LEGAL
quicker and cheaper for both may have an impact on their and philosophies may need to While this system is
insurers and claimants, but cash flow and investment be adjusted. Currently, the probably bad news for
there will be substantial strategies which their financial approach in some claims claimants solicitors and their
impacts on insurer’s processes directors may need to take departments is to raise issues of costs, it arguably also puts
as well as the processes of account of. liability and contributory defendant solicitors, acting for
those, such as brokers, who are It’s also likely that there negligence in order to chisel insurers, in a difficult situation.
assisting insurers to handle will need to be a very down claims. Delay can also be It is not envisaged that there
claims made by third parties substantial change in the used as a tactic to grind down will be many cases going to a
against their insureds. processes, resourcing and the claimant. hearing and the potential for
mindset of claims departments. However, in the new involvement by insurers’
T
he first and most obvious Firstly, IT systems will need to system it may well be solicitors is limited. That said,
implication is the very be introduced and maintained
financially disadvantageous to there are new stages in the
much tighter deadlines. At to handle large volumes of do anything other than admit process, before the issue of
the moment, insurers have three incoming claim notification
liability and deal with the court proceedings, when the
months to respond to a claim, forms and respond to them
claimant as speedily as possible, input of a lawyer may add
but this will compressed down electronically. Then claims even if that may mean skirting value and it is possible that we
to 15 working days. That must departments will need to work
over the kind of standard will see defendant law firms
mean that insurers and insureds to much tighter deadlines. enquiries that claims handlers offering pre-litigation fixed
will have to take a fairly quick
may currently be used to price claims handling or advice
and broad brush approach to
automatically undertaking. services to their insurance
liability. The time available to company clients.
For example, there is not H
aving a four-week
backlog of post will be
disastrous in the sense
consult with the insured and
going to be sufficient time to that it will lead to backlogged the insured’s involvement in
obtain copies of police accident claims being exited from the proceedings may become much
reports or detailed statements. system and unnecessary costs more limited and that could I
t looks like we are going to
enter into a new and
challenging period for all
Insurers will no doubt run being incurred. On the other have an impact on brokers involved in the insurance
claims through anti-fraud hand, in order to meet the
whose insureds have strong industry who deal with any
systems but they may end up tighter deadlines insurers may feelings about claims made volume of road traffic accident
taking a view that it is cheaper have to deploy more resources against them. claims. Even those who do not
to admit liability on the vast in their claims departments Insureds may need to be will know that Lord Justice
majority of claims, even where which could offset some of the educated to appreciate that Jackson in his review of civil
there maybe some doubt, than savings that might otherwise
they are involved in a claims legal costs seems to look
to contest liability and have the come from this new system. process that places a premium favourably on fixed costs
case exited into a more Brokers will need to be on time and costs saving rather regimes for non-road traffic
expensive system. aware that their insurers will be than detailed investigation and accident claims and therefore
This may enhance the working to these tighter examination of all aspects of he is likely to be keeping a close
opportunities for fraudsters to deadlines and will need requests the claim. On the other side of eye on how the new scheme
perpetrate frauds but much will for information responding to in the coin the claimants will no operates, with a view to it being
come down to the ability of a very quick manner. doubt need to undergo the same extended into virtually all areas
insurers and those working with Claims handlers’ mindsets education. of personal injury claims.
them to detect fraud warning
signs quickly.
Another implication will be
on insurer’s cash flow. Although
the total amount of costs
payable under the system will
be less than the current costs
levels, they will be payable
much more quickly and in
earlier stages. Additionally
insurers are going to be
required to make interim
payments much sooner than
they may otherwise do. This
Insurance Brokers’ Monthly 25
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