a written report without an examination, based upon 30 minutes work, is £124.50; the index case involved a consultation and examination and so it was reasonable to double the BMA recommended fee, and; the remaining, in approximate terms, £50.00 was reasonable for the agency’s work. Kavanagh will encourage non-MROA agencies and concern the MROA agencies as they may no longer be able to compete. Over the last few years there have also been some medical agencies set up by claimant lawyers. These lawyer-controlled agencies have often charged fees far in excess of the MROA rate. They serve their own law firm and so do not compete freely within the market. Furthermore, they are prepared to fight insurers for the additional fees as they have a vested interest. The Agreement that has worked so well for both MROs and insurers has now been thrown into jeopardy and there is a real chance of it failing. The best way to bring certainty back to the market and resolve the issue would be to incorporate the MROA fees into the Civil Procedure Rules (CPR). Both the ABI and AMRO support such a move and have recently sent a joint letter to the MoJ. Although the MoJ is currently reviewing medical reporting arrangements, there will still be a significant number of medical reports that will be processed under the current system before any changes are likely to be implemented. Bippon Vinayak, Chairman & CEO, Doctors Chambers

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The Opinions ????

Cost disputes: the rise of solicitor-client negotiations?

t is fair to say it has always been a rare event for a claimant PI solicitor to charge solicitor and own client fees at the conclusion of a successful case, particularly since the introduction of CFAs and recoverable additional liabilities. One of the intentions of the Jackson reforms was to ensure there was more accountability within the claimant sector and that the claimant themselves had some ‘skin in the game’, with a view to ensuring their lawyers manage cases efficiently and keep costs in check. Under the previous arrangements a claimant had little if any interest at all in the amount of costs incurred by their lawyer. One thing very few people have discussed is the potential for this to create disputes between the claimant and their own solicitor. A level of scrutiny never previously experienced in this sector will become more acute as claimant lawyers routinely make deductions from damages and make a charge to their own client. We must remember the rules regarding solicitor and own client costs are extremely complex and not something PI lawyers have had to grapple with in the past. Those rules are very much in favour of the consumer and even a small error within the retainer could be fatal in terms of the solicitor and client position. This in turn could have a knock-on impact in relation to inter-parties costs because the spectre of the indemnity principle still looms large. I saw an advert recently in my local supermarket from a cost company touting for business: ‘Have you been overcharged by your solicitor?’ it read. It is offering to operate on a no-win-no-fee basis - attractive to the general public quite simply because there is no risk. I think we now face an era whereby claimant lawyers will not only have their fees scrutinised by opposing cost negotiators but also by their lay client who could themselves be represented by cost experts whose interest is to minimise their exposure. This sounds like the worst of all unintended consequences. It remains early days in the context of these reforms - we will not see the full impact of the vertical and horizontal extension of the portal for some months. The only thing we can say with some certainty is that life will be very different. Anthony Hughes, Partner & Chief Executive, Horwich Farrelly Solicitors

00 43

Q: Is improving technological process enough to energise claims departments, make them more efficient and prove value to clients / funders / partners?

The speed in which insurers receive information in the aftermath of an accident is imperative in their necessity to completely manage the repair process, specifically their need to control key-to-key financials.

And with more and more manufacturers looking to line-fit vehicles with their own telematic systems which provide real-time data, the race to deliver that information is firmly on especially with introduction of eCall, a European Union initiative intended to bring rapid assistance to motorists involved in a collision, little over two years away. Without a bespoke insurer-led telematic system, an insurer primarily relies on the driver to inform them of an incident, traditionally this can take hours, days and even weeks. But Alan Cottrill, Commercial Director for Trak Global Solutions and head of its Risktrak division, stresses that insurers should be implementing tailor-made telematic systems with the ability to reduce lead times down to seconds in order to maintain control over potentially spiralling repair costs. He said: “Vehicle manufacturers who equip their vehicles with their own telematic systems clearly have the ability to steel the march over insurers in managing a vehicle’s repair in the event of an accident. “I fear that as it becomes more prevalent, insurers will undoubtedly lose their ability to control costs. Insurers currently have close relationships with their supply chains and use their position to control repair costs, be it by dictating labour rates and/or reducing the necessity for using non-OEM parts. “Allowing manufacturers to control repairs will enable them to dictate their own rates and ensure their own, sometimes more costlier, OEM parts are used. This can only drive the cost of repairs up which, ultimately, will have to be met by the consumer with increased premiums.” Mr Cottrill added: “Our technology ensures an insurer is directly notified within seconds of an incident occurring and thus ensures the full key-to-key control of the repair is managed directly by them. Undoubtedly, in my mind, consumers looking to avoid escalating premiums will turn to those insurers able to maintain their lower costs by using telematic systems.” Alan Cottrill, Commercial Director, Trak Global Solutions.

MC // July 2013

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The Features

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The Features

MC // July 2013

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Features ????

00 47

Brand Loyalty in the over 50’s - is it possible? Insurance is frankly not the most riveting of products; rarely does the insurance customer of any age wake up with the excitement of the thought of renewing their home insurance that day, or sorting out the insurance for the dog.

xclusion clauses, comparison sites, engaging adverts all have their part to play in the love hate relationship between the customer who needs insurance and the underwriter who wants to provide it, at minimal risk. With buying powers always shifting, the need to save money paramount and on line purchasing the norm, where can the customer service and loyalty be gained in this disconnected market sector, how can the underwriters keep the customers brand loyal? Ostrich have encountered such problems as its visitors seek a wide range of diverse underwriting services linked to ageing. The Ostrich consumer audience of the 50+ age group control 85% of the disposable income in the UK and are the first generation to have been advertised to all their lives, but can their loyalty be bought and at what price? The nearly 7 million carers in UK working engaged or volunteering in care also account for a huge part of the Ostrich audience and here again where their underwriting needs are exacting, could delivery of product and service trigger loyalty? How difficult can it be to get insurance? The answer is often …very difficult. The perception of residential care is changing. Some active elderly choose to downsize to go into care, freeing them up to travel and do things with or without a carer at their side. They are living longer and travelling further, so they need travel insurance. Here’s the first brick wall to that later life adventure: buying upper age and existing illness travel insurance. Its out there, we have a partner who will provide it, but it’s not the norm. Why? Life age is increasing, medical science keeps us going longer, and travel broadens the mind. The underwriter is less enthusiastic about the elderlys’ desire to travel.

If the potential customer is not so agile and residential care is of a more traditional style- then moving those treasured possessions from home to care home is the norm. They insured them at home, so they want to insure them in their new care home. Very few underwriters are willing to insure your personal effects in a care home, a less than enthusiastic reaction to a growing market need and an underwriting opportunity. Where Dementia patients are triggered by objects that stir memories, is it right that because insurance can not be underwritten against those objects that they must be removed from the care home and kept with relatives to be brought in only when they visit? Should underwriting effect so strongly a quality of life and do underwriters actually understand the wider impact of their actions? Carers too have issues where insurance and unsympathetic underwriting affects their ability to earn. Carers are often young, they could

fulfill roles as care at home workers, but rarely are able to do so due to the excessive costs of insuring them in company vehicles. Using their own cars may be an option, but its doubtful they will have a 4 wheel drive vehicle essential for the care at home worker in winter as the insurance will be too high. Many care homes now welcome dogs and cats and other pets, some even offer dedicated dog walkers.Again the thorny question of underwriting rears its head as the pet is now living in a more public place…with all the associated risks that might bring. So ‘normal’ pet insurance has to be adapted for care home living. So might this sector be made brand loyal? We believe so. Not necessarily on price point as a deciding factor, not just on ease of purchase on line, but by actually providing a bespoke underwriting service, through the growing Ostrich brand that pre empts and recognizes the challenges and advantages of ageing, offering a range of insurance products that meetthe ever changing needs of an ageing population and their carers. Would you want your mobile phone and your iPad stolen and to be uninsured? It may surprise you to know how many elderly in care have both, and how many are not insured. As Insurers, when you are on opposite sides, as James Dalton, ABI stated, “agree to disagree and concentrate of the areas to work together on” the commonality – for Ostrich that’s going to be something of a mantra as we work with the underwriters to structure new innovative insurance products and ideas for the benefit of our visitors, carers and the care industry… and as a result work towards re establishing that old fashioned thing… brand loyalty at renewal! Ostrich… taking care of life. Laurence Kelly, CEO, The Ostrich Group.

MC // July 2013

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Features

Interview with... Ben Fletcher,

Insurance Fraud Bureau Emma Waddingham speaks to the Director of the IFB, to understand its role in fighting fraud in the claims industry and what next steps are being taken to move towards a more collaborative working model with the wider claims industry, not just insurers.

Q A

Why was the IFB established?

The IFB was set up in 2006. The concept behind it was to pool all industry data together on fraud to tackle mainly significant, organised insurance fraud crime. By the late 1990’s, the insurance industry had set up its own fraud teams and were starting to spot mass staged / induced accidents but they weren’t sharing data. Motor insurance is a compulsory product; insurers were holding vast amounts of data – as does the Motor Insurance Database (MID). An insurer might spot an individual claim that looks suspicious, and would risk rate that in a certain way. But if they knew there were 60 almost identical cases in the system from one claimant, the way they would view that one policy or case would be different. That’s the point of the IFB, to consolidate that data across the industry and to spot, target and investigate fraud. We use sophisticated software, Detica’s Net Reveal, which takes in all of the data, ingests it and builds all up a list based on information across all of our clients. The documents are taken onto the system in on a weekly basis and the software pulls off all information onto the database names, addresses, phone numbers, etc. The vast spider’s web is then broken down into high risk networks. What the data doesn’t do is look at two claims made around six years ago. What we’re looking for is cross-industry, organised crime networks that are looking to make millions of pounds out of exploiting the industry.

Q A

How is it structured?

The IFB is a not-for-profit organisation, funded for by our clients: insurers, brokers and selfinsured organisations. We now have approximately 50 customers at any one time, who represent 97-98% of the personal lines motor market by market share. We have a board of directors made up of senior executives across the industry and while the IFB is funded by the insurance sector, it is a completely neutral body. Its role is the disruption of cross-industry insurance fraud and the supply chain for organised criminals involved in this type of fraud.

Q A

Is organised motor fraud still largely undetected? Lots of the gangs we look at are Level Two organised crime groups who are often involved in other types of criminality across different county borders, such as other financial crimes, drugs and firearms; police targets. Criminals tend to recruit people in the community to take part in claims, or they simply make identities up. So we work with police forces to take out the top organisers to disrupt the networks.

Q A

How successful has that been?

It’s been incredibly successful. Since 2006 we have achieved results, with 800 people being arrested and around 200 years in prison sentences being handed down. It you look at the prosecution data pre-IFB, it’s very unusual to see any insurance

Ben Fletcher, Director, Insurance Fraud Bureau As Director of the Insurance Fraud Bureau (IFB), Ben Fletcher leads the insurance industry’s collective fight against organised fraud. He also sits on the Insurance Fraud Enforcement Department’s Steering Group; the ABI’s Financial Crime Committee and Chairs the Insurance Fraud Register Steering Board. Prior to joining the IFB in 2007, Ben worked in a variety of counter-fraud roles within the insurance industry, setting up and managing fraud teams.

“What we’re looking for is cross-industry, organised crime networks that are looking to make millions of pounds out of exploiting the industry.”

MC // July 2013

Features

fraud prosecutions. When the IFB was first created, a term coined a lot was the ‘power of the collective’, the idea that the insurance industry is far more powerful if it collaborates together. While there are a number of commercial aspects in the highly competitive market, fraud is an area insurers have to work on together. The message we sent out to perpetrators is, that we’ve got the data, we know who you are and we’re coming after you. Our work with IFED [a specialist police unit] demonstrates that if you get caught of conducting insurance fraud then you’ll be prosecuted, with serious consequences. If you are a career criminal, arguably, a certain amount of prison time is an occupational risk. What works better at this level is for the Police to force the criminal to strip their assets instead. Often that is far more of a deterrent than serving 6-12 months in prison. A lot of the time, organisers are still reliant on a certain number of people in community willing to take part in scams, such as induced accidents, for two reasons: 1. It’s seen as a victimless crime; 2. They think or are told there is little chance of getting caught. They are wrong on both of those aspects. With regards to the first point, the IFB and ABI have been working hard to get the message out that it’s not a victimless crime - we’re all consumers and insurance fraud costs the average policy holder £50 per year. The second message is that you will get caught! Some of the cases we have run have led to individuals in the community who give their cars over for cash for crash scams are prosecuted, as well as organisers. This sends a strong message to the public. Not only are cash for crash scams fraudulent, they are putting people’s lives at risk. This is highlighted by a case in the Thames Valley area earlier this year, which resulted in a fatality. We need to prove there will be serious consequences. Six months inside is a strong deterrent for a member of the public.

Q A

How are you working collaboratively with the insurance and wider sector? We work with insurers and have done since the IFB was created. At end of 2011, in addition to the work that we do in terms of crash for cash, we started to tackle another problem facing the insurance industry - ghost

MC // July 2013

register the policy, manipulates the data, which then appears on the MID database to make it look like they have insurance. While the car would be insured on MID, the policy has been tweaked so much that it’s not worth the paper it’s written on. In reaction to that, we created a broker model in 2011. That was designed to allow brokers to share data and identify ghost brokers and we’re looking at developing that model further. The IFB is in talks with the BIBA about how we build an extended broker model.

Q A “For organised groups, LASPO will have made very little impact on their determination to pursue a fraudulent claim. We are talking about organised, multi-million pound fraud here. They are career criminals, perpetrating crime on a massive, organised basis. Just because the funding mechanism is changed, it doesn’t affect their income.” brokers. This is where we have seen an increase in people placing adverts online – ranging from Gumtree through to Facebook and on websites, brokering insurance services. Some of them look genuine while others look totally false – selling false driving licenses and disabled badges at the same time as ghost policies. What happens is that the consumer goes to ghost broker. The ghostbroker then takes the fee for the policy. The ghost broker goes onto the internet to

Are there any difficulties in expanding the existing motor fraud model? One of the reasons the IFB has achieved what is has is because insurance companies are largely quite similar. They commonly have a fraud team of a certain size so the IFB has a one-size-fits-all model for motor. The software takes all industry together, finds potential suspect network and develops the data into an intelligence product. It develops a plain English report on what is happening in a particular area. The insurance company’s fraud department has the resources to process and apply that information. When you start dealing with organisations like brokers, CMCs and lawyers – which are more fragmented – a one-sizefits-all approach won’t work which is why we have to consult and consider other models.

Features

Cheatline

The IFB’s mechanism to report insurance fraud, Cheatline, is a free and confidential vehicle for the public and for professionals to use. There have been increasing reports of fraud through the IFB’s public-facing Cheatline service between 2010 and 2012: Year

Number of Reports

2010

2,956

2011

3,786

2012

4,595

In the first quarter of 2013, the IFB has already received 1,617 reports through Cheatline, which clearly shows the upward trend continuing. In terms of organised fraud investigations managed by the IFB, it is currently assisting 53 police operations, which could be valued in excess of £67 million in potential losses to the insurance industry. For further information on Cheatline, visit www.insurancefraudbureau.org/report/ or call 0800 422 0421 to report a suspicious case.

Q A

So what is the way forward?

In reality, the industry has an undetected fraud problem worth £2 billion to the sector. Organised fraud is responsible for about £400 million of that. Beyond 2014 – and we are in talks with the insurance sector over our strategy – we know there are ways for us to evolve: • Expanding types of insurance fraud that we can look at outside of motor; • Share details on fraud that can be investigated in the same way we investigate other fraudulent issues; • Develop our strategic partnership with the SRA and MoJ. The MoJ has details of the IFB, to encourage lawyers and CMCs to share intelligence with us through schemes such as Cheatline. As yet, we have been contacted by CMCs for them to report fraudulent activity but nothing from lawyers.

Q A

Will the attractiveness of fraud persist as claim funding opportunities decrease? Will LASPO mean there will be a dip in the number of fraudulent claims? I don’t think anyone knows the real answer to that yet. I read the recent issue of Modern Claims; it was interesting as the general view was that we don’t know what’s going to happen. Generally yes, but for organised groups, LASPO will have made very little impact on their determination to pursue a fraudulent claim. We are talking about organised, multi-million pound fraud here. They are career criminals, perpetrating crime on a massive, organised basis. Just because the funding mechanism is changed, it doesn’t affect their income. The gangs we see also include entirely inflated cost claims into the system. For instance, a recovery fee for a service that never existed; hugely inflated damage claims to the vehicle; inflated credit hire claims and personal injury claims that have also been inflated. Or the ‘claimant’ either doesn’t exist or know they are having claims made in their

“Lawyers should be able to see there is something not right with those claims, on the basis that logic would say you can’t have 100 claims from the same referral source where there are clear incident patterns and trends, such as how and where the accident occurred.” name. It will have an impact for smaller unsophisticated gangs who would struggle to make a profit. We currently have 52 live investigations of fraud and another 38 developing, so 90 investigations that represent over £100 million pounds exposure to the industry, more than double a few years ago.

Q A

If they are claiming exaggerated and / or non-existent damage, then there are assessor companies in on the game – do they get prosecuted? We see different models. In some cases, companies are complicit, on board in the scam and know exactly what is going on. In other cases they will own the companies and, again, in some cases exploit businesses trying to provide a genuine service. So we see the full spectrum. People that run CMCs have been prosecuted and engineers have prosecuted, so yes, they can’t get away with it.

Q A

Are you looking to develop a sector-knowledge relationship with wider industry organisations, such as claimant lawyers? The ABI has been in talks with MASS and APIL about sharing data. The IFB has played a part in that those discussions and we’re happy to have that dialogue. I’m happy to speak to them about intelligence sharing but it needs to form part of the discussion agreements that they may have with the ABI as well. The ABI is, on behalf of the industry, helping to develop the strategy for us to engage and share data with claimant lawyers – but this doesn’t preclude CMCs and lawyers from sharing intelligence with the IFB. If they think they have information on a crime, then we would welcome that data being shared with us so we can investigate it in the same way we would with insurance companies. There are clear trends in cases we have seen that lawyers should be able to spot too. For example: where a corrupt CMC – essentially nothing other than a front for criminal activity - refers fraudulent cases to law firms. Lawyers should be able to see there is something not right with those claims, on the basis that logic would say you can’t have 100 claims from the same referral source where there are clear incident patterns and trends, such as how and where the accident occurred. My main message to the legal sector though, is that we can receive intelligence and reports from any organisation and we are happy to help so that we can investigate.

MC // July 2013

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00 53

Can’t change, won’t change? Don’t move now and you’re dead. Tony Walton’s dramatisation of a man on the edge in the legal sector might seem a bit far-fetched but for those sticking to the ways of old and failing to embrace what customers really want, is he really far off the mark? Brian’s Week Saturday: Denial.

With friend and rival solicitor Harry at the Innovative Lawyers Awards Ceremony. Announcer: And the award for Most Innovative Chancery Barrister goes to... Crispin Fforbes-Fortescue. Harry: Good old Crispin. That’s eight years in a row now, isn’t it? Brian: At least. These Innovation Awards aren’t as good as they used to be, though. I preferred them when all you could see was cigar smoke. Harry: (Tongue-in-cheek) Have you been innovative this week, Brian? Brian: Too busy, old chap. Oh, wait a minute, yes I have. My I.T. manager was telling me we’re now on Twitbook. Harry: I’ll drink to that! Pass the port. (Pause) Careful! You’re spilling it on me cummerbund, you old duffer! Meanwhile, on the internet. Whispers that @Ozymandias & Co are the next to go under. Who’s sneering now, Brian?

Sunday: Anger.

The Sunday Telegraph leaks a government report criticising the legal profession and recommending further liberalisation and de-regulation. Brian rings Harry. “...Bloody Tories! Alright, I know I’ve voted for them for forty years, but bloody Tories, bloody gutter press, bloody internet, bloody Bill Gates, bloody punters, bloody partners, bloody staff...” “Brian....” “Bloody Germans”. “Brian?” Anyone’s fault but yours, Brian? @ Ozymandias & Co. Enjoy Paxo!

Monday: Bargaining (badly).

In the Newsnight Studio... Paxman: Yeeeees. Another government report published today says once again that all lawyers are rubbish at everything. And with me to defend his profession against these allegations is leading solicitor Brian Ozymandias, senior partner of

Ozymandias & Co. Mr Ozymandias, all lawyers are rubbish at everything aren’t they? Brian: Not at all, no. Paxman: All lawyers are rubbish at everything, aren’t they? Brian: No. Paxman: All lawyers are rubbish at everything, aren’t they? Brian: No. Eight identical questions later. Paxman: All lawyers are rubbish at everything, aren’t they? Brian: Well, I suppose... Paxman: That’s it! All lawyers are rubbish at everything. No time for tomorrow’s headlines. That’s all from the Newsnight studio. Goodnight!

Tuesday: Depression.

Walking down the office corridor, muttering. “Management consultants. Don’t know why I bother. Two and a half grand a day and all they do is answer a question with another question...” Enters the meeting room. “Martin! Great to see you again! What have you got in store for us today? “That depends. Where do you want to be in five years, Brian?” “As far away from all this as possible after last night. Preferably in months not years. How do I do that?” “Stay exactly where you are. You won’t recognize the place soon. Everyone knows there are changes, but most lawyers don’t ask why. ‘Innovation’ is the wrong word. Something new for its own sake is pointless. I prefer ‘improvement’. If it makes people

enjoy what you want them to do and do it more often, then you’re onto a winner. Power steering and electric windows? Dishwashers? Google? Do you remember what life was like before they came along? “They say the future of legal services is all about technology and that you’ll be better off with a computer sciences degree than a law degree. I wouldn’t go that far: you’re a law firm, not an internet café, after all. But ask yourself why everyone hates us - too expensive, slow, unpleasant surprises, or just plain unpleasant. Then look at what people like - something for nothing, using the internet, having it all on their smartphone. Everyone’s raving about people who are starting to offer legal services that way.” “Thanks, Martin. I think.”

Wednesday: Acceptance?

On the psychiatrist’s couch Brian: How many sessions is this, Doc? I’m worried this might be costing me more than I can afford. Dr. Melfi: I charge by the hour, so you know exactly where you stand. (Pause) Dr. Melfi: Tell me what happened yesterday. Brian: Martin’s right. I’ve got to change. I just can’t. I grew up being told that precedent was king. Don’t do anything that hasn’t been done before. I’m starting to realise that’s just for judges and academics. I’ve got to be a businessman. Doing what everyone else has always done is the worst thing I can do. Dr. Melfi: So what are you going to do? Brian: That’s why I’m here. I just can’t do it. At least I want to wait and see what everyone else is going to do first, then maybe decide. I... (Brian’s mobile rings)... can I take this? It’s my bank manager. RIP @Ozymandias & Co. Collapsed today. 300 jobs on the line. Once proud, nothing else remains of the old swagger now. Tony Walton is Managing Director, Questus

MC // July 2013

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00 55

Be honest Dez Derry asks claimant lawyers to be honest and reassess often misdirected, stale and unmeasured marketing efforts, in a bid to help entities make the most of the fast pace of change and increasing consumer need for support and guidance in the claims process.

ince the changes in the legal industry have come into play, it has fast become apparent that lawyers need to change their strategic agendas and the direction of their marketing and digital marketing. It most certainly appears to be on the top of their agendas. But knowing where to go for the right advice, products and services seems to be where they fall short at times. As anyone who has run a business will know, what is a top priority can fast fall to the bottom of your list once it starts to drain your time and resources.

Arm yourself

Once lawyers seek the right help, and their campaigns are up and running, they are often not provided with the right tools and advice as to how to keep an eye on them. How do they know that the campaign is doing its job? Who is providing them with analytics and information? What is it being compared to? Not only are the analytics and success of such campaigns being pushed to the sidelines, but the actual brands that they have built up need to change. No longer is it a market aimed at B2B, but the consumer now stands directly facing these legal firms. Where once stood a corporate image aimed at those ‘in the know’ is a consumer who doesn’t understand, nor have any interest, in the legal and technical jargon. The media has most

certainly seen to it that the personal injury market gets a bad rep. The so-called ‘claims culture’ highlights that fraudulent claims are being made every day and that ambulance chasing lawyers are waiting round every corner. This only seems to encourage those who have no claim to make one and those who are fully deserved of a claim to avoid making one. There are consumers out there who are frightened to make a claim

“This industry - and its partnership with digital - is still in its infancy. So anyone who isn’t scared to really get to the heart of the matter and measure what is happening would be lying.” for fear of their employer, colleagues, friends or even family viewing them in a negative light. What might they think? How could this affect my job? Could I be fired? Will it be stressful and time consuming? How do I know who is the best to help me with my specific claim? It is a cluttered market out there with the direct needs of the consumer not always being addressed.

Brand redirection

It is time to change the brands, alter the perception of the claims market and create a much softer and more personable brand. Brand awareness is key. But before you can make people aware of your brand you need to define what your brand is. What do you want it to mean to your consumer? How do you want to be seen in a very competitive market place?

Knowing who is your consumer is key. Demographic tools and profiles are of great help, and it is from this that you can build up an image of exactly who your consumer is. Only then can you begin to market to them. This industry - and its partnership with digital - is still in its infancy. So anyone who isn’t scared to really get to the heart of the matter and measure what is happening would be lying. But you need figures. You need to be working in unison with a full service digital agency who can track where your traffic is coming from, who is analysing your website to see where people are heading to most and who is doing everything they can to get you ranked on the top page of Google. Other sectors are already ahead of the game. The retail sector has been doing this for years. There is no reason why the legal sector should be any different. It is now just as much a consumer facing business as retail.

A recipe for success

Throwing money at general marketing will get you nowhere. Having a targeted and strategic approach is vital. But the only way forward is by speaking to a full service digital agency with a proven track record, case studies and plenty of ideas up their sleeves. If you are serious about growing your brand and increasing your leads then this is the area you need to focus on. Once you have this in place and the right plan, you will have a recipe for success. Dez Derry is the CEO of MMA Digital.

“Once lawyers seek the right help, and their campaigns are up and running, they are often not provided with the right tools and advice as to how to keep an eye on them. How do they know that the campaign is doing its job? Who is providing them with analytics and information? What is it being compared to?”

MC // July 2013

Features

A net with big holes Tony Rand asks if technology really is providing all the answers to the challenge of claims fraud, considering the weight of fraudulent cases pervading the system which is supposed to have ‘safety nets’ built in.

nsurers make great play of the vast cost of motor insurance fraud. However, I have to ask myself how they can quantify undetected fraud – and if fraud has been detected why did the insurer pay out on the claim in the first place? That aside, insurers are not the only victims of fraud. In my own companies, Vamco Ltd and Kingsley Law Ltd, we offer credit repair as a mainstream product service. Every day we are investing considerable sums of money on claims with the expectation that the cost will be recovered from a third party insurer. Liability is rarely an issue. However, for every £100 at risk through fraud we have to do £1000 of business to make good our loss. And that is a real cash loss, not just forgone profit. Fraud is therefore a major issue for us. Acting on fraud About seven years ago we experienced a sudden increase in fraudulent activity, and as a result had to write off a significant amount of money. Not significant to an insurance company, but unacceptable to our company and particularly galling to me as I own the business! We therefore carried out a thorough review of our own processes to prevent or at least minimise the risk of a fraudulent claim escaping notice. The first stage was to review our own internal audit procedures in the light of our analysis of failed claims.

From this we developed a six point claims assessment tool, which has now been adopted throughout the company and every new claim is scrutinised using our own standard methodology. All new claims handlers receive training when they join us, and we hold regular refresher courses. The purpose of this methodology is to deconstruct a claim into its logical component elements, and satisfy ourselves that each part of the claim, and the collective whole, are credible. We then researched all available sources of information about vehicles and their drivers. We subscribed to Netfoil and still do. We also make use of a number of data sources freely available on line. However, our experience is that database generated information might indicate a potential risk, but is insufficient to provide conclusive evidence of fraud. The challenge is therefore to design and implement an approach to fraud detection which is cheap, fast and reliable. How successful have we been in achieving this objective? Self-help needs to be industry matched Fraud detection is now imbedded naturally in our claims management process and all staff receive training in our methodology. It’s not rocket science and none of our claims handlers have any previous experience of motor insurance or motor insurance claims prior to joining our business. It would still be a big step forward if the DVLA were to agree to provide ready access online to more information from its own vast

“Our own experience is that well designed internal procedures, based on a simple and logical methodology, are more than adequate when it comes to detecting and validating high risk claims.”

MC // July 2013

database which is already in existence for tax collection purposes. In comparison, we also subscribe to the Companies House Direct service, an excellent model for public sector data management and distribution, and one we always refer to when deciding whether we want to do business with a new work provider. Vehicle ownership should impose the same obligations of disclosure as corporate directorship. So where does all this take us? The insurance industry and its advisers have already spent vast sums of money on automated fraud detection technology. By all accounts this has failed to prevent the continued high level of reported fraudulent activity. One would have to conclude that investment in additional technological solutions has reached far beyond the point of diminishing returns - there is little point in throwing good money after bad. Our own experience is that well designed internal procedures, based on a simple and logical methodology, are more than adequate when it comes to detecting and validating high risk claims. Of course, training and structured monitoring are essential to ensure that procedures are followed properly. These procedures would be further improved with better access to DVLA data, which should be opened up to insurers and solicitors, if not the public at large. The ABI lobby would be serving its members well, and all others at risk from misleading vehicle owners and claimants, if it were able to generate the political will necessary to overcome bureaucratic inertia. The cost would be negligible. The benefits are incalculable. Defendant solicitors should, however, be more than satisfied with the result. Tony Rand is the Managing Director of Vamco Ltd and also Kingsley Law Ltd.

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Features

Claims agility Investments into operational cost control and capacity in the claims arena isn’t simply within the confines of the legal team as insurers are looking to maximise their claims ability and agility, as Matthew Scott reports.

he recent changes to the personal injury compensation process have produced acres of commentary about the impact on claimant lawyer business models. Less has been said about the impact on insurance claims teams, which is a little odd! Odd, because insurers need to ensure their claims teams are operating efficiently in the new world. This will unlock the claims indemnity savings that should be possible and justify the validity of our campaign for reform. Timescales for decisions by defendant insurers on legal liability are shorter for most Employers and Public liability cases from 31 July 2013. The upward expansion of the existing MOJ Scheme and Portal for motor injury claims means this process now applies to the majority of new motor injury claims. Changes to costs rules, including the introduction of Qualified One Way Costs Shifting (QOCS), mean significant shifts in the consequences for decision and indecision within operational claims teams. All these changes make for a greatly changed context in which insurer injury experts must perform. Make the wrong operational choices and performance delivery will be suboptimal and the consequent results unacceptable for everyone; even if it looks like a saving on paper now.

In control

It’s been pretty clear for ages that reform would come. It’s only been the fine detail and the timing of changes that remained uncertain. At NFU Mutual we’ve chosen not to obsess about the uncertainties in the fine detail. Instead we’ve been concentrating on the things we can control; building on our successful implementation of the RTA ‘Low Value’ scheme in 2010. As ever,

our focus is on ensuring we understand the critical performance inputs necessary to deliver a quality service and keep our costs, and our claims bill, under good control. You might be surprised I mention ‘service’ in the context of ‘third party’ injury claims. You shouldn’t be. Our members know that dealing effectively and fairly with the compensation claims made against them is in their best interests. They expect us to make quick, accurate, liability decisions, protect them against fraud and to pay fair compensation promptly where they are at fault. The Jackson reforms adjust the environment in which we must deliver these goals – but the goals remain consistent.

claims teams – to ensure they fully understand the rules and are clear on the performance they must deliver in order to get the results we desire. We’ve re-engineered some of our processes to speed up decision making and to ensure that potentially fraudulent claims are identified and routed to our counter fraud experts even more quickly.

High speed investment

We have our own team of claims investigation experts. Their capability to quickly meet with our customers and conduct prompt investigations will be a critical factor in meeting the new process requirements. We’re backing their ability by investing in new mobile technology to speed up production of reports and communication with our claims teams. NFU Mutual doesn’t have a ‘referral fee gap’; we’ve never taken them. For a variety of reasons an ABS model holds little attraction to us at present. We are, though, redefining the service we require from our defendant legal panel; based on the quality of their services and their success in winning the cases we choose to resolve in litigation. Uncertainties still abound. Will claim volumes fall? What tactics will emerge from claimant firms? I don’t see much point in speculating. At NFU Mutual we’ll keep focusing on what we can control; our ability to perform and our agility to adjust our performance as circumstances change. That’s the key to sustained excellence.

So, our approach has been to determine how best to use our existing resources to handle claims to high standards of excellence in the new regime. NFU Mutual is rolling out new a new IT infrastructure and a document image system to all our Claims units in 2013. We were making this system investment anyway, but taking the time to design it with the future in mind was vital. We’ve developed our new case management system to align with the requirements of the new injury claims environment. It will free up the time of our case handlers to use their expertise to make effective decisions on cases instead of being bogged down in administrative tasks. We haven’t yet integrated our claims system with the MoJ Portal. That may come, but it will be the capability of our people that will be the key differentiator for the future.

People empowered

We’ve invested in considerable additional training for our technical

“Make the wrong operational choices and performance delivery will be suboptimal and the consequent results unacceptable for everyone; even if it looks like a saving on paper now.”

“Our ability to perform and our agility to adjust our performance as circumstances change. That’s the key to sustained excellence.”

Matthew Scott is Chief Claims Manager at NFU Mutual www.nfumutual.co.uk

MC // July 2013

Features

Game, Set and Match for the Claims Industry? Modern Claims attended the annual I Love Claims conference at the Ricoh arena in Coventry, to get the low down on all the latest updates and thoughts from industry thought leaders in the claims sector. Charlotte Parkinson, Modern Claims, reports.

he fourth annual I Love Claims conference was more highly anticipated than ever before this year, as leading insurers, brokers, lawyers and other claims professionals gathered together to keep up to speed with the latest updates and changes in the sector. Upwards of 400 delegates gathered in force to listen to the first panel session of the day, which focused on the Jackson reforms and LASPO and how these alterations are affecting those in the claims sector. A diverse assortment of panellists including: Donna Scully, solicitor and Immediate Past President, MASS; Mark Savill, Managing Partner, Lyons Davidson and James Dalton, ABI, all smoothly chaired by Chris Ashworth, conference organiser and owner of Crashworth. Chris Ashworth was quick to kick of the debate and ask the panel what they thought of the claims communities’ reaction to the legal reforms. Donna Scully, an open

advocate of access to justice for those with genuine motor claims, went first: “The response from the claims community thus far has been to bury their heads in the sand. We must not forget the initial reason these reforms were introduced, because of the amount of fraud taking place in the sector. It is really far too early to say how big the effect will be. At the moment the amount of claims has not reduced, if anything they have increased - according to the recent statement issued by the Portal.” “The costs for the Portal will be going down at the end of July – what we are all asking is will the Insurers follow suit and lower their premiums? I don’t see how the reforms will have a positive effect on fraud, as there is now less money in the system and what we need to be avoiding above anything else is the birth of a ‘nothing to lose’ culture,” she adds. While Scully notes she would be prepared to wait and see, she stressed she would be ‘very sad’ if the reforms don’t achieve what they set out to.

A win for the consumer?

The owner of Crashworth then shifts the focus of the panel to the consumer, as he asks: “Is the consumer going to win?” This is a question clearly targeted at James Dalton, the panellist representing the insurance industry. Dalton’s response was to say: “As an industry as a whole we have taken a long hard look in the mirror, and the reflection is not pretty. I accept that consumers don’t trust us; we were caught with our hands in the cookie

“I accept that consumers don’t trust us; we were caught with our hands in the cookie jar with regards to the referral fee ban.” James Dalton, ABI MC // July 2013

“We will inevitably see people trying to make money in different areas and we need to stand together against it, put our foot down and say no!” Donna Scully, Carpenters jar with regards to the referral fee ban. It is, however, the responsibility of the whole industry – not just the insurers – to clean its act up, and if we reach this point then yes, the consumer will win.” Ashworth then asked Mark Savill if any of the legal changes were a surprise. “Yes,” he coolly responds, “a lot of them were expected, which is why we moulded our business accordingly,” referring to Lyons Davidson’s decision to convert to an ABS in 2012. He did add that ‘the biggest issue [had] been timing’ as a lot of the SRA’s decisions were left until very late on and that even now they are still waiting for some final rules on costs to come through. The discussion then turned to whether there is an onus on those at the ABI to make sure it’s members aren’t selling their customers data; James Dalton responded first, stating: “We are challenging our members and their practices. It is uncomfortable when we refer ourselves to the competition commission, we need to regulate and ensure everyone is playing by the same rules. I am working on making the code of practice more efficient but people must remember that insurers are just one part of the claims industry. Chris Ashworth suggests that some insurers fail to recognise that claims are the most important part of their businesses,

Features

Panellists, Mark Savill, James Dalton and Donna Scully

on which Dalton notes: “I think that is a fair point, it is only really highlighted when a claim goes badly. Brand is vital in this market and it will ultimately dictate whether or not a consumer comes back to you.”

A necessary adjustment.

Savill’s response to the question, ‘how will the changes [to the legal market] affect the industry outside legal?’ – such as brokers - revolved around the high reliance many brokers have on claims cases during their remuneration process. Dalton interjects, saying: “You should ask BIBA, they have some business models dependant on money sloshing and like CMCs, lawyers and insurers they too must adapt to the new legal landscape”. Chris Ashworth then questioned the panel on whether they thought there would be an increase in bolt on services in order to recoup some of the money lost because of the new costs system. Scully was quick to make her thoughts known on this point: “That would be horrific – I would say to insurers – don’t pay it! They are trying to milk the system, we will inevitably see people trying to make money in different areas and we need to stand together against it, put our foot down and say, no!,” she said. Ashworth, in an attempt to reunite the panel, clearly split over the issue of costs, said: “We are all agreed that

there are people making genuine claims out there, and that the industry has tarred everyone with the same brush.” In an attempt to steer the debate back on course, he then asked the panel if a level of transparency was required. Dalton believes there’s enough already, saying: “We have tried to be transparent about pricing and our spending recently, to show consumers where the money goes. We must place the consumers at the heart but it is a dysfunctional situation as the person paying the costs (the insurer) currently has no control of what they are paying!” The panel then looked at whether it was right for insurers to offer a policy that doesn’t include what the consumer thinks it does, a point which attracted an interesting comment from the Managing Partner of Lyons Davidson on BTE policies. “I do think we will see more BTE policies coming in. If we see the small claims track coming forward then BTE will become fundamental.”

ABS: ABSolutely fabulous, or not? The panel Chair then brought everyone’s new favourite subject ABSs - into the fore of the discussion, asking whether there is a benefit to becoming an ABS. Mark Savill was quick to respond to this with a resounding “Yes, it improves the service offering for policy holders

“[ABSs] improves the service offering for policy holders and enables firms to work together in Joint Ventures to deliver what the consumer wants.” Mark Savill, Lyons Davidson

and enables firms to work together in Joint Ventures to deliver what the consumer wants. It is all about a better level of customer service.” Ashworth interposed to ask the question on everybody’s lips to the representative from the ABI – “Will the ABI be becoming involved in any ABS type structures?” to which Dalton replied, “I think people should ask themselves whether trying to preserve referral fees is right. People enter ABSs to put cost control in place, offer good customer service and improve the reputation of the Industry. Every ABS must be authorised and regulated by the SRA – ABSs and referral fees don’t belong in the same sentence and people need to get over this.” The debate was certainly left at a point of contention as Donna Scully responded to Dalton’s comments with “I don’t think this is true – you can actually get round the ban by becoming an ABS – if they tick all the boxes there is nothing the SRA can do.” This comment clearly stirred Savill, who merely said: ‘I would object entirely to that.’ But the final word came from Dalton, who, clarifying a previous point, said: “Referral fees were wrong – get over it. People shouldn’t be trying to get round them at all; we should be acting in the consumer’s best interest.” The broader effects that the changes within the legal sector will have on the claims industry remain to be seen but what it is certainly true to say it may not be a smooth ride for those involved. The advantage at the moment is sitting with the Insurer, but it remains to be seen who the ultimate winner will be.

MC // July 2013

Features

5 minutes with... Craig Budsworth, Chair of the Motor Accident Solicitors Society (MASS) Q: Has the industry changed drastically since you started working in it? A: Drastically is a very severe word and often over used but not in this context. I often tell people that the reason I love this job is because it changes so much, whether that be the introduction of the CPR, the Clementi report on the future of law firms, the Jackson reforms or just plain old case law. All this means you have no choice but to change and develop which means you are never bored in this industry. Q: What has been the key positive impact of change in your market? Or negative? A: The key positive change has been the introduction of LDPs and ABSs. Remember, Sir David Clementi’s aim was to bring about change in ownership of law firms and, on a personal note, had this never been

implemented I would not be in the position I am now. However, there have been a lot of negatives on the way and the impact on accident victims because of the Jackson reforms is still being understood and my biggest worry is that any further change without a full impact assessment - will significantly affect access to justice even more than it has been already. Q: Did you plan to be in the profession? A: Not at all, I left school wanting to be a banker (careful!) and achieved this with three and a half years at NatWest. But even though I was studying my banking exams part time, the opportunity to advance was limited and so when I saw an advert for Direct Line I jumped at the chance. Q: Who inspires you and why? A: If you dismiss the fact that I’m a ‘Red’, no matter who you support you have to acknowledge the managerial skills of Sir Alex Ferguson. What he has done with football team will never be achieved again. His skills of managing people to get the best result is nothing

less than inspiring and if I can make my team perform to even a tenth of what he has then I know I will be achieving. Q: Have you had / got a mentor. If so, what was the most valuable advice they gave to you? A: My work mentor has been Tom Wainwright and his ethical approach is ingrained in me. However, the best single piece of advice was from Lord Neuberger when I joined the CJC, essentially, ‘keep your comments succinct, don’t repeat others words for the sake of it and we will achieve a lot more’, a comment I’ve shared whenever I’ve needed to chair a meeting. Q: If you weren’t in your current position, what would you be doing? A: I’ve always wanted to be a fireman! Craig joined Glaisyers in 1998, where he is now RTA Partner. In 2009 he was one of the first Legal Executives in the country to be made a partner at a law firm. He became Chair of MASS 2012, the year he also joined the Civil Justice Council.

Q: Is improving technological process enough to energise claims departments, make them more efficient and prove value to stakeholder? Is culture a barrier to processing claims more effectively?

Improving technological process is crucial, and to some degree a bit of a ‘no brainer’. But making the leap between ‘an improvement in technological process’ to creating a ‘real value improvement for stakeholders’… that’s a bit more involved. To add value to everybody in the chain (clients, funders, partners), the end result has to be simplification. Can these stakeholders see (or get)

MC // July 2013

what they want, when they want it, as a result of the ‘technological process improvement’. Cultural barriers exist when technical advance on paper does not translate to value in real life. So it’s about accessibility and simplicity. Does the process improvement: • Simplify service delivery? • Streamline the relevant steps required through the claim process? • Maintain clarity in the process? • Provide convenience and a ‘value feel’ for all stakeholders?

Any technological improvement that impacts so many different stakeholders has to be assessed from all angles - client, funder and partner. So yes that cultural barrier is present, and needs to be attacked from multiple angles to break through it - not just one. But if this can be achieved, with the right implementation of the right technology, the benefits are obvious. Darren Gower, Eclipse Legal Systems www.eclipselegal.co.uk

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The ultimate self-service solution has arrived With NEW TouchPoint from Eclipse Legal Systems, you can give your clients, customers and partners true self-service control. TouchPoint enables a device-independent, interactive experience – securely and in real-time. Providing access to a huge range of information, TouchPoint is an ‘always on, always visible’ solution. From contact management and targeted cross-selling, through to visual KPI presentation and dynamic report commissioning, TouchPoint sets you apart from the competition.

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Call 01274 704 100 Visit eclipselegal.co.uk or email info@eclipselegal.co.uk