Multi-award winning LNC strategy sheds light on key issues
Fraud Aware 5
The Keoghs Late Notified Claims team celebrated a double victory recently after winning ‘Claims Initiative of the Year’ at the British Insurance Awards and ‘Independant Fraud Investigation Team of the Year’ at the Insurance Fraud Awards. Following this success, and given recent data revealed by the Fraud Index, Ben Leech who heads up the team, discusses what can be learnt from Keoghs’ robust, award winning approach.
There was a definite anticipation with the introduction of The Legal Aid, Sentencing and Punishment of Offenders Act 2012 (“LASPO”), that the “£400 club” brought about by the MOJ Portal would be closed down for good.
However, the banning of referral fees and the introduction of Qualified One Way Costs Shifting (QOCS) has seen a significant increase in Late Notified Claims (LNC). Typically such claims arise out of minor road traffic accidents where the vehicle damage is resolved quickly between the parties but after a passage of time (sometimes almost three years) a claim for personal injury is intimated.
The ban on referral fees has resulted in a significant increase in cold calling and nuisance text messages seeking to persuade individuals to claim personal injury following such minor accidents. In some cases, the cold caller will inform the claimant that the money has been set aside and is theirs to claim regardless of injury. They may be told that they are a ‘Category C’ individual entitled to compensation for the inconvenience caused by the accident. In this regard the QOCS regime provides a zero risk opportunity for abusive claims farmers and solicitors. The claimant can intimate their claim arising from a genuine accident, issue proceedings and subsequently discontinue, safe in the knowledge that there would be no costs consequences unless the claim was fundamentally dishonest.
This new regime not only resulted in a significant increase in Late Notified Claims but a more insidious practice of ‘data phishing’, with individuals seeking to obtain strings of claims data to be sold on.
In light of this significant problem, Keoghs sought to devise a robust strategy which could be implemented by insurers, allowing them to tackle the issues head on. It’s vital that we understand the true nature of these claims, allowing us to identify those which can be correctly challenged. This process of identification, led by known intelligence of how such claims were brought to market and aligned with certain key indicators (not exclusively led by the age of the claim), allows insurers to avoid disputing the wrong claims thus adversely increasing indemnity spend.
Once identified, it is imperative that two key questioned are answered.
- Is the claimant providing proactive instructions?
- Is the claimant able to satisfy the court on the balance of probabilities that an injury has been sustained as alleged?
Keoghs has developed a triage process which provides answers quickly and within MOJ Portal timeframes, ensuring that any false positives identified can be retained in the Portal, avoiding a negative impact on indemnity spend.
Whilst it may become clear that a claimant is providing initial instructions, this is certainly not the same as preparing to attend a final hearing and being subjected to rigorous cross examination. By providing a consistent and strong message to the market that each case will be defended to court, claimants and their representatives will think twice before submitting further claims. Indeed, insurers who have adopted this approach have reported a significant fall in the number of LNC presented to them and more importantly have seen a huge number of such claims dropped prior to litigation.
As part of Keoghs’ triage process, a body of evidence is collated to demonstrate that there is no objective contemporaneous evidence suggesting that the claimant has sustained injury. This may be based on a claim chronology which demonstrates that there was no reported injury at FNOL or when attending the GP. Conversely, objective evidence may be obtained showing that an injury was not sustained, be it in the form of a call recording in which the claimant denies being injured in the accident, or post-accident attendances at the GP in which there is no mention of the index accident. vehicle at the time of ttackle these abusive market behaviours head on and ensure that only those genuinely injured from genuine accidents receive compensation.