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Issue 19 May 2016 ISSN 2051-6495

Linking the industry together

Rob Smale

“Technically earlier warning of risk events will help to mitigate claims with obvious outcomes on the bottom line and potentially, as devices mature, they will eliminate risk events altogether�

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Editorial BOARD Adrian Coupland Managing Director - Data and Distribution SSP

Leigh Jones Key Accounts Manager Laird Assessors

Adrian Hurst Head of Strategic Projects Zurich Financial Services

Lesley Graves Managing Director Citadel Law

Andy Whatmough Managing Director S&G Response

Mark Hewitt Managing Director Rebmark Legal Solutions

David Simon Chairman Triton Global

Mark Ledger Principal Prosthetist Blatchford Clinic

David Williams Managing Director Underwriting AXA Insurance

Miles Keeble Non-executive Director Veracity Claims Ltd

Donna Scully Partner Carpenters

Nicola Klimkowsk Head of Business Control and Development LAMP Services Limited

Hannah Newman Solicitor Triton Global

Scott Whyte Managing Director Watermans

Hilary Meredith CEO Hilary Meredith Solicitors Ltd

Steve Turner Managing Director EDAM Group

Ian McGaw Partner and Director Three Graces Legal

Steve Walker CEO Foojit

Jon Gouldsmith Director Box Legal

Tara Shelton Founder & Chief Executive Officer i-COG Claims Management

Keith Tracy Managing Director Aon Risk Solutions

Zoe Holland Managing Director ZebraTD

WELCOME elcome to the latest issue of Modern Claims Magazine. In this edition, I speak to our cover star, Ageas’ Claims and Operations Director, Rob Smale, about the launch of their Property Owners Scheme with Property Insurance Initiatives (Pii) Underwriting Agency, and whether telematics could alter their property claims function in the future. The full interview with Rob can be found on page 12. I also spoke to spoke to Martin Coyne, the Managing Director of Ralli Ltd and Chair of Access to Justice (A2J), about the potential implications of increasing the small claims limit for the personal injury sector (page 17-18).


The second annual Doctors Chambers Modern Claims Awards took place on 28th April at New Dock Hall, Leeds and we take a look at the winners and summarise what was a fantastic evening from page 44. This issues’ Focus Feature comes from Zoe Holland at ZebraTD and discusses the critical need for good due diligence, in light of the number of high-profile mergers that have gone sour in recent months, read Zoe’s article on page 49. Other highlights this issue include Stephen Ward, who considers how to assess meaningful big data in his article on page 57, and our ‘10 minutes with’ the current Chair of the Motor Accident Solicitors Society (MASS) and longstanding Modern Claims contributor, Susan Brown on page 62. As always, we have lots in the pipeline here at Modern Claims Towers, not least the Doctors Chambers Modern Claims Conference, which takes place on Wednesday 15th June at Old Trafford, Man Utd F.C. Tickets are on sale now and are free this year to practicing solicitors, those working within a law firm, and certified insurers, brokers and barristers. Please visit for booking details. For sponsorship enquiries, please contact Martin Smith via or 01765 600909. I hope you enjoy this issue of Modern Claims and if you have any comments, feedback or ideas for a future edition, I’d love to hear from you. Please get in touch with me via the details below. Happy reading!

Charlotte Parkinson, Group Editor, Modern Claims Magazine. Issue 19 May 2016 ISSN 2051-6495 Group Editor Charlotte Parkinson

Production/Editorial Assistant Brendan Gurrie

Project Manager Rachael Pearson

Events Sales Martin Smith

@modernchar 01765 600909

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

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

May 2016

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EdiTorial Board


07 Kieran Magee talks news

Endless repetition of an argument does not make it right, as Kieran Magee explains.


12 Rob Smale

Charlotte Parkinson, Modern Claims, spoke to the Claims and Operations Director at Ageas, about the launch of the Property Owners Scheme with Property Insurance Initiatives (Pii) Underwriting Agency, and how telematics could alter the property claims process moving forwards.

17 Martin Coyne

Charlotte Parkinson, Modern Claims, spoke to the Managing Director of Ralli Ltd and Chair of Access to Justice (A2J) (the lobbying group formed in response to the Chancellor, George Osborne’s proposals), about the potential ramifications of increasing the small claims limit and scrapping general damages for soft tissue injuries, and what could happen to the personal injury sector if the reforms are implemented.

22 If you can’t do it, find someone who can! David Williams, AXA Insurance

22 Consolidated experts

23 Fair outcomes for all

Miles Keeble, Veracity Claims Ltd

23 Understanding the act

Adrian Hurst, Zurich Financial Services

25 Risk identification for new and emerging risks Keith Tracy, Aon Risk Solutions

25 The importance of retention Steve Turner, EDAM Group

27 Innovating for the connected generation

Editorial Board contributors

Leigh Jones, Laird Assessors

Adrian Coupland, SSP

27 Demand outstrips supply for law graduates seeking traineeships Scott Whyte, Watermans

[veracity] claims solutions consultancy

29 Time to stop

Hilary Meredith, Hilary Meredith Solicitors Ltd

29 Do law firms have a realistic view of what they can achieve through a sale of Work in Progress (WIP)?

Zoe Holland, ZebraTD

the single platform for all legal

04 Modern Claims

May 2016

MODERN CLAIMS Issue 19 May 2016 ISSN 2051-6495

EdiTorial Board



30 Building pressure

Mark Hewitt, Rebmark Legal Solutions


41 Restricted Access

30 Regulation and preparation

Nicola Klimkowski, LAMP Services Ltd

31 Catch up and stay up

Ian McGaw, Three Graces Legal

31 Watch this space

Jon Gouldsmith, Box Legal

33 Preparing for more responsibility

David Simon, Triton Global

33 Preparing for the furture Tara Shelton, i-Cog Claims Management

35 How savvy are you? Steve Walker, Foojit

35 A positive step

Andy Whatmough, S&G Response

36 Exceeding goals

Mark Ledger, Blatchford Clinic

37 Understanding your WIP

Lesley Graves, Citadel Law

37 Making the situation worse? Donna Scully, Carpenters

Fair and accessible justice for all citizens is an important measure of a modern democracy and was once an export that the UK had reason to be proud of. But as access to justice is diminishing, especially for some of the most disadvantaged in society, ARAG’s Paul Hurley asks whether the UK is in danger of tumbling down the justice league table.


55 Motoring technology: bridging the gap

The Doctors Chambers Modern Claims Awards returned to New Dock Hall, Leeds, for its second year on 28th April. Brendan Gurrie, Modern Claims reports on the winners and the highlights of the evening.

49 Focus Feature - M&A Due Diligence: Lessons for Slater & Gordon

Recent publicity surrounding a number of high-profile acquisitions that have gone sour in the legal sector, has highlighted the critical need for good due diligence to occur as a critical part of M&A transactions. Zoe Holland reports.

51 Driving the change agenda

Jim Pittman considers how loss adjusters should approach the process revolution currently taking place in the claims industry, in order to remain relevant to insurer clients and customers.

Oliver Smith explains how choosing an agile technology platform will cement a bright future as the claims industry continues to evolve.

James Roberts asks if the insurance hire market is keeping up with vehicle technology.

57 Big Data Blocker

44 Doctors Chambers Modern Claims Awards 2016

53 Digitising your claims business

May 2016


The combination of effective management, delivering a brand promise, enabling positive client experiences, attracting talent and making a sustained profit are the same concerns for barristers’ chambers as for legal practices. However, as Stephen Ward, Clerksroom, writes, delivering these elements effectively requires the assessment of meaningful ‘big data’.

58 Sector Soapbox

Modern Claims’ panel of resident industry associations discuss issues impacting the claims sector at the moment.

61 Case Study: Eclipse Legal Systems

Eclipse Legal Systems, the Law Society Endorsed legal software provider, has announced the integration of Proclaim Case Managementwith PI Law Direct.

61 Case Study: Broker Direct

Autonomous technologies will ‘disrupt’ established business models in the motor industry and insurance will not be immune.

10 MINUTES WITH 62 Susan Brown

Director at ProLegal and Chair of Motor Accident Solicitors Society (MASS).

Modern Claims 05

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Kieran Magee TALKS NEWS Endless repetition of an argument does not make it right, as Kieran Magee explains. e know that repetition can be persuasive when seeking to influence individuals or a debate. Listening to Lord Faulks, the Justice Minister, speaking at the recent APIL conference, my growing sense of foreboding for the future rights and interests of accident victims was accompanied by one of those moments of realisation. The arguments being used to justify the Government’s proposals on banning general damages for whiplash claims and raising the small claims track limit are the same outdated and self-interested arguments that the insurance sector has been peddling remorselessly for years. Conveniently ignoring the fact that the sector is now entirely different to the one of 10 years ago, the arguments are repeated again and again ad nauseam. So they must be true, right?


Thankfully, the claimant sector is not rolling over and taking this unchallenged. The main representative bodies – APIL, MASS and the Law Society – are working together in what has been dubbed the Strategic Alliance to develop, as far as possible, a co-ordinated response to the proposals. Working together with a range of others, particularly Access to Justice, they are preparing the vital evidence and arguments needed to (hopefully) blow holes in the insurers’ case over the coming months. The insurance sector may have the advantages of speaking with generally one voice, a deeper war chest and a supportive Government, but claimants have what should be the unassailable principle of justice on their side.

Finding the balance

The Government, insurers and lawyers all agree about the root cause of the problem. Fraud is a scourge that has blighted the sector for too long and must be tackled with all our energies. Action to target fraud must not, however, affect how an accident victim is treated and their basic right to seek recompense for injuries sustained through no fault of their own. To dismiss the majority of claims, however legitimate, as “unnecessary” should be considered nothing short of a scandal and rejected out of hand. To seek to effectively abolish virtually all claims in order to capture a tiny minority that are potentially fraudulent is grossly disproportionate and runs contrary to any meaningful definition of justice. There is undoubtedly fraud in benefit claims, but noone would argue that an appropriate response would be to scrap all benefit payments in order to catch the minority of benefit fraudsters. This position is as illogical as it is unfair. Abolishing the right to damages caused by someone else’s negligence would be grossly unfair and is equally riddled with irrational thinking. Under the proposals, a pedestrian struck by a motor vehicle would be entitled to claim compensation for soft tissue injuries, but a driver of a vehicle struck from behind by somebody recklessly exceeding the speed limit would not. Outside but hit by the car, you can claim, sitting inside and hit by another car you could not.

The arguments being used to justify the Government’s proposals on banning general damages for whiplash claims and raising the small claims track limit are the same outdated and self-interested arguments that the insurance sector has been peddling remorselessly for years

The insurers case, adopted by the Government, is based upon a few basic arguments: the number of claims is too high, there are few accidents and so there should be fewer claims, they are costing insurers too much who then have to pass these costs back to consumers and there is too much fraud in the system. End of argument; case closed.

May 2016

Modern Claims 07


Tackling endemic fraud requires a fundamental shift in its perception and how we deal with it as a crime Falling figures

Well no actually. Motor PI and whiplash claims have fallen by 70,000 claims a year since their peak in 2011-12, having progressively fallen for four years in a row. The number of claims per year was falling even before LASPO was implemented in April 2013. The number of road traffic accidents reported to the police has indeed fallen in recent years, but there are still hundreds of thousands of unreported accidents resulting in lesser injuries. The Department for Transport (DfT) estimates that there were in the region of 650,000 “slightly injured” in 2014. The DfT statisticians even attach a 95% confidence level to their estimates. This corresponds closely with the total whiplash claims in 2014-15. We all welcome that there are fewer deaths on British roads, but there remains a large number of accidents at lower speeds on busier roads in more crowded cars. The costs attributed to whiplash vary greatly and are largely unsubstantiated. According to the ABI’s own unpublished figures, claims costs have actually fallen 29% since 2010 with the amount paid out annually by motor insurers falling from £8.3 billion in 2010 to £5.89 billion in 2014 – a decrease and saving to insurers of £2.41 billion. Damages have not increased proportionally as fast as the proposed new small claims limit; damages awarded today may be the same or less than awards made in the early 1990s. In 2012, the ABI put the level of fraud at 7%. In 2015, one insurer put the figure at 11%. Solicitors – both claimant and defendants – have put the level of suspected or alleged fraudulent claims in the range of 1-3%. Whatever the true level, there is clearly unanimous agreement that the vast majority of claims are legitimate. Insurer fraud figures combine both proven and what it calls “suspected” fraud, based on a number of highly questionable criteria. When the figures are separated, the incidence of proven fraud drops to 0.2% of all motor claims of which only some will be for whiplash or other soft-tissue injuries.

Protecting profits

The Government is living on false hope if it believes that reduced costs for insurers equating to £40-50 per average motor insurance policy will be passed back to consumers. Whilst legal costs have been progressively falling for over ten years, motor insurance premiums have risen and fallen and risen again, reflecting the cyclical nature of insurance and a highly competitive market. Having failed to permanently pass previous cost savings to consumers, premiums are now nearly back to pre-LASPO levels. Blaming a fictitious “compensation culture” or the laughable concept of rising legal costs for once-more rising premiums should be dismissed out of hand. There will always be a new excuse for maintaining or raising motor insurance premiums to protect insurers profits. HM Treasury has acknowledged that that there is no mechanism by which the Government can force insurers to pass on the supposed savings from reduced motor insurance premiums to consumers. Public “commitments” from a handful of insurers to pass any savings to consumers should be treated with scepticism at best and derision at worst. It is a myth, pure and simple, that the insurance industry never makes any profit from selling motor insurance policies. According to the ABI’s own figure, from 2010 to 2014, insurers have made an aggregate saving on claims costs of £6.68 billion, motorists have paid £353 million more in premiums and annual claims costs have decreased by 29%.

08 Modern Claims

Kieran Magee Kieran consistently delivers the company ideal of acting quickly in order to have as little impact on a client’s daily life as possible. TRUE clients are mainly professionals, some with families, so must be assured that they’re in the hands of a trustworthy ambassador to lead their case through to conclusion. Kieran is also the winner of the Outstanding Achievement award at this year’s Doctors Chambers Modern Claims Awards.

Admiral Group make £134.24 (28%) profit from the sale of every motor policy, which is up 45% on the amount of profit they were making pre-LASPO. If Admiral, instead of profiting from the LASPO reforms, had kept its 2015 profits at pre-LASPO levels, its policyholders would have paid £40-50 less per policy. In 2015, Direct Line made £91.18 (24%) profit from the sale of every motor insurance policy, which is considerably more than the £64.64 (16%) profit per policy they were making pre-LASPO in 2012. Instead of passing on the LASPO savings to their motor policyholders, they kept the money and increased their profits.

The right way

Fraud is a complicated problem and there is no simple solution. According to the National Fraud & Cyber Crime Reporting Centre, there are 152 recognised forms of fraud. Tackling endemic fraud requires a fundamental shift in its perception and how we deal with it as a crime. It requires industry collaboration and a range of practical measures that will progressively dissuade and combat fraudulent or potentially fraudulent claims. But raising the small claims limit and scrapping the right to general damages for whiplash are not the solution. They will result in a variety of highly damaging consequences that will wrongly prevent or impede the ability of accident victims to seek the justice that they deserve. I know that the claimant sector will collectively resist these proposals with every ounce of its reserves of strength. Fair and proper justice for accident victims is one argument I am happy to see repeated forever more. Kieran Magee is a Partner at TRUE Solicitors LLP and an Executive Committee Member of the Motor Accident Solicitors Society (MASS).

May 2016

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Rob Smale Charlotte Parkinson, Modern Claims, spoke to the Claims and Operations Director at Ageas, about the launch of the Property Owners Scheme with Property Insurance Initiatives (Pii) Underwriting Agency, and how telematics could alter the property claims process moving forwards.


How has Ageas supported their customers through the recent flooding?

During the recent flooding, following Storm Desmond, Eva and Frank, Ageas worked very closely with its well known Solution Network, mobilising resource to affected areas and securing additional premises in affected areas. Information was shared on access and electricity availability, for example, in order to prioritise properties that could be visited and those that were not accessible. A sole BRN has recruited two local residents to liaise with local flood affected customers, supporting them through the process and dealing with any day to day issues. Sharing information and exchanging claims for customer benefit has been key in managing customers’ needs in an efficient and timely way. Prioritising these needs for the comfort of our customers from day one was fundamental and our response included sourcing alternative accommodation, making sure their relatives were informed, and adjusters sharing claim detail with DR and BRN for early indications on numbers and affected areas.    How do surge events – such as the recent floods – effect supply chain management?


No supplier (or insurer) carries sufficient capacity to be ready to deal with any surge event. As a result, it is key that they have a robust surge plan in place that can be flexed depending on the circumstances. Suppliers will flex their resource and move non-essential task team members to front end support (customer call management). Where able, some will drop support from their wider group in to assist (like Polygon and Belfor who have European DR companies that can provide technicians and ground support employees). There is also the challenge of getting sufficient field people into surge affected areas, the need to provide accommodation, and to ensure that their welfare is considered at all times (such as sufficient rest time). No two surge events are the same and can drive different behaviours in customers. For example, the Cumbria flooding event last winter was of a greater severity than the previous time. We have also seen a greater number of customers, both domestic and commercial, take a more hands on approach with their claim following previous flooding and being better prepared.    What are the specific challenges associated with surge and catastrophic events?


From an operational perspective, the challenge is the increase in customer demand which is difficult to source short-term. This becomes even more difficult during a sustained event or where multiple events occur. The overall issues include access issues for the supply chain and demand on resource as well as availability of alternative accommodation. The presence of media,

12 Modern Claims

politicians and the Environment Agency representatives, together with the varying expectations and messages to consumers and the market, can also have impacts on behaviours and expectations. Finally, there is still the need to maintain high standards of the day to day operations and service for those customers not affected by this particular event. Are risks in relation to property claims more difficult to manage than other types of claim, such as motor?


Property claims can be more complex as a wider group of providers may be needed but that still depends on the type of claim. Within motor, you will have a garage to repair the car and maybe a solicitor for any third party action. Property claims can see adjusters to help manage the customer, DR companies, BRNs, contents replacement, and flooring specialists, for example. All of these parties need co-ordinating in the more complex household claims. There will also be other issues that those suppliers have to deal with. In floods, we will come across properties with inherent problems such as damp that will prove to be an additional challenge.


What proportion of GI claims dealt with by Ageas fall under the property umbrella? Around 29%, based on 2015 data. What are the core challenges associated with handling property claims?

The core challenge associated with handling property claims is multiple types of property and construction in the UK, which vary from flats and apartments to standard semis, thatched or listed buildings. Each property type has its own different construction and repair methods. Then there is also customer complexity. No two customers are the same and no set of circumstances or needs are ever the same.

In floods, we will come across properties with inherent problems such as damp that will prove to be an additional challenge

May 2016


The top five perils our customers claim for are Accidental Damage (around a third of claims), Escape of Water (just under 20%), Storm, Accidental Loss (about one in 10 claims) and Theft

May 2016

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Technically earlier warning of risk events will help to mitigate claims with obvious outcomes on the bottom line and potentially, as devices mature, they will eliminate risk events altogether Ageas homes in on a new scheme with Property Insurance Initiatives Underwriting Agency Ageas has launched a significant new Property Owners Scheme with Property Insurance Initiatives (Pii) Underwriting Agency, which is available to buy-to-let property owners, head lessees and mortgagees who require insurance for residential and commercial tenanted premises in the UK. The new deal demonstrates Ageas’s skills in developing traditional and niche schemes, while Pii Underwriting Agency is an experienced specialist broker in the property market. The new scheme has been created to help maximise the opportunities a burgeoning lettings market presents, boosted by reports that many pensioners are planning to invest their pension pot in buy-to-let property. Pii Underwriting Agency will have delegated underwriting authority for the Property Owners Scheme, which provides buildings and contents insurance while the property is being let to tenants, with bespoke cover from Ageas. Cathy Taylor, Head of Commercial Underwriting and Operations at Ageas said: “The buy-to-let market is on the up and Pii Underwriting Agency spotted an opportunity to capitalise on this sector with a new scheme aimed at landlords. This is exactly how we like to work with brokers on schemes business – they have the market expertise, we have the underwriting skills and by working together we can swiftly maximise market opportunities. It’s very much a partnership approach and we look forward to working with Pii Underwriting Agency to make the scheme a success.” Lisa Feaver, Underwriting Director at Pii Underwriting Agency added: “We were very impressed with the way Ageas listened and delivered what we required. They went the extra mile with the speed with which they delivered this new scheme, enabling us to go to market at a key time in the property calendar. The team at Ageas has taken a completely ‘handson’ approach to the development and on-going success of the scheme and this has given us valuable peace of mind, allowing us to focus on marketing and delivering the product.”

No two surge events are the same and can drive different behaviours in customers

14 Modern Claims


What are the most common types of property claim, both from a commercial and personal standpoint?

Based on 2015 claims data, the top five perils our customers claim for are Accidental Damage (around a third of claims), Escape of Water (just under 20%), Storm, Accidental Loss (about one in 10 claims) and Theft.


Can you tell me more about the new Property Owners Scheme with Property Insurance Initiatives (Pii) Underwriting Agency?


Pii Underwriting Agency was established in 2014. It offers insurance solutions to brokers who are looking to arrange insurance for both the commercial and residential markets. We saw there was a mutual opportunity for us to work together and complement Pii’s other insurer binders. Ageas was able to establish Pii and had a knowledgeable underwriting team who could work with our Commercial Scheme Underwriters and we are proud that Pii felt Ageas could be part of a panel of multiple and credible insurers (including London Markets) that Pii have researched.


How do you think telematics – predominantly utilised for motor insurance - will impact property insurance, for insurers and customers? Technically earlier warning of risk events will help to mitigate claims with obvious outcomes on the bottom line and potentially, as devices mature, they will eliminate risk events altogether. Human intervention still needs to happen so the sensors need to provide alerts to the right people. Devices will employ an automatic shut off (e.g. for EOW) to stop the source of the event. In essence, if the right sensing devices are employed in a property, then technically, an appropriate alert system can trigger an earlier response than we have today. In this context we are talking about sensors which can detect things like:


• Escape of water • Fire • Smoke • CO • Movement within the property • Opening/closing of perimeter security (door, windows, skylights). Some of these things which trigger an immediate response do exist today (e.g. central station alarm systems and fire detection in commercial property). Others, such as smoke and CO detectors, are more passive and, if someone is in close proximity, immediate action can be taken. New devices are continuing to enter the market, for example escape of water detectors, electricity, water and gas usage monitors, but in order for these to be useful, they need to work together. If we know, for example, that nobody is at home (no movement and all doors/windows are locked) and water flow increases, then there is potentially a problem starting to happen. If that continues and a water sensor is triggered that means that a puddle is forming. By analysing the data from all sensors, algorithms will determine where alerts need to go or whether to shut off sources (water main). At the moment, there are no ‘perfect’ systems and alerts still need some human intervention. However, earlier alerts should result in earlier intervention and reduced severity in the future. There are some

May 2016


Telematics for the home – connected homes – will reduce the impact and frequency of claims and some events will be eliminated altogether early stage water shut off devices being developed which will help to cut out some escape of water claims. But looking further into the future, telematics for the home – connected homes – will reduce the impact and frequency of claims and some events will be eliminated altogether. For insurers, claims will contract and so will premiums. And for the customers, their claims experience should improve as damage will be less severe and repairs should be quicker. However, even if a claim is avoided, repair work will still be required to deal with the source of the event. Whilst this looks like a threat to insurers, we see that prevention will become mainstream and insurance will be more of a contingency. In the new world of smart and connected homes, there is an opportunity for insurers to play a key role in deploying its repair network to fix the problem even if there is no ‘traditional’ claim event. Therefore, insurers will morph into risk prevention first and claims repair second. Leigh Carlton, Head of Proposition Development at Ageas has written a blog for Insurance Age which may be useful to explore this topic further: insurance-age/blog-post/2450248/putting-the-customer-at-thecore-of-connected-homes.


How does regulation directly impact how Ageas deals with its customers? How does the organisation respond to regulatory requirements which may not be in the best interests of customers in practice?


On the whole, we do not see this as a challenge because we put the customer at the heart of our claims processes and so should the regulator. Things such as publishing General Insurance value measures may be debatable but we support initiatives which increase transparency for consumers and help them to make the appropriate choice for their insurance needs. We look forward to working with the FCA on its pilot to help make sure that any claims data published is clear, consistent, and beneficial to consumers. Given the type of data the FCA is proposing to publish, it needs to be understood that the product design will have a key influence. A claim can’t be paid if the product doesn’t make it economic, for example, a high policy excess on a small value claim. It should therefore be recognised that this comparison will not only highlight claims handling behaviours of companies, but also the content of their products and the purchase choices their customers make.


What is next for Ageas?

Our focus centres on becoming even closer to our customers, and driving new standards in this fundamental area. To support this, we will be continuing to invest in our claims capabilities to ensure Ageas remains ahead of the competition.

May 2016

Rob Smale Rob joined Ageas Insurance in 2003 having previously worked in a variety of industries and roles. Rob’s qualifications include both a degree in engineering and an MBA and it is his engineering background that has helped inform a set of operating principles known as the Ageas Claims Way. Embracing ‘Lean Service’ techniques these principles have won plaudits from customers, suppliers and peers in the industry.

Prevention will become mainstream and insurance will be more of a contingency

Modern Claims 15


Martin Coyne Charlotte Parkinson, Modern Claims, spoke to the Managing Director of Ralli Ltd and Chair of Access to Justice (A2J) (the lobbying group formed in response to the Chancellor, George Osborne’s proposals), about the potential ramifications of increasing the small claims limit and scrapping general damages for soft tissue injuries, and what could happen to the personal injury sector if the reforms are implemented.


What could the proposed increase to the small claims limit – from £1,000 to £5,000, as proposed by the government mean for claimants and claimant solicitors?


In one word, catastrophe. It would forever erase the legal rights to recover the costs for recovering injury losses for 60 million voters in England and Wales, whose injuries are caused by another’s negligence. These established legal rights can be traced back to King Ethelbert in the 7th century. For the injured, if their injuries are valued at less than £5,000, then they have unpalatable choices: • To engage a solicitor or a Claims Management Company to help them pursue the claim by navigating the Small Claims Track of the crumbling courts system. The cost of this is estimated to exceed 50% of the client’s compensation, as the client’s would no longer recover their legal costs from insurers, as they do now. The client may also be obliged to fund the disbursement’s in advance. This option may be very unattractive, and the client may choose not to proceed. So the winners again here are the insurers and the losers are the public. • Bring a claim themselves and risk dealing with insurers directly, which is a David v Goliath situation, where David (the client) is unarmed. It is an inequality of arms and no doubt this will involve insurers using pre-med offers to tempt the injured to accept a lower settlement, than they are entitled to receive under the law. Losers: the general public, winners, again the insurers. • Bring a claim themselves, a process they are unfamiliar with, and try to use the Small Claims Track of the courts system. They will be Litigants in Person and will demand more of the courts time. Additionally, they have to pay eye-watering court fees and disbursements in advance, which in a small claim will exceed £2,000, just to get to trial. Then they then have to conduct a trial unassisted. An understandable nightmare for the judiciary, and with less courts, perhaps miles away from the injured persons home - a singularly unattractive proposition for the client. Few will take this path, resulting in a bonanza of non-pursued legitimate claims by insurers. Bingo in savings for insurers, a big loss for the injured, usually including loss of earnings. • The client decides it is all too much faced with paying a law firm or CMC up front for disbursements, dealing with insurers on the telephone, or alone pursuing a claim through the Small Claims court. The injured person abandons the claim, which is then classified as fraud by the insurer. More wins and savings for the insurer, injury and irrecoverable financial loss for the person not at fault. Personal Injury solicitors will have great difficulty surviving in business if the Autumn Statement proposals are imposed. Almost 90% of most PI firm’s work is fast track, and as the options available for clients are so draconian, they are unlikely to claim. The client’s legal costs are only recovered from insurers when injury damages exceed £5,000. But as most claims pay less then £5,000, the numbers of client’s pursuing legitimate claims will plummet. This will mean a Dutch auction on fees in some cases. It will also mean a dramatic reduction in the numbers of clients who

May 2016

As most claims pay less then £5,000, the numbers of client’s pursuing legitimate claims will plummet

Modern Claims 17


The government has had cosy reported secret meetings with insurance big wigs preceding the Autumn Statement announcement will claim. Since the introduction of LASPO, solicitor’s fees in some cases have dropped by up to 60%. These proposals will put firms (which advise on mainly motor accident claims) out of business immediately. Those firms that manage a mixed bag of business may lose a further 40% of turnover, which inevitably means they will go in to run-off and close down. This will seriously affect the Chancellor’s Northern Powerhouse of Liverpool, Manchester, Leeds and Sheffield very badly.


What are the key areas of uncertainty that have arisen out of the Autumn Statement announcement made by the Chancellor, George Osborne?


Presently, as the Consultation Process following the 2015 Autumn Statement, has not yet commenced, there is uncertainty whether the government will realise that the insurers are hoodwinking them, and uncertainty as to whether they will steer a fairer middle course to achieve, in a different way, some of their objectives. So, to remove the right to compensation for minor soft tissue injuries in road traffic accidents will involve a mission impossible definition in primary legislation. This will occupy far too much parliamentary time, when in fact simpler, less complicated alternatives are possible. Whether the government intends to follow the Prime Minister’s and Lord Chancellor’s proposed policy is uncertain. Currently, many Conservative and opposition MP’s to whom Access to Justice has spoken, believe as one very senior Tory commented, “this has not been thought out properly”. What is certain, is that the virtual closure of the PI sector, including law firms, barristers, medical agencies, doctors, experts, landlords, council tax etc., will cause a significant loss to HM Treasury in taxes, estimated at up to £1,000,000,000 per annum, forever! The winners here are the Insurers. The losers are 60 million citizens per annum, HM Treasury and the PI sector. There is no tangible benefit to the public or the government for these proposals.


The government has stated that the savings brought about by the potential increase will be ‘passed on to consumers’; do you think this is likely to be the case?


Not at all. It will never happen, although there may be the odd insurer that may pay lip service. But, review matters in 5 years time and this will all be forgotten. Andy Slaughter MP in the Commons asked the Chancellor this year whether the government intends to police the insurers, to ensure that any insurance savings are passed on to the public. He said “no”. Therefore, the government intends to leave it to the insurance industry to play the nice guy and reduce premiums. They will never do this, and have not done so since LASPO was introduced, as they refuse to disclose details of the billions they have saved since 1st April 2013. Insurance Premium Tax was increased by 3.5% to 9.5% in November 2015 and insurers promptly increased premiums to 10%, profiteering at the expense of the public. So just this stroke, is a clear indication of the insurance industry’s arrogance, as essentially they think they are untouchable with this government.

There is no tangible benefit to the public or the government for these proposals 18 Modern Claims


Do you think the government listens equally to insurers and solicitors?

I’m not sure. Up to now, the government has had cosy reported secret meetings with insurance big wigs preceding the Autumn Statement announcement. The understanding is that the Statement was modeled on Aviva’s 2014 “Road to Reform” document. However, the political fallout and ramifications of the proposals, far exceed the recent concern surrounding Tata Steel and BHS. Job losses at this stage are predicted to be at least exceeding 45,000, with resultant benefit claims, unemployment and hemorrhaging of tax from HM Treasury’s coffers. Add to this the unemployment causing enormous damage to the Chancellor’s Northern Powerhouse project, and the uncertainty of the EU Referendum. Furthermore, the legislation on tissue injuries will be tricky to draft and get through Parliament. Access to Justice and the other representative organisations, hope to persuade the government to look at other options to combat fraud and eliminate those pesky nuisance calls, which are CMC driven, and drive us all bananas!


Can you tell me more about the re-branded Access to Justice (A2J), why it was established, and the type of work it does?

Access to Justice (A2J) is now a company limited by guarantee, which is highly motivated, organised and structured. As it is not a membership organisation, it is able to receive contributions from non-member bodies. That is the reason why it was established, as The Strategic Alliance (The Law Society, APIL and MASS) can only receive member donations. We have also recently rebranded to A2J, and are generating a significant war chest to fund the campaign, to enable us to persuade the government to think again. A2J has a Strategic Plan, which is published on the website website is the only site dedicated to the Autumn Statement proposals. We are naturally working very closely with the Strategic Alliance and with Thompsons who largely represent the Unions. We have a massive presence on Twitter @ccesstojustice.


Where will personal injury solicitors go from here – do you expect consolidation in the market, or to see solicitors moving into different areas of work?


If the proposals are imposed as suggested, then the impact will be seismic and there will be economic and social ruin. Defence solicitors and claims handlers in the insurance sector will also perish in the fall out. FOIL opposes the proposals. Many people in the sector have the usual family commitments and will suffer loss of income and or unemployment. Loyal staff employed in the PI sector will have money problems and worries, which all fuel misery and family fallouts about money. There are 2,777 firms practicing PI law and over 12,700 solicitors registered to practice PI law. Multiply this figure by 3 or 4 to include paralegals, admin and support staff and you have over 50,000 affected. This does not include people employed in the sector outside of the law firms, which can be added to this number. There will be increased numbers in the job market and many may have to try to retrain, doing what I do not know. The impact will be cataclysmic. The only winners in all of this are the insurers. There is another way, and Access to Justice is determined, with the other representative organisations, to put the best case forward to persuade the government to steer a fairer and sensible course, for the benefit of all injured persons and the economy.

May 2016

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Wednesday 15th June 2016 Manchester United Football Club, Old Trafford “2016 will shape the future of the personal injury market place like never before. The immense pressure upon law firms, both claimant and defendant, to re-evaluate their entire practices is going to cause mayhem. Rather than trade insults over a ravine it is time for the industry to come together to argue their points and create a united voice! Tickets are entirely free to solicitors, insurers, brokers and barristers so that we can get all the major stakeholders in one room.” Joint Conference Chairman, Andrew Twambley, Director, InjuryLawyers4U “Following the Autumn statement 2016 has already produced some excitement, accusations of secret meeting and FOIL breaking ranks with Insurers on the small claims track. This will be an incredibly important year for all involved in the claims process. Nothing is yet decided, it is still possible to influence the final outcome and I would recommend all interested parties to attend the Modern Claims conference where you will hear from all sides of the debate and can contribute yourself to what could be the biggest change in almost 20 years.” Joint Conference Chairman, David Williams, Managing Director, Underwriting, AXA Insurance - Commercial Lines and Personal Intermediary

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If you can’t do it, find someone who can! 2016 has been called the ‘year of the disrupters’, as insuretech start-ups, most recently Wrisk and Zugar Znap, launch to target millennials and other niche markets. Do insurance providers need to diversify their product offerings/approach to market to avoid missing out on these potentially lucrative demographics? isruption has been predicted pretty much every year for as long as I can remember, but this year does seem to be gearing up to be quite an exciting one, and Insuretech and the Start Up Buzz will be somewhere at the centre of it.


With major insurers setting up companies to seed fund start-ups (AXA), or establishing a ‘Garage’ presence in Shoreditch (Aviva), everyone seems to think that insuretech is the place to be, and if you can’t create it yourself then great organisations like Startup Bootcamp will welcome you to their fold. Insurers get access to bright young things and firms, those bright young things get access and exposure to the large composites they think will make them millionaires; it’s clearly a win-win. So why all the interest all of a sudden? A cynic might say that it’s really just that Fintech became so overcrowded people had to move to ‘adjacent’ areas, and clearly there is an element of that, but there are also - I feel - some much more compelling reasons. Our industry must surely be ripe for change, we have done things pretty much the same way for so many decades. OK, we’ve moved to computers from quill pens, but beyond that the principles and products are pretty much unaltered. The opportunity therefore must be there for someone with a different perspective to do something really different, and in doing so transform the insurance universe, and potentially make an awful lot of money in the process. We cite regulation as being the thing that sometimes hampers innovation, but if we stick with that excuse then someone else will be eating our lunch before we know it. When you look at the teaser marketing from these new challengers, they make comments like “Insurance can be complex, how can you trust something you don’t understand?”, partner that with “Real stories from real customers who really broke stuff” rather than a PDF ‘Key facts’, and deliver it all via “A new portal which will provide social content along with insurance and other financial products aimed at…(insert whatever niche you are targeting here)” - and it sounds like a winner to me.

Consolidated Experts Are businesses in the claims industry utilising service providers effectively?


n a time where key subjects surround the impact of change and financial risk, should we be ensuring our existing service requirements are timely, accurate and cost effective?

Whilst the overwhelming response will be yes, are firms constantly reviewing their existing network of service providers to ensure all their requirements are met? Can they provide you with a solution to multiple requirements? If not then should you change the way you interact when instructing? Utilising a single expert or service provider who have a passion to evolve and that are committed to offering a complete solution will not only reduce time (and therefore waste), it will be cost effective, provide a single point of contact, a single set of negotiated terms, and additional visibility on cost due to a single accounting function. So could this now be the time to consolidate a panel of experts, explore their capabilities and allow someone else to absorb your lost time sourcing specific requirements of an Expert? When things are consolidated they’re combined so they become stronger or more solid. The adjective consolidated comes from the Latin roots con- “together,” and solidatus, “make solid.” A stronger, more solid and collaborative working relationship is the ultimate goal. Understanding our clients has allowed Laird to evolve from a traditional company of engineers to a well versed Expert Witness Service provider with the expertise and experience to provide advice, assistance and reports on a plethora of subjects and requirements. Servicing all areas of automotive requirements, locus reporting, injury photography, public liability reporting, translation and interpretation to name a few. Laird have inspected gates, valued porta loos, assisted the BBC, provided graphology and even travelled to Romania, always providing a simple and complete solution. Leigh Jones, Key Accounts Manager, Laird Assessors.

So yes we need a change, to our approach I think, more than our products per se, and if we can’t do it ourselves, make sure you partner with someone who can, before it’s too late! David Williams, Managing Director, Underwriting, AXA Insurance.

22 Modern Claims

May 2016


Fair outcomes for all

Understanding the Act

What could an increase in the small claims limit mean for credit hire companies? aving been battered for 20+ years with varying degrees of investigation and litigation, the potential increase in the small claims limit could actually be some much needed positive news for the industry.   There is certainly an argument that an increase could simplify the recovery process for credit hirers and ease the cash starvation that blights the industry.

What can claims professionals do to ensure they fully understand the requirements of the Insurance Act 2015, which is implemented in August this year?


Credit hire claims are regularly mixed up with PI claims, which prevent hirers from taking any real action and more often than not simply end up having to sit back and wait for the PI claim to settle. This has been compounded over the years with a lack of willingness and expertise from law firms, who, probably quite rightly, are only interested in pursuing their customers claim for personal injury. The potential increase in the small track claims limit could result in a huge amount of sub £5k PI claims falling away, freeing up hirers to be much more proactive/aggressive in their approach. It’s also likely to prevent defendant insurers from hiding behind the PI claim and ignoring the hire element of the claim, safe in the knowledge that the hire company cannot take any action in any event.   It’s not all good news though; credit hire companies over the years have diversified their offering to essentially create the horribly named “Claims Management Companies”. If your business model is to offer hire and personal injury you can wave goodbye to the benefits above and potentially be faced with a significant decrease in volume as well as the thought of having to take a massive chunk of a successful customer’s damages. What does all this mean for the customer and the issues around access to justice? More days in court to support the aggressive approach to credit hire recovery? Perhaps the government may genuinely focus on all parts of the supply chain being able to deliver fair customer outcomes.   Miles Keeble, Non-executive Director, Veracity Claims Ltd.

he Insurance Act 2015 (the ‘Act’) will introduce the most significant changes to UK insurance contract laws in over 100 years. The Act comes into force on 12 August this year and will apply to all insurance policies in the UK which incept, renew or are varied from that date.


In November 2014, for commercial non-life customers we announced our implementation of the main principles of the Act with immediate effect - indeed we had already been working to similar principles in the handling of claims. Since that time, we have been handling claims in accordance with the Act and we have been updating our policies and associated documentation to incorporate new clauses and remove older wording. Our approach mirrors the Act with one main exception; we have ‘opted-out’ of the proportionate reduction of claim remedy. Rather than reducing a claim proportionally, we have instead decided to charge the additional premium that we would have charged if we had known the relevant material facts and pay any claim(s) in full. Although non-disclosures are low in number against the total amount of claims handled, they are inevitably complex and require careful handling. It is therefore critical claims handling staff are fully aware of the Act and adapt in a carefully managed way. The following actions will be required: • All claims staff are trained to ensure the principles of the Act are fully understood and examples discussed, this should be followed by a test of understanding; • Develop good knowledge of the underwriting process, of statement of facts and contract certainty letters produced by underwriters; • Post training claims staff need access to Q&A documents covering some of the more unusual examples that they may come across, there is also a wealth of on-line material, e.g. ‘Zurich’s approach to the Insurance Act 2015 - A guide for our customers and brokers Commercial non-life policies’ as well as some legal firms offering free online tutorials and tests; • Internal procedural manuals, guidance notes should be reviewed and amended in accordance with the Act including checking the documentation produced by underwriters; • A robust claims handling process with clear route to underwriting decision makers where a potential non-disclosure is identified with a review and recording process to ensure consistency of decision-making; • Work closely with 3rd party suppliers e.g. loss adjusters, delegated authority handlers to ensure compliance across your whole company is reached. Adrian Hurst, Head of Strategic Projects, Zurich Financial Services.

May 2016

Modern Claims 23

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Risk identification for new and emerging risks ompany failures often result from an inability or unwillingness to cope with change, including the failure to engage with changing risk dynamics in the business environment. One cause of this can be cultural where risks are not recognised, identified or managed. Among the most crucial change factors are those arising from technology. Eerily, technological change mirrors major risks identified in surveys such as; • Data and information security; • Regulatory changes; • Cyber attacks; • Rapid change brought by new technology; • Customer loyalty.


The inability to identify key risks could emerge from a lack of knowledge, personality traits - some of us are more risk averse or lack of a risk identification process. Conventionally, risk maps and registers are constructed for this purpose but they are often inadequate in scope and not kept up to date. Identifying new and emerging risk is therefore not a simple challenge. One strategy is to be a nimble second mover and remain cognizant of the risk events of similar organisations. Some risks may be worthy of more urgent attention. A pragmatic and proportionate approach is required. How is an organisation able to recognise risks that are new but could pose a threat? Here are 3 ideas: 1. Use scenarios planning, identifying risks by cluster and assessing potential effects and financial consequences. For example, is technology changing the business? Potential risk impacts include competitive threats, regulatory intervention, data security and of course reputation. 2. Keep an eye on high profile and publicly known risks. These are accessible through various studies and surveys that could be chosen by their relevance to the business. Look at their consequences, employing a backward root cause analysis to identify possible areas for change. 3. Create a wide involvement in risk identification. Create and publish your risk appetite, which identifies where there is no tolerance to take risk through to where risk is sought. Studies have shown individuals have different attitudes to risk within an organisation, so public statements of this nature are useful to develop an organisational risk appetite. The benefits of a broad process for risk identification go beyond direct consequences and include saved time and diversion from important priorities, and of course the avoidance of negative client reaction. Keith Tracy, Managing Director, Aon Risk Solutions.

The importance of retention ll companies measure turnover and given that ours is one of the most competitive industries, naturally it is a given. But employee turnover is equally important and often a forgotten stat. Right now, retention of staff has become a more newsworthy topic; the economy is picking up, employees want more career growth and we have seen a shift in competition. Rather than the employer being the body making the decisions and calling the shots, it is the employees themselves. Jobs are more accessible and people feel financially comfortable enough to move roles again. Added to this, tools like LinkedIn and various recruitment sites now make it easier than ever to look for a new job. It is absolutely crucial to look after good people to keep hold of good people.


Effective retention strategies often begin during the recruitment process. We have found that people will be more inclined to stay with us having had a realistic view of their corporate day to day environment; meeting who they will be working with, seeing where they will be sitting and allowing them to interview us equally as much as the other way round. It is a two way thing; we want people to want to work here rather than just accepting the post because they need a job. We would like to offer careers, not jobs. We want our people to form part of the family and most importantly to enjoy coming to work. On top of keeping people happy and nurturing a stable working environment, retention is business critical. Firstly, recruitment costs are high; the cost of replacing an individual and the time they’re not working to speed is extremely costly. Secondly, we invest time and money in mentoring individuals, helping them to be ready to work and understand our unique corporate culture. A new starter is completely raw and our management team and training department will spend a lot of time with them during induction and ongoing development thereafter. We have found that staff engagement is linked to retention and in theory happy people will want to stay. We ask their opinion and listen to their suggestions. Offering a number of key incentives that they have asked for will only help to motivate them - car schemes, pension options, attendance bonuses, various teambuilding days, social events, and annual staff awards. We understand the value of our people. After all it is what we do. We are people made, service driven. We offer services delivered by our employees. Our business partners build relationships with individuals and understandably want stability and consistency. We place great emphasis on staff morale and recognise that it is the things above and beyond what they receive in their pay cheque that keep them here; after all anyone can trump you on a salary. Money naturally is important, but it doesn’t buy employee loyalty. And with employee loyalty comes Business Partner loyalty; everyone is a winner. Steve Turner, Managing Director, EDAM Group.

May 2016

Modern Claims 25

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Innovating for the connected generation 2016 has been called the ‘year of the disrupters’, as insuretech start-ups, most recently Wrisk and Zugar Znap, launch to target millennials and other niche markets. Do insurance providers need to diversify their product offerings/approach to market to avoid missing out on these potentially lucrative demographics? hile insurers consider how to respond to the era of connected technology, a new breed of connected consumer is coming to the fore. For millennials, a steady stream of digital interaction is the norm, leaving the door wide open for new, more agile competitors to rip up the rule book and disrupt the insurance industry.


To avoid getting left behind, insurers need to adapt to this changing marketplace, but how can they achieve this? The first rule is to start with the customer, as it is only by understanding the risks individuals face now and how they want to be engaged with that insurers can diversify their product offerings to mitigate these. The next question this raises is how insurers can deliver solutions people will use. As lifestyles continue to change, so does the face of insurance, with bespoke coverages to suit particular niches and target markets. For millennials, this could be dedicated protection for the gadgets they own, while, for the Airbnb generation, we have recently seen the introduction of on demand host insurance.

Demand outstrips supply for law graduates seeking traineeships he annual Law Society of Scotland report on traineeships may appear to give reasons to be cheerful for the next generation of solicitors - but scratch below the surface and all is it not what it seems.


Figures show a 2% increase in the number of traineeships available for future lawyers, but this does not reflect the disproportion between people completing diplomas and the opportunities available to them. Over the course of January 2016, we ran an advert on the LawScotjobs website seeking applications for trainee solicitors and received 175 applications. These were all from people adequately qualified with LLB and Diploma in Legal Practice, keen to embark on a career in law, many of whom had been seeking a traineeship for a number of years. Undoubtedly, the financial crisis has had an impact on the legal industry as it has across various other industries, and the legal landscape has changed with considerable consolidation and mergers of firms at all levels in Scotland as well as some high profile firms disappearing altogether. However, none of that appears to have been factored in to the expansion of universities offering the LLB and PEAT 1 (formerly the Diploma in Legal Practice) over the same period.

It is simply not enough to repackage a one-size-fits-all product to target these new demographics. To truly stand out, insurers need both niche products and to deliver added value. For example, millennial insurer Zugar Znap provides social content alongside its products, while Vitality enables individuals to benefit from cheaper life insurance in return for visiting the gym.

Whilst we wouldn’t want to see anyone prevented from pursuing their career ambition of becoming a solicitor, the numbers simply do not stack up at the present time meaning that a large number of graduates will gain the qualification they need to enter the profession but find no job at the end of their academic training. This is all the more concerning when the majority of PEAT 1 students have to fund the cost of the course themselves.

Disruptors have the agility to deliver all of this seamlessly, yet traditional insurers are often held back by legacy software. Insurers need a responsive, modern, real-time infrastructure that makes it much faster and easier to add new functionality, modify processes and therefore adapt to meet the challenge of disruptors. At SSP, we have invested heavily in capabilities to enable businesses to change or build products in a matter of one or two days.

There aren’t any easy answers to solving this problem but unless it is tackled, we will continue to see large numbers of people fail to secure their desired role as a trainee solicitor simply because there aren’t enough jobs to go around. Watermans seek to do what they can to offer a route forward to trainees and will be adding 3 trainee positions in 2016 in addition to the 2 trainees they currently employ - but not every firm is able to do this.

Of course, this all needs to filter down to create a claims experience rather than a claims process. Research has already shown that one in four UK drivers would definitely use an app for the claims journey, and there is the same appetite for reporting home and travel claims this way. With 2016 being labelled the ‘year of the disrupters’, now is the time for insurers to ensure they appeal to the customers of tomorrow – before someone else does.

There has to be much more joined up thinking between universities, The Law Society of Scotland and the firms employing trainee solicitors, to ensure that the projected demand for trainee solicitors and supply of eligible candidates are brought much closer in line with one another to prevent the heartache of not finding a job for many, who have worked hard to obtain the qualifications that ought to allow them access to the profession.

Adrian Coupland, Managing Director - Data and Distribution, SSP.

Scott Whyte, Managing Director, Watermans.

May 2016

Modern Claims 27

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Time to stop The Health and Safety Executive (HSE) has announced it will administer a Crown Censure to the Ministry of Defence (MoD) over the deaths of three soldiers on a selection course in the Brecon Beacons in July 2013. What exactly is a Crown Censure and does it go for enough? eservists Edward Maher, James Dunsby and Craig Roberts fell ill while on a selection course. Mr Roberts and Mr Maher died during the exercise, while Mr Dunsby died on 30 July 2013. The HSE investigation found a failure by the MoD to plan, assess, and manage risks associated with climatic illness during the training - in particular a lack of dynamic risk assessments on the day. These failings resulted in the deaths of the three men and heat illness suffered by 10 others. 


A Crown Censure has been issued against the MoD by the HSE. This means that although there is no MoD exemption from the Health and Safety at Work Act 1974 the MoD, as the Crown, is immune from prosecution. A Crown Censure is issued when there would have been sufficient evidence to provide a realistic prospect of prosecution and conviction but for immunity. So what happens next? Basically, not much. Between 1999 and 2005, 14 Crown Censures were issued. That’s over 2 incidents a year where, but for Crown immunity, there would have been a criminal prosecution. I was involved in a case a few years ago involving military driving where a Censure had been issued 2 years before the incident happened. Military diving was so dangerous that the Government asked for an audit of all military diving - the ‘Pelly Report’. It concluded that the military diving apparatus, the SABA suit, was inherently dangerous and should be taken out of commission immediately. The report was not acted upon for 2 years, resulting in 2 more military fatalities using this equipment. My lack of confidence that a Crown Censure will evoke change is grounded on past experience. The blatant and reckless disregard for life at Brecon Beacons goes to the very heart of the MoD. In order for this to change, the MoD should, like any other employer, be subject to the Corporate Manslaughter and Corporate Homicide Act 2007. The Act clarified the criminal liabilities of companies including large organisations where serious failures in the management of health and safety result in a fatality. However, the MoD is still able to hide behind crown immunity - and it is time for this to stop. Until it does, there will be no accountability and no lessons learnt.

Do law firms have a realistic view of what they can achieve through a sale of Work in Progress (WIP)? xposure, experience and understanding of the M&A market are critical ingredients in getting a realistic handle on WIP value. Buyers with cash are available and willing to pay the right price for ‘healthy WIP’ but it is not a project for the faint hearted. WIP values are ultimately driven by the quality of the recoverability of the WIP, the opportunity value in the cases being sold and the indemnity risks that may come with the purchase.


More often than not, law firms looking to sell their WIP do not have a wide enough view of the issues of risk that undermine the WIP asset and in some cases the level of WIP case data is lacking, leaving a critical piece in valuing the asset missing. Understanding these issues pre sale and taking steps to improve risk areas will protect the asset and enable a better value of WIP on sale. Remedial steps, such as taking steps around defective retainers can be the difference between a sale collapsing or going through. There are a number of factors that can adversely affect a firm’s WIP risk profile, including: • Poor or unrealistic recording of WIP; • Unrealistic valuation of WIP; • Previously unidentified issues in relation to retainers and funding; • Poor provenance of acquired cases and acquired WIP; • Poor technical capability with increased indemnity risk; • Poor case screening at the outset; • Lack of ongoing risk assessment and/or optimism bias; • Delays in case progress resulting in increased number of cases with protective issue of proceedings or adverse costs orders; • Undeveloped case management system resulting in an inability to track case staging and progress. More recently, the run of case decisions surrounding assignment of CFAs, transfer from LAA to CFA funding etc. is impacting on the value of WIP in the current market. Specialist technical WIP due diligence is invaluable to the M&A process, whether that be on behalf of the purchaser or vendor. My advice is that a selling firm needs to have a sense of honesty around where the risks are and how this impacts on its WIP value. If these risks are unknown, it is advisable to get visibility around them before an information memorandum is sent to prospective buyers. Zoe Holland, Managing Director, ZebraTD.

Hilary Meredith, CEO, Hilary Meredith Solicitors Ltd. Hilary Meredith Solicitors Ltd acted for David Dunsby, James Dunsby’s father.

May 2016

Modern Claims 29


Building pressure

Regulation and Preparation

How can those in the claims sector maximise their ‘value for money’ per case by utilising technology?

The European General Data Protection Regulation will be implemented in 2018. How should insurers be preparing themselves for this with their approach to cyber crime and data protection?

ressure on legal fees in the claims sector is forcing law firms and insurers to turn to I.T. to assist in eradicating inefficiencies within the claims process. Identifying tasks, which don’t require any ‘legal input’, is an obvious starting point, as too are software solutions that support a paperless way of working and information sharing.


Those working in this sector are already very familiar with legal case management software solutions and the time savings they bring. In fact, how did we ever manage without them? Our business has one aim: to develop software solutions that enable lawyers to focus on what software can’t do – i.e. look after clients; apply the law; and negotiate a settlement. We’ve done that by developing two major pieces of software: • piCalculator – saves time and money by helping lawyers prepare mathematically accurate schedules of special damages. • noiseCalculator - saves time and money by helping lawyers undertake consistent and accurate analysis and calculation of NIHL claims. But it’s not just pressure on legal fees that are bringing about an I.T. revolution in the claims sector. The Judiciary of England and Wales is also embarking on a technological overhaul of the civil courts as part of its Reform Programme and Civil Courts Structure Review. The Interim Report of the Civil Courts Structure Review (published December 2015) led by Lord Justice Briggs is clear about the future, stating there is “no technical reason why civil trials can’t be conducted on a paperless basis once funding and I.T. infrastructure is made available.” Whilst it make take some time for the judiciary to figure out the technicalities, they are putting their money where their mouth is, dedicating £700m of funding for the reform of the courts. Most law firms are already alert as to what I.T. solutions are on offer, but in the fast paced world of I.T., firms might be surprised at what is already available and just how much of a saving there is to be made in terms of both time and money. Mark Hewitt, Managing Director, Rebmark Legal Solutions.

ver the last few years, a new raft of EU data protection regulation has been moving through various EU institutions (European Commission, European Parliament and the European Council). Last month the European Parliament confirmed agreement to the terms of the General Data Protection Regulation (GDPR), which means it will supersede the current Data Protection Directive (officially Directive 95/46/EC) and will be directly applicable to Member States, without the need to implement national legislation. It will not come into force immediately, but will take effect from summer 2018. Insurers and other organisations currently comply with the existing Data Protection Act 1998 and should therefore be largely compliant with the GDPR.


We have roughly 24 months to get our house in order. This requires buy-in from the business, coordination and planning. In my opinion, achieving full compliance with the GDPR by 2018 is a full time job in its own right. It’s massive and potentially complex, depending on the nature of your business, where data flows globally and how that data is processed. You should consider the parts of the GDPR that have the greatest impact to your business model and focus on these areas and plan compliance. For example, the GDPR contains complex arrangements if your organisation operates internationally. There are also changes to how consent is obtained, which should be reviewed in accordance with the Regulation. Data controllers are also obliged to report most data breaches without undue delay. Start planning your compliance now! Compliance with the Regulation and improved data security measures is essential and we are all very aware of global cyber threats to our business. Protecting data should also be incorporated into your GDPR compliance plan because this Regulation will enforce eye-watering penalties for breaches of up to 4% of annual worldwide turnover or 20 million Euros. If we decide to leave the European Union in the referendum next month, we will still need to comply with this Regulation. Don’t kid yourself and think this is something that you can park until 2018, because it’s not. Invest time now and build on your current processes and procedures. There is plenty of guidance and information to help organisations on the Internet and in particular the ICO website. Nicola Klimkowski, Head of Business Control and Development, LAMP Services Limited.

30 Modern Claims

May 2016


Catch up and stay up

Watch this space

really feel for the insurance industry at the moment. Not only are they battling to catch up, and stay up with the threats of cyber-crime in terms of the ramifications for policies and liabilities, but the sands of what is already seen as an immature, developing area continue to shift with the impending European General Data Protection Regulation (EUGDPR).

What could an increase in the small claims limit mean for credit hire companies?


Whichever way the UK votes on 23rd June in the EU referendum, there will be little escape from the impact of the impending EUGDPR, to be implemented at some point in the next two years. If your business is not in the EU, but you process the data of EU citizens, you will almost certainly have to comply with the regulation, meaning that insurers should be preparing themselves regardless. The definition of personal data will become much broader, catching more companies off-guard. The introduction of mandatory data breach notifications “without undue delay and, where feasible, not later than 72 hours after having become aware of it”, will no doubt leave thousands of businesses exposed and operationally ill equipped to comply, resulting in exposure to more potential fines. Not to mention the proposed 4% of gross annual turnover or €20Million fine (whichever is the greater) for severe breaches. No wonder we’ve already seen one or two insurance providers in the UK abandon the cyber market completely! But what can insurers really do in order to prepare themselves? Well, fortunately, a number of governing bodies have already laid some useful foundations. The likes of the EC Council, GCHQ (CESG) and ISO have been busy the last few years establishing cyber security standards; getting into the mind-set of those pesky hackers to develop assessment methodologies, such as, Certified Ethical Hacking (CEH) and establishing industry recognised certifications, such as Cyber Essentials and ISO27001. But how does this help insurers? Well, at least now insurers have some tool to benchmark the companies that they insure. They can determine what measures an organisation has taken to protect its data and thus can apply a more meaningful calculation of risk. Insurers should also not forget about themselves as potential targets of cyber-crime and should seek to conduct cyber threat assessments on their own operations. Ian McGaw, is a Chartered IT Professional with the British Computing Society and an Accredited Cyber Essentials Consultant. A partner and director of innovative law firm Three Graces Legal, who specialise in Cyber Threat Management. If you would like to find out more about how Three Graces Legal can help your organisation protect itself from Cyber Threats, call the team on 0151 659 1070 or email

redit hire companies have probably not given much thought to the cost of litigation. Although recovery of credit hire charges can become complicated and time consuming, claimant solicitors have tended to uncomplainingly recover credit hire fees as part of their client’s claim because their costs of doing so are recoverable and probably more importantly because it’s a necessary evil in order to secure new work. But can this significant financial benefit continue if, as they currently suggest, the government increases the small claims limit for claims for general damages?


A large proportion of motor claims that are currently submitted to the MoJ pre action PI portal fall within the £1,000 to £5,000 general damages bracket. All of these could potentially become small claims if George Osborne’s proposal is enacted in. This could affect up to 750,000 claims per year. Some commentators have suggested that injured persons themselves will be forced to bring their own claims as litigants in person if the small claims limit is increased. This must give those credit hire companies, with greater foresight, sleepless nights. Credit hire claims tend to be defended vigorously even where the claim is submitted with legal support. But bringing a PI claim is currently a very technical process, even where credit hire is not claimed. Medical evidence has to be sourced and general and special damages quantified. I suspect that claimants will in fact still prefer to instruct a solicitor. And certainly where credit hire is involved, it will be in the hirer’s interest to ensure that a solicitor is acting to protect their position. However with small claim recoverable costs being fixed at £80 there will be an inevitable shortfall in claimant solicitors’ income from acting in such claims. This could mean they are uneconomical to run. So how can this gap be plugged? Well, solicitors can deduct more from their clients’ damages, it should be remembered that the maximum charge of 25% of damages applies only to the success fee - there is no statutory maximum fee cap under a CFA. No doubt credit hire companies will hope this is all that is required, but would this be fair? Taking into account the additional legal work the recovery of credit hire fees can entail, it may be that credit hire companies should contribute to the costs of the litigation. Whether they do or not is likely to depend on financial rather than equitable grounds. Watch this space to see if the recovery of credit hire charges fall significantly under any change to the small claims limit. Jon Gouldsmith, Director, Box Legal.

May 2016

Modern Claims 31

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Preparing for more responsibility The European General Data Protection Regulation (GDPR) will be implemented in 2018. How should insurers be preparing themselves for this with their approach to cyber crime and data protection? n an increasingly technological world, sensitive data can be accessed, viewed and made transferrable at a click of a mouse or a touch of an i-Pad to anywhere in the world. Coupled with the threat of crafty cyber criminals who are one step ahead of the game, this makes the world of data handling a risky business to be in.


The key principles governing the law on data protection were set out some time ago in the Data Protection Act 1998, but are now due a shake up in the form of the GDPR, which is set to put data protection firmly on the boardroom agenda. With possible fines as high as 4% of annual worldwide income (or 20 million Euros whichever is the greatest) for non-compliance, it has never been more important to get it right. The GDPR is due come into force in mid-2018. Exactly how it will be implemented in the UK remains to be seen, but the ICO is advising organisations to start planning for its implementation now. For large complex businesses like Insurers the preparations are likely to be extensive and potentially expensive. The key principles remain the same, but the GDPR enhances the existing rights of data subjects and increases the obligations on businesses in respect of data. It also places greater emphasis on the documentation that must be kept to demonstrate accountability. Some additional obligations include a new 72 hour reporting obligation to notify authorities in the event of a cyber incident or data breach, and a specific right for data subjects who have suffered damage as a result of a data breach to complain and claim. How do insurers prepare for implementation of these enhanced responsibilities? As a start, insurers should: 1. Make sure all decision makers are aware that the change is on the way. 2. Designate a person to take responsibility for data protection. 3. Identify what personal data is held, where it is and how it is stored. 4. Review current policies, procedures and privacy notices and adapt to comply with the new rules. 5. Update procedures for detecting, reporting and investigating a cyber incident/data breach. 6. Ensuring staff are adequately trained. However cumbersome the new rules may seem, every cloud has a silver lining. Those Insurers who underwrite cyber liability policies are likely to see demand rise but then again so will the claims.

Preparing for the future How have the recent surge events impacted claims from your perspective?   o one needs reminding what life was like during the recent floods. For businesses who flourish when disaster strikes, it was profitable. But for insurers it was a testing period, and most are still recovering. The reality paints customers having their entire lives washed from under their feet, at war with the environment.


Policies are there to help as we try to reach normality in emergencies. But surge events also bring selfish motives; and this is where the fraud begins. People often ask me ‘where is the fraud in a flood claim when we can authenticate the incident?’ This is when I know we still have not grasped how deceptive people exploit real events. Let me explain with some examples I can evidence. When personal finances are stretched when disaster strikes, claims exaggeration knocks. What should have been a £1,500 claim quickly turns into a £5,000 claim. The insurer is under volume and media scrutiny, so control measures are reduced. Then there are not enough restoration firms available, so sub-contracting increases. Elevated invoices are presented due to the economics of supply and demand. The insurer is manipulated via its supply chain and dishonest customer base, all from one genuine natural disaster. In my opinion, it’s the lack of contingency planning and controls that fail. A premier service that I first launched in 2012 is i-COG’s i-Surge® emergency response. Specifically supporting claim surges, the workflow promotes speedy controls, claims handling philosophy and customer service without compromise. We make the customer feel like they are the most important person in the world and our clients know they have a partner they can trust. We should all forecast based on historical metrics and plan for potential surges. Insurers should have mandatory major incident responses in place for future events and run dummy-exercises to test those responses with the support of their supply chain. Surges do test claims service standards but we should work together to reduce the damage. Learn what we did well, what we could do better and ensure we have robust control measures in place should anything similar happen again. Trust me, it will. Tara Shelton, Founder & Chief Executive Officer, i-COG Claims Management.

David Simon, Chairman, Triton Global and Hannah Newman, Solicitor, Triton Global.

May 2016

Modern Claims 33

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How savvy are you?

A positive step

Why claims firms still need to send letters – and why it’s not bad news

What could an increase in the small claims limit mean for credit hire companies?

n the legal and claims industries, there’s a drive toward paperless processes wherever possible. However, savvy providers still send a lot of their communications on paper, even though it carries costs in both cash and time, in a very competitive industry.

redit hire operators have, for the large part, existed within the realm of the small claims track for a long period of time. It’s only when you get into the prestige end of the market that you would have regularly been generating invoices in excess of £5,000, or more recently £10,000.

Here are some very abbreviated reasons why they do it – and why the burden of doing so needn’t be anywhere near as heavy as it’s been up to now.

As such, a lot of providers have developed systems and processes, which allow for the recovery of hire/repair charges, incurred “in-house”. That is not to say there won’t be an impact though; different firms have different models when it comes to injury cases, but each has a commercial element whether as a revenue vertical in its own right, or as a means of subsiding litigation costs.


Paper ‘cuts’ The evidence of many studies indicates that people not only absorb but remember information better that they read on paper. Stavanger and Princeton universities’ research, for example, shows that when we read print we concentrate better and are less tempted to multitask. In short, if a firm wants what it sends to really penetrate, the effectiveness of paper significantly outweighs an email or a web page. Paper-‘weight’ Studies also indicate that we instinctively attribute more weight and credibility to information that we read on paper. The marketing industry knows this – that’s why business and marketing mail is growing even as personal letters are dying out. Not only that, but we process and remember it better as well. This applies to the younger, ‘digital’ generation just as much as to those who didn’t grow up with computers. Paper ‘chases’ How many unread emails do you have in your inbox? If an email isn’t read by a busy person within a short time of its arrival, it will be displaced by new items and disappear from view. ‘Out of sight, out of mind’? Not always, but often enough to be significant. By contrast, an unread letter usually clutters up desk or coffee table until it’s dealt with. The more organised of us can get straight to reading and absorbing. For the less disciplined, paper sits there, annoying us, until we deal with it.


Most of the current commentary suggests that there will be a mass exodus of lawyers from the claimant PI space, which in turn will see a greater consolidation amongst work providers and those that process claims. The detail of the new proposals will be critical; what will the DBA regulations look like? Will CHO’s be able to process a customer’s injury claim concurrently to an ongoing hire/repair recovery? Could you actually get greater efficiency by running these processes alongside each other within the same organisation? What is certain is that disrupted markets will generate new operating models. As current players exit, the distribution pattern of claims will change. A customer that is retained at the point of FNOL and has a requirement for a replacement vehicle should still find their needs met. Where the commercial pressure will probably be felt at it’s most acute within is the secondary market of claims farming, data-mining and cold calling, as the new commercial reality simply won’t allow for that sort of activity. Now that shouldn’t be too much of a concern for the credit hire sector but may well be a positive step for the reputational rebuilding of the claims sector generally. Andy Whatmough, Managing Director, S&G Response.

A false dichotomy Fortunately, firms no longer need choose between the advantages of a paperless process and the benefits of printed delivery of information. Technology now allows claims providers to send letters paperlessly – without any compromise on security, quality or functionality and in fact with improvements in all of them. The savviest firms are now implementing technologies that give them the best of both worlds, with the results you’d expect in terms of effectiveness, competitiveness and profitability. How savvy are you? Steve Walker, CEO, Foojit.

May 2016

Modern Claims 35


Exceeding goals Mark Ledger explains how developments in rehabilitation technology can reduce costs for insurers. he goal for any client suffering from a serious injury is to return to a life as close to that of pre-injury as possible. Insurers seek to assist the client in meeting this goal, whilst ensuring they maximise ‘value for money’. New developments in orthotic and prosthetic technology are helping clients achieve their rehabilitation goals and keeping costs at a reasonable level for insurers.


In serious lower limb injury cases where clients are considering elective amputation, insurers should ensure other treatments have been considered. New technology in composite manufacture has allowed the development of Momentum®, an off-loading brace designed by the US Military and enhanced by Blatchford in conjunction with the UK Armed Forces at DMRC Headley Court to partially offload the foot and ankle to relieve pressure and pain following complex lower limb injury. The latest carbon fibre construction is lightweight yet strong, making the brace ideal for both daily use and high impact activities. The brace has been prescribed to clients considering elective amputation and a study has shown that the use of such a brace can prevent the need for elective amputation*. At the fraction of the cost of amputation treatment, rehabilitation and prosthetic provision, this brace could allow clients to keep their limb and return to an active lifestyle. Where clients have undergone amputation, developments in CAD CAM scanning technology can save time and money, along with allowing the provision of more comfortable sockets. Scanning technology is considered more accurate than traditional casting methods and, therefore, clients may require fewer adjustments to their sockets. Since the development of microprocessor-controlled prosthetic components, prosthetic insurance claims have increased in value. However, the technology is now such that many clients with microprocessor-controlled limbs are able to return to an active lifestyle and comfortably live without the cost of specialist housing. The latest technology in rehabilitation is available through the Blatchford Clinic. To find out more, please visit Mark Ledger, Principal Prosthetist, Blatchford Clinic. *Bedigrew KM, Patzkowski JC, Wilken JM, Owens JG, Blanck RV, Stinner DJ, Kirk KL, Hsu JR. Skeletal Trauma Research Consortium (STReC). Can an Integrated Orthotic and Rehabilitation Program Decrease Pain and Improve Function after Lower Extremity Trauma? ClinOrthopRelatRes. 2014

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36 Modern Claims

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Understanding your WIP

Making the situation worse?

Do law firms have a realistic view of what they can achieve through a sale of Work in Progress (WIP)?

What are the potential unintended consequences of the proposed Autumn Statement reforms?

he Legal Services Act and Jackson Reforms led many to believe there would be an exodus of personal injury (PI) law firms from the legal sector, selling their WIP to those with appetite to run PI claims within tighter margins and increased competition.

ne of the themes to emerge at a recent Insurance Times Fraud Charter meeting was the importance of understanding the potentially hazardous legal landscape if the government’s proposed whiplash reforms are implemented. The proposals must be carefully evaluated for their likely impact on innocent accident victims, and the legal and insurance sectors.


The reality is WIP deals have been fewer than expected and many have come unstuck with a disappointing return on investment (ROI) – for sellers and buyers alike. Why is this? The valuation of WIP is extremely subjective based in each claim upon a fee earner’s expertise to move it from start to finish in its litigation journey. The hourly rate, claim complexity and number of hours expended all impact upon resulting fee income – and profit or loss. The majority of PI claims are run on fixed fees, turning traditional concepts of WIP valuation on their head. More hours on the clock means less WIP value and profit. So, unless WIP has been adjusted to take into account fixed fees, it is likely to be flawed. Firms that value fixed fee claims utilising court guideline or enhanced hourly rates will find that both are uncertain methods of WIP valuation. Complex PI and clinical negligence WIP can achieve a higher WIP valuation but only if certain criteria have been met, namely that a fee earner has expertise commensurate with the hourly rate and hours worked to date. Unearthing the potential profit these claims can generate can dramatically change the complexion of any WIP valuation. All of the above creates uncertainty for both buyer and seller and maybe this is why WIP sale deals have been scant, with firms preferring to run off their PI claims instead. The highest ROI in PI law firms can only be achieved with an underlying WIP valuation with the correct metrics applied. Ultimately these metrics are the ability of a law firm to progress its PI claims expertly in their litigation journey looking at proving liability, correctly valuing quantum and running a claim efficiently in terms of hours expended dependent upon the costs regime a claim sits in.


The potential unintended consequences of the reforms must be carefully considered before they are pursued further. It is clear that claimant lawyers act as a filter to remove unmeritorious and fraudulent claims at source, preventing them from getting off the ground. It will be difficult for ordinary people to run their own claims, whether online or not, and without expert representation from lawyers. Many people will struggle to run an accident claim without help from a lawyer. The terrifying prospect is that this advice gap will be filled by claims management companies. Without the filtering of claims by reputable lawyers, and with some unprofessional CMCs ‘encouraging’ claims, the number of claims and fraudulent cases may actually increase. The prospect of increased cold calling and dubious marketing practices must be the last thing that is intended by the Ministry of Justice (MoJ). Some CMCs are already preparing for a rise in the small claims limit by employing, or even worse, having self-employed, McKenzie Friends to “assist” accident victims, taking a huge cut of their damages for the privilege. These “friends” have no experience, no professional indemnity insurance and, perhaps in some cases, questionable morals. As with every government proposal, the whiplash reforms must be accompanied by an impact assessment that outlines the likely consequences for all stakeholders. This must be thorough and comprehensive, using all available data sources, and must assess the unintended consequences in detail. I hope that the MoJ officials present at the meeting were listening to those around the table, from all sides of the debate, and to the serious concerns expressed. I would not like to see a series of reforms that make the situation worse.

Until those metrics are understood, racking up WIP hours under hourly rates that do not have a hope of being recovered will lead to disappointing returns, whether that be a WIP sale or continuing to trade.

We have worked for years to improve the system with improved data sharing, the Portal, fixed costs, AskCUEPI, MedCo and the Fraud Taskforce. That hard work should not go out of the window through ill-conceived and poorly considered reforms.

Lesley Graves, Managing Director, Citadel Law.

Donna Scully, Partner, Carpenters.

May 2016

Modern Claims 37

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Restricted Access Fair and accessible justice for all citizens is an important measure of a modern democracy and was once an export that the UK had reason to be proud of. But as access to justice is diminishing, especially for some of the most disadvantaged in society, ARAG’s Paul Hurley asks whether the UK is in danger of tumbling down the justice league table. hat access to justice is being significantly restricted in the UK is no longer a matter of debate. The announcement, in February, that 86 courts and tribunals in England and Wales would close in the following 18 months heralded the introduction of geographical obstacles to justice that will only add to the legal and financial barriers that have been built up in recent years.


Certainly, there are efficiencies to be made and some valuable estate to be realised too, no doubt. But the argument that our courts are underutilised to the extent that nearly 20 per cent of them can now be closed is a circular one. The courts are used less because recent reforms are restricting the public’s access to them. Increasing court fees, limitation of employment rights and cuts to legal aid have all taken their toll, and the successive attacks on after-the-event (ATE) insurance as a mechanism for enabling justice are equally damaging and look set to continue.

Putting justice out of reach

Consultation on the reform of clinical negligence litigation may have been delayed, but the outcome of the previous personal injury reforms ushered in by the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) in 2013, will still not yet be fully calculable when the consultation gets underway. The consequences of introducing fixed costs or making after-the-event premiums unrecoverable in such cases would be disastrous for some of the most vulnerable in our society. ATE premiums need to be recoverable across a significant pool of cases for the system to work. Further tinkering will increase premiums to the point that they are completely unaffordable, and put justice for many of those harmed by malpractice completely out of reach. Proposals to significantly increase the small claims track limit in other personal injury cases and remove the right to compensation for what could be quite serious soft tissue injuries are similarly misguided. They have been presented as an attempt to address the tiny minority of fraudulent and “unnecessary” claims, but suggestions that they will generate a £40 saving that motor insurers will pass on to customers have been widely ridiculed. Thousands of quite seriously injured people will be arbitrarily left without recourse and the few fraudsters will quickly find a new modus operandi. Again, the removal of a large segment of cases from the pool of risk will have a disproportionate effect on those for which insurance could still be appropriate, making the whole concept of ATE insurance unworkable in such cases.

Resilience in the face of adversity

Part of the failure to appreciate the role ATE policies play in

May 2016

The reality is that there are dependable, A-rated insurers with a solid pedigree who have continued to provide certainty to law firms and their clients in spite of the numerous challenges that have beset the ATE market in recent years delivering access to justice appears to be a fundamental lack of understanding about the principles of insurance. The more legislators and their agencies try to chip away at premiums in the many, lower value claims, the higher premiums will inevitably go for the remaining few who often need the benefits of insurance most. Perhaps some segments of the industry may not always show ATE insurance in the best light. Our phones still buzz with calls and texts trawling for injury victims, and unrealistic headline ATE premiums that don’t reflect any meaningful risk and only serve to undermine the wider perception of the important service that our part of the industry still provides. The reality is that there are dependable, A-rated insurers with a solid pedigree who have continued to provide certainty to law firms and their clients in spite of the numerous challenges that have beset the ATE market in recent years. Whatever the future may hold, the ATE sector has proved itself both remarkably resilient and highly adaptable. ARAG was founded, more than 80 years ago, on the principle that every person in society should be able to assert their legal rights, regardless of their financial means, and that principle still guides us, and many others in the industry, today. Legal expenses insurance products, whether sold before or afterthe-event, are designed to provide equal access to justice for everyone in society. When, however, the justice system itself is making it more difficult for a large segment of society to assert their rights in court, it is our responsibility to inform, advise and challenge legislators and their agencies, so that our system of justice is protected, and remains one of the fairest and most accessible in the world. Paul Hurley is Director & Head of ATE at ARAG.

Modern Claims 41

Crystal Clear. For over 40 years our crystal clear thinking has won us a reputation as the law firm insurers can trust to handle their claims. Now it’s won us an award. We are Lyons Davidson, a full-service legal practice with offices nationwide and Modern Claims Magazine’s Law Firm of the Year. Trusted by the industry. Voted for by experts. Clarity is our strength.


THE DOCTORS CHAMBERS MODERN CLAIMS AWARDS 2016 The Doctors Chambers Modern Claims Awards returned to New Dock Hall, Leeds, for its second year on 28th April. Brendan Gurrie, Modern Claims reports on the winners and the highlights of the evening. n April 28th, the second annual Doctors Chambers Modern Claims Awards returned to Leeds, promising to be bigger and better than the previous year, as professionals from across the claims industry gathered to celebrate a wide array of success and talent. Over 400 attendees stepped into New Dock Hall, and into the seventies, as the venue had been decorated in a funky throwback theme. As they entered, guests were met with a drinks reception, sponsored by Forths Forensic Accountants, and there was a huge buzz of excitement about the building in the anticipation of the awards presentation.


Awarding Excellence

The winners were decided by an expert Judging Panel made up of cross-industry professionals, chaired by Donna Scully, Partner, Carpenters and including Rob Cummings, Manager, Civil Justice & Data Strategy, Association of British Insurers (ABI); Ben Fletcher, Director, Insurance Fraud Bureau (IFB); Susan Brown, Director, Prolegal Ltd; Hilary Meredith, CEO & Founder, Hilary Meredith Solicitors; Deborah Evans, Chief Executive, Association of Personal Injury Lawyers (APIL); Andrew Gibbons, Managing Director, Mason Owen Financial Services (judging on behalf of the British Insurance Brokers’ Association); Laurence Besemer, CEO, FOIL; Francis Kendall, Council Member, ACL; Steve Chelton, Head of Claims and Insurer Fraud Protection, Swinton Insurance and Martin Coyne, Managing Partner, Ralli Ltd. Following an excellent three-course meal, eaten on vinyl record tablemats underneath sparkling mirror balls, and accompanied by wine sponsored by Parklane Plowden Chambers, the host for the evening, comedian Hal Cruttenden made his way to the stage to entertain the crowd, before beginning the awards presentation and announcing the winners. Matt Tuff, Hudgell Solicitors, picked up the prestigious ‘Claims Professional of the Year’ award, while Midway Insurance Ltd were awarded ‘Broker of the Year’. Meanwhile, Harmans Costs scooped the ‘Costs Company of the Year’ award, while WNS Assistance and iovation took home ‘Claims Management Company of the Year’ and ‘Service Provider of the Year’ respectively. Covéa Insurance secured a huge double win, and were awarded ‘Insurer of the Year’ as well as the ‘Client Care Award’. Other big winners were Transportation Claims Ltd, a subsidiary of FirstGroup PLC, who won ‘Legal Team of the Year’ and Lyons Davidson, who were awarded ‘Law Firm of the Year’. Mark Savill, Managing Director of Lyons Davidson said of the win, “what is really pleasing is that the judges not only looked at our business growth and strategy, but recognised the initiatives we have made with employee engagement and diversity over the last year. We have all had to work hard over the last couple of years to respond to the changes in the claims sector and winning this award is clear recognition for all that our staff have delivered for our customers and our business partners.”

44 Modern Claims

We have all had to work hard over the last couple of years to respond to the changes in the claims sector and winning this award is clear recognition for all that our staff have delivered for our customers and our business partners Mark Savill, Lyons Davidson, Law Firm of the Year Forging the Future

So far, 2016 has seen a great deal of change in the claims industry, and the industry has responded, with professionals from across the country providing a variety of innovative solutions to ensure that they can continue to give their clients the best possible service. In order to recognise these solutions, the hotly contested ‘Innovation of the Year’ was awarded to ISO, for Case In Point, a predictive analysis tool which accesses historical claimant and settlement records, and personal injury data in order to provide insights into changes and patterns in the claims industry. Meanwhile, Lavatech Ltd were awarded ‘Technology Initiative of the Year’, for their app, inCase. Fraud is a constant challenge in the claims sector, but new solutions are constantly being developed to counter this, and the ‘Counter Fraud Initiative of the Year’ award was won by LV= for their Vishing App, which provides a simple system to identify and report voice phishing scammers in order to prevent customer data leaks. It is not only important to provide exceptional services and respond to changes in the current claims environment, but to also prepare for the future by attracting and developing talent. A number of awards sought to recognise this, and the ‘Rising Star’ award was given to Hayley Riach, Hill Dickinson LLP, with ALPS Legal Practice picking up ‘Outstanding Commitment to Training’. Costs ADR showed that they’re one to watch, and that the claims industry has a bright future, as they took home ‘Newcomer of the Year’.

Celebrating in Style

The highly anticipated ‘Outstanding Achievement of the Year’ award was presented to Kieran Magee, Partner at TRUE Solicitors, who is lauded by his peers for his passion for the industry and his dedication to his clients. Announcing the award, Chair of the Judging panel, Scully spoke about Kieran’s “energy and commitment”, and said “he is described by his colleagues as a never ending source of ideas and suggestions for improvements”.

May 2016


Donna Scully takes to the stage to present two prestigious awards

The final award of the evening was the highly prestigious ‘Lifetime Achievement’ award, which was given to Tim Wallis, primarily a mediator with over 30 years of experience, though he also counts litigation, a 20-year association with the Civil Justice Council (CJC), and a seat as the independent Chair of Claims Portal on his extensive résumé. Wallis said of winning the award, “I feel honoured. My career has not been “usual” and to have my work acknowledged in this way means a lot to me. I am grateful to the judges and for the fact that this award will continue to draw attention to the fact that mediation is a really good business tool: mediation has never been more relevant to those of us who deal with claims in a quickly changing landscape”. After the awards had concluded, the evening’s entertainment began, and the attendees were transported even further back into the 70s with a stellar performance from The Stevie Wonder Experience. Guests also had the opportunity to have their pictures taken in a vintage taxicab photo booth, sponsored by DWA Claims, complete with wigs, glasses and props. A Silent Auction, organised by Impulse Decisions and sponsored by Apex Medical Records, also ran throughout the night, raising funds for the British Heart Foundation and Samuel’s Charity, which endeavours to bring smiles to ill children and their families across the UK. The auction raised almost £2,000 for the respective charities. As the evening concluded, everybody gathered on the retro dance floor to enjoy a playlist of 70s classics. Kate McKittrick, MD of Charlton Grant Ltd publisher of Modern Claims Magazine, called the evening “a huge success”, saying, “it is important to recognise talent and achievement, and tonight we did just that. Everybody had a great time, and we’re going to have a lot of work on our hands to top it next year.”

Kieran Magee is announced as the winner of the ‘Outstanding Achievement’ award

Brendan Gurrie is Editorial Assistant at Charlton Grant. Modern Claims would like to thank all those who attended, nominated and sponsored for making the evening possible. To view more images from the night and to register your interest for next year’s awards please visit, or get in touch with Ellie Campbell via or 01765 600909.

May 2016

The guests sit down to enjoy a fine three-course meal

Modern Claims 45


Winners Legal Team of the Year

Winner: Transportation Claims Ltd, subsidiary of FirstGroup PLC Highly Commended: Hill Dickinson LLP Sponsored by Evolution Costs

Claims Professional of the Year

Winner: Matt Tuff - Hudgell Solicitors Highly Commended: Marshal Ahluwalia - Walker Morris LLP Sponsored by Fooj IT

Law Firm of the Year

Winner: Lyons Davidson Limited Highly Commended: BLM Sponsored by Amberis-ate

Insurer of the Year

Winner: Covéa Insurance Highly Commended: ARAG plc Sponsored by Veracity Claims

Broker of the Year

Winner: Midway Insurance Services Ltd Highly Commended: Clark Thomson Insurance Brokers Ltd Sponsored by MSL

Claims Management Company of the Year Winner: WNS Assistance Highly Commended: MSL Claims Solutions Sponsored by Laird Assessors

Costs Company of the Year Winner: Harmans Costs Highly Commended: Costs ADR Sponsored by Spectra Legal

Client Care Award

Winner: Covéa Insurance Highly Commended: Midway Insurance Services Ltd Sponsored by Checkaprofessional

Innovation of the Year

Winner: ISO Highly Commended: inCase - Lavatech Sponsored by CCL Vehicle Rentals

Rising Star Award

Winner: Hayley Riach - Hill Dickinson LLP Highly Commended: Kayleigh Farrell - I-COG Claims Management Sponsored by Sliced Bread/Sharedo

Technology Initiative of the Year

Winner: inCase – Lavatech Highly Commended: Claims Consortium Group Sponsored by Eclipse Legal Systems

Counter Fraud Initiative of the Year

Winner: LV= Highly Commended: Asset Protection Unit Ltd (APU) Sponsored by Stream Customised Claims

Service Provider of the Year

Winner: iovation Highly Commended: WNS Assistance Sponsored by I-COG Claims Management

Outstanding Commitment to Training Winner: ALPS Legal Practice Highly Commended: Imperial Consultants Limited Sponsored by Lyons Davidson

Newcomer of the Year

Winner: Costs ADR Highly Commended: John Lamb Insurance Broking Sponsored by EDAM

Outstanding Achievement of the Year Winner: Kieran Magee Sponsored by Carpenters

Lifetime Achievement

Winner: Tim Wallis Sponsored by Doctors Chambers Ltd

I feel honoured. My career has not been “usual” and to have my work acknowledged in this way means a lot to me Tim Wallis, Lifetime Achievement Award Headline Sponsor


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46 Modern Claims

May 2016


Attendees were taken further back to the 70s with The Stevie Wonder Experience

Hayley Riach is named Rising Star of the Year

The winners were decided by a panel of expert judges

Comedian Hal Cruttenden kicked off the awards with a hilarious set

Guests had the chance to have their photos taken in this vintage 70s taxicab

Tim Wallis receives the Lifetime Achievement award

Lyons Davidson take home Law Firm of the Year

Covea scooped two awards, for Insurer of the Year and the Client Care Award

May 2016

Modern Claims 47

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M&A Due Diligence: Lessons for Slater & Gordon Recent publicity surrounding a number of high-profile acquisitions that have gone sour in the legal sector has highlighted the critical need for good due diligence to occur as a critical part of M&A transactions. Zoe Holland reports. ue diligence was, traditionally, solely the preserve of Accountants for the financial DD, and Lawyers for the legal DD. In an ever more complex legal environment, ZebraLC has seen that the areas of DD undertaken have expanded during M&A activity in recent times.


Perhaps Slater & Gordon are wishing they had taken a little more time, care and had an eye of independence over the due diligence conducted upon Quindell? Conducting due diligence with 70 of its own lawyers leaves questions to be answered. Were they trained for the role? Did they use audit risk-tracking software? Were they independent and experienced enough to take a commercial view? Technical due diligence at field level is not a role for junior fee earners nor for fee earners not trained in a commercial audit role. Those clients of ours that are making good headway into this sector are doing so because they undertake due diligence not only into the financial and legal aspects of a firm’s performance, but also in other areas, with technical and WIP due diligence at the heart of the review. In addition, it is not uncommon to see due diligence also conducted into I.T., Human Resource, the Consumer Journey, SRA Regulation & Compliance and case management systems and process, to name but a few elements. It is clear that firms looking to acquire should do their homework with comprehensive due diligence, and only merge or acquire on their terms, when it is in the interest of furtherance of their business strategy. Due diligence drivers Driven by a host of motivators into the sector, and already with their own consumer brands, some new entrants’ approaches to due diligence in getting to the deal takes a different perspective from traditional law firm to law firm M&A. An accountancy based due diligence is, of course, at the core of the process, but external investors should want to understand and be excited about much more than just the bottom line. EBITDA calculations and Independent Business Reviews are not enough. For example, for new entrant ABSs, the issue of brand protection

External investors should want to understand and be excited about much more than just the bottom line May 2016

Firms looking to acquire should do their homework with comprehensive due diligence, and only merge or acquire on their terms, when it is in the interest of furtherance of their business strategy is a key factor. Due diligence has to be financial and commercial, but also has to look at a more granular level than accounting figures. Getting under the skin of the firm is critical in the process. Understanding indemnity risk issues isn’t just about reviewing a firm’s claims history. It requires a view of emerging risks. Associated risks CFA and retainer issues must also be under the spotlight. Recent case law places uncertainty around assignment issues, funding transfers from Legal Aid to CFAs, and regulatory risk around client retainer and success fee advices. The investment boards ZebraLC has worked with require reassurance that the target law firm’s asset base is investable and suitable for funding, that positioning in the market and strategic future is significantly attractive, that technical expertise fits their own brand quality, and that operational and indemnity risk is low. After all, why would you look to acquire another firm if you did not know that the financial due diligence and modelling supported it, the integration was possible from an I.T. perspective, the systems and processes and customer journey provided were satisfactory and capable of integration, the technical advice given in the cases was correct, and the WIP returns were satisfactory? The short answer is that you would not. Such a comprehensive approach to due diligence is more expensive in the short-term, but in the longer-term, it is undeniable that investment in worthwhile, solid and wide ranging duediligence is what ensures acquirers, and more importantly the banks or investors that fund them, have the integration and returns on the transaction, in line with their expectations. Zoe Holland, Managing Director, ZebraLC.

Modern Claims 49

ISSUE 24 June 2016 ISSN 2050-5744



E KATHRYN STON going s, and we are not s from Judicial Reviewfine-tune our process” “We learned lesson - they helped us hide away from that

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Driving the change agenda Jim Pittman considers how loss adjusters should approach the process revolution currently taking place in the claims industry, in order to remain relevant to insurer clients and customers. hen I peer into my crystal ball, I see a very different future for property claims from my past. I started as an adjuster in August 1987 and was paid to spend most of my day driving around Cornwall meeting customers and listening to the radio (no mobile back then).


Loss adjusters of the future are facing a revolution of process, technology and service demands, which is changing the industry. The challenge for adjusting and claims firms is to remain relevant to insurer clients and their customers.

The industry is waking up

It’s now a case of taking the claims expertise and applying it to the process to deliver a service with no failure demand (work caused by a failure to do something, or do something right), and no waste (non value adding work/time delays). Just as the industry is waking up to the benefits of systems thinking, the demand is already shifting to simple seamless solutions that do not overtly involve a human. Most insurers are looking to 2020 as the point at which their digital strategy starts to really deliver. The challenge is moving rapidly to digitise the service and enable customers to access the simplest of claims services through a machine 24/7/365. In hand with this, the property supply chain is taking more of the validation work and attempting to deal with the claim in a “one stop shop”. Think MOT or repairer doing the assessment, repair, courtesy car and sorting the paperwork. So, why am I building a claims firm in this environment? Simply because I believe we can bring claims expertise in new forms and help clients, where we believe we have strategic alignment, to stay at or near the front of changes in the market. In reality, claims directors still worry about the same things (I used to be one): • How is my service measured and can I be in the leading pack/ first in the rankings? This will come under more scrutiny as online feedback becomes more common. Think Trip Advisor for Insurance; • How do I control claims costs and cost of administration – my combined ratio? Insurers may have lots of money but margin for error is slim and the Claims Director is expected to provide the correct balance between service and claims spend; • How do I ensure I am legal, compliant and can evidence these things if someone comes looking? Not just in my own team but across all my suppliers and their suppliers; • How do I ensure that the next weather event is better than the last, claims are settled quicker, costs are better controlled and the local politician doesn’t decide to focus on my company for the wrong reasons?

May 2016

With consumer expectations shifting daily and smart phones enabling so much interaction with the world insurers need partners who can keep pace And then there are the day to day challenges that go with the job of running a large and complex team in a dynamic environment where no two days are the same!

Opportunity knocks

There is a great opportunity for innovative, and brave claims firms to focus on the end customer and think about what they want and need when making a claim. The key to being relevant and on an Insurer list for tender or pilot is lowest sustainable claims and servicing costs bringing the right levels of customer satisfaction. Principally, we exist to help the insurers deliver their strategy. This could be by piloting, testing, learning and ultimately deploying back into the insurer the refined processes and technologies. This could be by working within the supply chain to enable others to be better. Or it could be a complete outsource proposition where we will have long term relevance for these clients as long as we keep them at the front for service, combined ratio under control, ensure we are legal, compliant and can evidence this and deal with weather events better than others! It’s clear that the execution of the plan is paramount. With consumer expectations shifting daily and smart phones enabling so much interaction with the world insurers need partners who can keep pace. So it’s a case of deliver, and if it goes wrong, fix it fast and keep moving forward. With a clear strategy to drive the change agenda by experimenting with digital/assisted self-service in volume claims and be the best experts on complex claims, I am confident we will have relevance for a while yet. And when I lie in bed at night contemplating the next 10 years I am grateful I chose property rather than motor. I cannot imagine how I’d prepare for cars that self-drive and rarely crash. Jim Pittman is General Manager – United Kingdom Operations at Stream CS.

Modern Claims 51

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Digitising your claims business Oliver Smith explains how choosing an agile technology platform will cement a bright future as the claims industry continues to evolve. t is without doubt that technology will provide the claims sector with an important role in society. It’s exciting stuff and it is happening as you read this. Apple and Humana in the United States have partnered to let consumers share Apple HealthKit data, BMW and Allianz offer usage based insurance for the car manufacturer’s i3 and i8 electric vehicles; and people’s homes are becoming single connected entities capable of communicating with insurance firms.


Insurance and claims businesses have the chance to use technology to embed themselves into future societies to provide real benefits such as encouraging healthier living and monitoring people’s homes whilst they are away. All this is wonderful, but must seem very daunting if you’re in the early stages of digitising your claims business. This article looks at how to embark upon your firm’s digital transformation and what to look for when planning for the future. After all, change of this size is hard and avoiding mistakes is extremely good for business.

Digital foundations

As smart technology moves forward and insurance and claims become more interconnected with technology and clients, it’s really important to be able to easily and cost-effectively integrate with your claims and case management platform processes and provide major cost savings. You need a platform that enables you to break down claims into constituent parts so that lower-paid workers, or even outsourced suppliers, handle general administrative tasks.

Much like building a house, your digital transformation journey starts with the foundations. These foundations are in the form of a claims and case management platform.

Automating processes, such as obtaining traffic reports or other manual tasks, will also reduce overheads and enable your firm to achieve more for less.

Choosing the right platform is key to all other digital developments. This is because your business process management platform controls workflow of tasks and activities and is a claims firm’s nerve centre; transmitting information and data across the entire organisation, from daily tasks for individual case workers, to client interaction through to management reporting.

Big data

So what are the key features you should look for that will help ensure your digital transformation is a success and that you are future proofing your business? Listed, in no particular order, are key features that will enable improved efficiency now and a solid base for future developments.

Integration First

Agile and flexible workflow

The flow of work within your claims business needs to be dynamic and flexible. A robust and agile workflow engine will enable business decision makers to quickly create and modify existing workflows to meet the ever changing demands of clients. Many legacy systems have satisfied the need for the traditional in person approach to claims. However these platforms provide a rigid backbone and require significant investment to modify. Agility is the key word and being able to adapt to changing market conditions will ensure your firm is at the forefront of innovation.

Disaggregation and automation

Improved efficiency means lower costs and ultimately higher profits. The surest way to improve efficiency is by making your workforce a smooth running, process driven team, working as one entity. The ability to distribute work efficiently across your employees and automate administrative tasks will improve your internal

May 2016

Big data is a buzz word at the moment; it essentially refers to large data sets that can be analysed to reveal patterns, trends, and associations. Your claims and case management platform should enable you to harness this information to provide your firm with a massive competitive advantage.

Whilst you may find a business process platform that gives you everything you need for today, it’s the future you should be mindful of. As smart technology moves forward and insurance and claims become more interconnected with technology and clients, it’s really important to be able to easily and cost-effectively integrate with your claims and case management platform. What good is access to all of these new sources of information if obtaining it is a manual process that’s not efficient? In order for a business to thrive, your team needs to be encased in their work and have all of the information they need to make them more effective.


Advancements in telemetrics and smart devices will provide insurance and claims businesses with wondrous opportunities to integrate services into the everyday lives of clients. The world is interlinked and technology is changing everything. Your business process management platform is the gateway to possibility. By choosing a platform that is agile, designed to integrate and uses data to reveal patterns and trends, you are building a bright future: the ability to bolt-on technologies and tailor processes and workflows to continually evolve, innovate and thrive. Oliver Smith, Marketing Manager, slicedbread.

Modern Claims 53

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Motoring technology: bridging the gap James Roberts asks if the insurance hire market is keeping up with vehicle technology. ntil very recently, bigger was always better when it came to car engines. A vehicle’s power was measured by the number of litres it pushed around under the bonnet. But we now live in different times when smaller is definitely more beautiful! Motorists still want power under the bonnet of their car, but they also clamour for fuel economy, which benefits their bank balance, as well as reducing their impact on the environment. And the innovators have responded to that demand. Today’s car engines are getting smaller without compromising on power. In fact, some one-litre, three-cylinder vehicles deliver more power than their four-cylinder counterparts of generations gone by.


The incredible shrinking engines

Of course, consumer demand isn’t the only reason the motor industry has had to up its game. The regulatory focus on vehicle emissions is sharper than ever. And, of course, competition is coming from elsewhere, with the combustion engine coming under increasing pressure from the electric vehicle market, which seems to promise the greener, more economical future to which many motorists, not to mention governments, aspire. As a result, motor manufacturers are squeezing more power out of smaller engines, using a combination of turbochargers, improved lubrication and components, in combination with advances in software technology within a car’s management system. The rental industry is already embracing the new style of smaller, turbocharged engines, which achieve the same brake horsepower (BHP) as larger engines. Indeed, Europcar works closely with many of its corporate clients to help them meet their corporate responsibilities regarding emissions. However, it’s a different story when it comes to replacement vehicle hire for the insurance industry.

Behind the times

The ABI third party hire vehicle categorisation is based on chassis and engine size, rather than power output and this is making the categories outmoded in the age of the smaller, powerful engines of today. The ABI third party hire framework generally applies a higher rate to vehicles with a larger engine size. Once upon a time, this principle made sense, because the larger the engine and the vehicle, the more expensive the vehicle would be. But fast forward to today and brake horsepower (BHP) is a much better barometer than engine size. For instance, Ford’s EcoBoost range offers a one-litre three-cylinder vehicle that delivers more power than a 1.8-litre, four-cylinder engine of the previous generation1.

It is clear that the ABI third party hire framework is evolving, as many standard hire groups now reference variable engine sizes It is clear that the ABI third party hire framework is evolving, as many standard hire groups now reference variable engine sizes. To many in the sector that is progress, but for others there is still a high degree of uncertainty, with many credit hire organisations unsure what GTA2 group to bill the ‘at-fault’ insurer. This results in frictional claims costs as well as potentially unnecessary litigation if the credit hire organisation and insurer reach stalemate. And that’s without even taking into account the fact that, at the heart of the dispute, sits the customer who has been involved in a motor accident and could really do without further disruption.

Time for change

It’s clear that the ABI categorisation is out of step with the technology currently driving the motor industry and changes need to be agreed between its subscribing members – including the insurers and the credit hire organisations – in order to create a new rating system that reflects today’s engines. Using BHP as a guide makes far more sense than relying on engine size. Understandably, however, a complete overhaul may be seen as too much too soon, but that doesn’t have to mean an end to the discussion. As it stands today, Europcar’s strategy is to reduce the company’s carbon output by sourcing vehicles ethically as well as investing in businesses that provide more environmentally conscious solutions such as Ubeeqo, the unique mobility platform and e-Car Club, the UK’s first entirely electric pay-per-use car club. This strategy is the right one for the environment and we are already seeing positive signs that suggest that the insurance sector is catching up. With a little bit of turbocharging to the industry’s engine, the gap between the ABI and today’s motoring technology can be bridged for the benefit of all parties. James Roberts is Business Development Director, Insurance at Europcar UK Group. GTA Car Rates



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Big Data Blocker The combination of effective management, delivering a brand promise, enabling positive client experiences, attracting talent and making a sustained profit are the same concerns for barristers’ chambers as for legal practices. However, as Stephen Ward, Clerksroom, writes, delivering these elements effectively requires the assessment of meaningful ‘big data’. “Big data is like teenage sex: everyone talks about it, nobody really knows how to do it, everyone thinks everyone else is doing it, so everyone claims they are doing it.” Dan Ariely, Professor of Psychology and Behavioural Economics. ig data management is creeping into the vernacular of the legal sector but is possibly the last thing the Bar has identified as an essential tool for growth. The idea of growth is simple really: understand your business, direct it, resource it, promote it, grow it. Yet how can you truly understand your business unless you can extract the right comparable data? For claims businesses, process data is equally essential for costs evaluations, for profit, client care and evaluating future service evolution.


Our entire business model was launched on the basis that it was time for a change at the Bar. Over 15 years on and it’s time to change again, embracing all the Internet and cloud based systems have to offer. We want to push our new business plan forwards but to do this, we need to undergo an extensive process audit and that requires effective ‘big data’ analysis. Our recent business growth has included the introduction of Clerksroom Direct, the UK’s largest online direct access platform. We have 1000+ barristers offering their services to direct access clients across the UK and collaborate with 180+ chambers. Couple this with Clerksroom Chambers (which offers over 75 barristers to legal clients) and Clerksroom Mediators (home to 500+ ADR specialists) - all of whom are linked virtually into our clerking site in Taunton - and you create some seriously complicated ‘big data’ output and audit requirements. Historically, data processing has been ‘simple’ at the Bar. Most chambers administrate via one of two main bespoke-to-chambers ‘plug and play’ platforms. Most platform providers allow for bespoke modules to be created and data reports generated. However, they control and host that data, not us.

Why is that a problem for us?

We are the only chambers to be set up as a limited company, with an owner/founder managing director and other stakeholders. We are incentivised to push the business but we need to monitor and measure results to ensure value for money and assess growth effectively. That requires cohesive, easy-to-analyse big data.

Big data blocker

What prevents us from a successful process audit is the lack of Application Programme Interface (API) in bespoke chambers systems. In an ‘IT for Dummies’ sense, API enables external server systems or applications to share data with your own system, in the same language. If you consider that, we have three core businesses with layers of

May 2016

Google Ad Word spends are now an accepted and widely used marketing tool for claims brands but without big data, how can you track what inspires your clients to search for your services and make an instruction? data created over the last 15 years since we launched. The fact that each module operates on a different system means that we work directly from the Internet, from modules we host on our own server and from modules other companies host on their own servers. APIs allow these modules to interface, share information consistently and therefore - when it comes to planning your next business move – allows you to stream the data from all modules into an easy to read table of results. You can then analyse to your heart’s content!

Big Data Benefits

With the ability to simply extract and analyse cohesive big data, claims businesses can easily measure and confidently implement a meaningful strategic business plan and also allow for operational benefits, particularly in client service and marketing. For our Clerksroom brands, the Internet is our mothership, the core tool for the whole business and marketing is no exception to that rule. As an example, Google Ad Word spends are now an accepted and widely used marketing tool for claims brands, but without big data, how can you track what inspires your clients to search for your services and make an instruction? Therefore, how do you confidently decide which ad words to invest in, where and how much money to throw at it? Technology is the backbone of every business decision and evolutionary step we make. It provides the evidence we need to put our extensive strategy into action. We just need to be able to read and unpick the data more effectively. Once we can (and we’re not far off!) we can ensure our services, processes, fees and resources are fit for purpose, that the right people are doing the right job (consistently), that we add value to the customer experience and that we will continue to lead change in the legal claims sector, for the right reasons! Stephen Ward, Managing Director, Clerksroom, Clerksroom Direct & Clerksroom Mediators.

Modern Claims 57


Sector Soapbox Modern Claims’ panel of resident industry associations discuss issues impacting the claims sector at the moment.

Travel cover needs medical attention ike many insurance professionals, I often receive my Sunday paper with some trepidation as when flicking to the finance section I often wonder what the latest horror story regarding insurance is likely to be in those pages. Often at first sight, the criticism seems warranted, but when you read deeper you see it is not the insurance product that is at fault, although this suits the stereotypical theme that bad news has more chance of selling the paper. One such story appeared in the Sunday Telegraph on 6th March relating to the unfortunate story of a 63 year old lady who travelled to the USA, relying upon the travel insurance provided as part of a bank account package. The lady had a congenital heart condition, which effectively rendered the medical treatment that she needed upon reaching the USA to be uninsured. This resulted in a £200,000 medical bill that she could not afford to pay. This caused her to have to fly home from her holiday, against medical advice, on a scheduled flight as opposed to the Air Ambulance that she perhaps needed. The article is written in a manner that appears critical of the insurer in dealing with the claim, but in reality, as with PPI, a perfectly good product designed by the Insurance Industry was inappropriately distributed through a Bank, causing immense problems to the policyholder at the time of the claim. Therefore, the conclusion that one can draw is that whilst the product is appropriate for its purpose, the insurer dealt with the claim within the terms of the policy and thus can be beyond reproach, as the problem lies with the distribution of the policy. Travel insurance generally is taken for granted by the vast majority of the population, when in fact it is a very complex multisection combined insurance policy, requiring careful pre-contract disclosure.


Disclosure is often not restricted to the policyholder themselves, but also to additional family members or relatives or anyone upon whom the trip may depend in relation to cancellation or curtailment cover. Such complicated commercial contracts require professional and skilled distribution, for which not only the distributing intermediary, but also the policyholder, must take responsibility. The second insurance mediation directive, which recently passed through the European Parliament, will require that the distributors of products must take greater responsibility for how their products are sold, which is something that general insurance brokers believe that the Regulator in this country should have already adopted in a more forceful manner relating to the distribution of these products through the secondary market of Travel Agents and Banks. The basic travel insurance policy itself is not the problem; it is merely the distribution that can cause issue with claims. The repeated number of articles of this nature that appear in the press still do not seem to reach the consciousness of the general public, who quite often are more keen to ensure that the holiday is sorted and the “box ticked” in relation to travel insurance than they are necessarily about buying a complex multi-section commercial contract that could afford them protection whilst overseas. Andrew Gibbons ACII, Managing Director, Mason Owen Financial Services Ltd and Chair on behalf of BIBA of the Industry Claims Working Group.

MedCo Anniversary Review As MedCo reaches its first anniversary of operation, we look back on the challenges it has faced. edCo launched on 6th April 2015 and was established by the Government to help improve the quality of medical reporting for whiplash claims, and introduce much needed independence into the process, by removing the financial links between law firms and the medical experts who provide advice. Since its launch, there have been over 400,000 searches of the MedCo system resulting in the selection of an MRO, and over 45,000 searches resulting in the selection of a medical expert. However, wider behavioural issues stemming from both claimant lawyers and MROs have been brought to light since the introduction of MedCo and auditing of MROs and users has commenced. Necessary action has been taken against those users found to be in breach of the relevant agreements. It is likely that the behavioural issues in the claimant market highlighted by MedCo may have influenced the Government to take more determined action to tackle the compensation culture, resulting in the announcements made in the Autumn Statement to raise the small claims track limit and remove general damages in low value whiplash claims. The MoJ have stated that they see a role for MedCo in the reformed civil justice system and they will be working with MedCo to ensure an effective reformed system going forward. In the meantime, MedCo is working to ensure that all


58 Modern Claims

operational experts are fully accredited before the due date. The Civil Procedure Rules Committee recently announced an extension of time for the completion of accreditation training until 1st June 2016. The accreditation training is designed to ensure that users will have the confidence that whatever expert they instruct via MedCo, they will have a high level of competency to provide medico-legal reports. In addition, and in response to user feedback, MedCo have recently launched a Medical Expert Enquiry and Case Verification function, enabling authorised users the ability to check an expert’s status and verify the MedCo case ID against a professional ID. The MoJ have recently published a response to their review of MedCo, announcing their intention to amend the qualifying criteria for MROs in order to address such practices as registering multiple ‘shell’ MROs. The changes to MedCo following the review are intended to be implemented in late summer 2016. MedCo has faced many challenges and changes during its short operational lifetime, and remains determined to improve public confidence in medico-legal reporting. Natalie Larnder, Policy Adviser, Civil Justice, Association of British Insurers (ABI).

May 2016


Reducing the number of whiplash claims recent study by AXA Insurance reveals that the public is being bombarded by 12 million nuisance calls a day by claims management companies (CMCs) and that about a third of these relate to whiplash claims. Many are unsolicited, encouraging speculative and fraudulent claims. This extraordinary figure chimes with information from the Claims Management Regulation Unit. Last December a CMC in Lancashire was fined £850,000 for six million nuisance calls relating to noise deafness claims over a six-month period. Clearly, there is a serious issue with nuisance calls and the claims these encourage. Against this background, the report of Carol Brady on the regulation of CMCs was eagerly awaited by FOIL and the insurance industry. FOIL welcomes the recommendations aimed at creating a tougher approach to regulation and the recommendation that the responsibility for regulation should pass from the Ministry of Justice (MoJ) to the Financial Conduct Authority (FCA). FOIL believes that the FCA will provide a more rigorous regulatory environment. The more ‘outcomes-focussed’ approach recommended by the review should make it harder for CMCs to work around the regulations and a more transparent approach to engaging a CMC will help consumers understand what they will be charged and when they can pursue claims themselves.


But merely tightening up on regulation is unlikely to go far enough. FOIL supports a cap on CMC fees. We believe that taking money out of the claims process is necessary to tackle the compensation culture. That will be particularly important when the Government raises the small claims track limit. Without control of CMC fees for assisting with low value claims there is every chance that claimants will be exploited by CMCs and that large numbers of speculative and fraudulent low value claims will be encouraged. Whilst the MoJ is currently consulting on fees for CMCs, it is disappointing that the Brady review doesn’t make recommendations aimed at tackling this issue. It is also unfortunate that the review was not able to look at extending regulation to Credit Hire Organisations and Credit Repair Companies. FOIL believes that the same regulatory need arises in these areas. Whilst the review’s recommendations are to be welcomed there is more to be done and further controls of CMCs will be necessary if the Government’s aim of reducing the number of whiplash claims and ending the claims culture is to be achieved. Duncan Rutter, President, Forum of Insurance Lawyers (FOIL).

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PI Law Direct Implements Proclaim Eclipse Legal Systems, the Law Society Endorsed legal software provider, has announced the integration of Proclaim Case Management with PI Law Direct.


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Unique barrister-led start-up firm implements Proclaim “PI Law Direct is the first and only barristerled PI firm in the country. Proclaim has not only helped us maintain our business model of offering professional, accurate advice from the true leaders in the field – it has helped us achieve that smoothly, efficiently Darren Gower and with ease for our clients.” Andrew Smith, Head of Legal Services, PI Law Direct New start-up firm, PI Law Direct, is the first barrister-led PI law firm specialising in Personal Injury and Clinical Negligence. Based in London and Sheffield, the expanding firm ensures its clients receive high quality service, providing experienced barristers to manage each claim from inception right through to completion.

The Challenge

As a new start-up firm, PI Law Direct needed a Practice Management System to support its ambitious growth plans. The firm was looking for robust software that had the flexibility to adapt and develop, allowing fee earners to process a high volume of cases in a cost-effective manner.

The Solution

utilised by all staff at PI Law Direct. The system provides a centralised solution for a range of injury claim types, which are now processed seamlessly with Proclaim’s A2A integration with the Government’s Claims Portal. The Practice Management toolset provides full integration with fee earner activity and gives PI Law Direct the option to manage appropriate access to financial information, as well as cater for a full range of posting types, resulting in less work for cashiers.

The Results

Proclaim has provided a centralised desktop solution for handling claims, ensuring staff know where each piece of client data is at all times, meaning an improved client service. The A2A feature (which provides direct integration with the Government’s RTA and EL/PL portals) has been a key business driver for PI Law Direct, providing staff with the ability to process claims quickly and efficiently through the Proclaim desktop and enabling the firm to take on a larger volume of cases. In the long-term, PI Law Direct plans to expand its operations and have Proclaim sitting at the core providing a flexible and future-proof solution. For further information, please contact Darren Gower, Marketing Director at Eclipse Legal Systems, part of Capita plc, via darren.gower@ or call 01274 704100. Alternatively, visit

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We are on the cusp of road traffic becoming safer, smarter, smoother Autonomous technologies will ‘disrupt’ established business models in the motor industry and insurance will not be immune. e are on the cusp of road traffic becoming safer, smarter, smoother. Autonomous technologies will ‘disrupt’ established business models in the motor industry and insurance will not be immune. Technical, legal and insurance issues will be overcome so that fully autonomous vehicles will be a reality on British roads.


“There will be, potentially an 80% reduction in accident frequency by 2040” KPMG. “AEB systems are most effective at lower speeds (<25mph) where more than 75% of accidents occur” Thatcham. Claims will reduce, both in frequency and severity – a major threat to all businesses involved in the motor insurance chain. By 2020 you will require a different claims model. So is now the right time to consider outsourcing your claims to a quality provider? FCA regulated and enjoying Chartered Insurer Status, Broker Direct Plc is an MGA offering a full end to end claims service. We do not have a call centre but teams of multi skilled, qualified claims professionals. A claim is a promise and we must deliver on that promise. We respond to evolving customer needs optimising their claims experience by increased speed, convenience and simplicity. The dedicated handler will listen and never assume... • First Notification • Vehicle Damage • In-house Engineers • Third Party Intervention • Indemnity and Fraud

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Modern Claims 61



Has the industry changed drastically since you started working in it? It certainly has. I started doing personal injury litigation in the early 1990s, when claims were funded either by legal aid, by trade unions, or through before the event legal expenses insurance. For anyone who couldn’t fund their claims through any of these methods, bringing a personal injury claim was simply unaffordable until 1995 when the first set of CFA regulations were introduced, although of course the major sea-change in funding came into place in 2000 when the Access to Justice Act 1999 in effect plugged CFAs into the hole left by the withdrawal of legal aid for personal injury claims. And the pace of change on the funding side seems to have increased exponentially ever since.   The other major change has been in the tightening up of the litigation process in the courts. When I started doing this work the only date you really had to worry about was the expiry of limitation, and provided you got your writ (as it generally was in those days when most PI litigation was in the High Court) issued within three years you didn’t have to worry greatly about the court process, unless it was one of the few cases that had to go to trial. Order 17, rule 11 of the County Court Rules enabling the court to strike out claims that solicitors did not set down for trial promptly, and subsequently the introduction of the pre-action protocols and active case management by the courts through the Civil Procedure Rules, brought about a massive change in the nature of the job.


What has been the key positive or negative impact of change in your area of the market? Of the two elements mentioned in response to question one, the introduction of CFAs with full recovery of additional liabilities was hugely beneficial to personal injury claimants, not only for the obvious reason that it meant they could keep 100% of their damages and be protected against adverse costs, but because it was a regime that enabled lawyers to take on meritorious but difficult cases because the higher success fees recoverable in these cases justified the risk of losing and recovering nothing, and because across the board you could afford to lose a few cases. One of the things that worries me about the current fixed fee regime is that it is difficult for lawyers to justify taking on difficult cases that they are likely to have to fight all the way to trial, and may lose, because doing this can make the business unprofitable.

The other major change has been in the tightening up of the litigation process in the courts On the tighter case management that has resulted from the changes in court rules, I don’t think there is any doubt that on balance it has been beneficial in improving the way PI lawyers manage their caseloads and means that claims are dealt with more efficiently and professionally, and are generally settled earlier. Who inspires you and why?


Not sure I can answer that since the word “inspires” suggests some action on my part in terms of emulating the person doing the inspiring. There are many people I admire, ranging from Mandela and Ghandi to my predecessors in the MASS chair role, but I don’t think I could claim to have lived up to the example set by any of them! Have you had/got a mentor? If so, what was the most valuable piece of advice they gave you? Not a mentor as such but when I started doing PI I worked with a young woman who had been trained by old-school PI lawyers. Her advice was always along the lines that you should make it easier for the other side to settle the claim than move it on. Ask them difficult questions and generally be a pain in the neck so that they want to get rid of you.   If you were not in your current position, what would you be doing? I would probably still be working at the National Theatre. I had a lovely job there, running the Green Room (the backstage bar), which essentially involved spending my days chatting to actors, writers, musicians and other people involved in both the technical and creative side of putting on plays. I reached a point where I felt that if I did not leave I would become completely institutionalised and spend the rest of my life there. My customers and colleagues were a little bewildered when I announced an intention to leave and become a solicitor. 


Susan Brown is Director at ProLegal and Chair of Motor Accident Solicitors Society (MASS).

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62 Modern Claims

May 2016

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Modern Claims Magazine Issue 19  

Modern Claims brings you all the latest news from the Claims Industry, with a newer, fresher and more modernised look! Happier reading with...