Jackson: An update (continued)

Industry de-regulating means that fertile ground has been prepared for several rounds of satellite litigation – we are bound to see an increase in cases where parties from both sides look to the courts for clarification on what ‘devil lies in the detail’.

What about a casualty claims handling point of view? Again, lots still to be worked through, but in the spirit of ‘food for thought’, and having had discussions with a number of commercial organisations, here are some issues to look out for:

Contributory negligence – this has always been a sensitive issue for defendants. We know from experience that very often accidents happen as a result, in part at least, of a failure to heed training, corner-cutting and/or deliberate ignoring of specific instructions and it’s important for employers in particular to have some record of the fact that the claimant bore at least some responsibility.

We know that claims will no longer continue under the Portal where defendants make admissions of liability but allege contributory negligence. We do have to query therefore, whether in the majority of cases it would ever, from a commercial standpoint at least, be worth alleging, certainly modest contributory negligence, when one balances the potential saving against the increased cost of the case dropping out?

The commercial benefit of arguing ‘contrib’ is more to the fore and we think that, at the very least, customers and insurers should be talking to each other to understand and agree their ‘policy’ for dealing with these cases. Hopefully this will help avoid misunderstanding, confusion and/or any potential disagreement after the accident has happened.

Causation - we know that cases will drop out of the Portal where a defendant does not admit liability.

A quick reminder; liability has its four constituent parts of duty;– breach, causation and foreseeability, which underpins all stages. In some cases, it has been a legitimate and necessary tactic for defendants to concede a breach of duty pending receipt of further information, usually medical evidence. On the basis that an admission of breach is not the same as an admission of liability, these cases will drop out of the Portal and incur increased costs, so take care

It is also left to the claimant’s medical expert to determine which medical records are ‘relevant’

to the claim and they must deal with these in any report – query from past experience whether we could safely rely on the typical claimant’s expert’s view of what records might be relevant to say a claimant’s date of knowledge for limitation purposes?

Or do we have enough faith in them to determine those records relevant to say the accident circumstances, or any pre-existing medical conditions, both of which may be relevant to how a defendant might chose to address the whole issue of liability.

The point we seek to make is here two-fold; (i) flag the issue; and (ii) impress the need on those dealing with claims to start thinking now about what strategies we can deploy to avoid unnecessary increase in costs.

Reserving/valuation - So, defendants will not see a medical report until ‘stage 2’, by which time, by way of reminder, we have already admitted liability. Consider how, in a typical EL case, we will usually have an idea what sort of injury we are dealing with and so can make a reasonable estimate of what we might be looking at in terms of damages, and in some cases tailor our strategy accordingly – but still perhaps not enough make a firm decision on liability.

What about PL cases? As far as the nature and severity of injury is concerned, we are likely to know even less.

So, defendants face the very real possibility of either (i) not admitting until the medical is received, in which case the case will drop out of the Portal and incur increased costs, or (ii) backtracking from an admission should medical evidence come in to take the claim to a whole new level.

Would claimants be mischievous enough to push cases they suspect or know to be worth more that £25k (the Portal limit) so as to secure an admission only to then disclose their medical exposing the true value in the hope that defendants lose their appetite for backtracking from their admission?

Third party involvement - thinking about PL claims in particular, where very often we are dealing with accidents on premises involving managing agents and the like, it may be possible to deny liability on the basis that the accident was somebody else’s fault.

Defendants will need to be very sure of their position, and very quickly, to make that call otherwise they will again run the risk of claims falling outside the Portal.

Of course defendants sometimes have the option of dealing with the claim and seeking an indemnity later on but that may not always be all that desirable.

Seize the Initiative! There is always a tendency to concentrate on the negative, the pitfalls and all the potential bad news, but Jackson will bring plenty of opportunities for the well prepared.

A brief closing observation to that end; the current Portal CNF does not demand much information from claimants so, if we assume this will be the same for EL and PL, their representatives may do the bare minimum - which will give defendants the opportunity (albeit in a relatively short timescale) to gather plenty of evidence to present their most robust position and maybe make claimants think twice. Put another way, the Portal provides a window of opportunity to ‘seize the initiative’.

So, just some thoughts after a few reads of what the Government has produced so far and the only things we know with any certainty are:-

Things are going to change!

Defendants will have to investigate and respond to allegations more quickly and more thoroughly. The systems and processes we will all have to have in place to deal with claims need to be slick and robust.

We know that investigation time lines will be tight and you will be looking now at how you can best collate information and documents to give you and your representatives the best chance of making the right, timely decision. Full, comprehensive, early notification, investigation procedures and process are going to be more important than ever.

There are strategic, policy and tactical decisions to make now as far as how insurers and their customers want their representatives to represent them in this new world and early dialogue is as vital as ever. So, if that dialogue has not kicked off already make sure you start now - it’s good to talk!