Late Notified Claims under Lockdown
With insurers seeing an increase in Late Notified Claims since lockdown, Counter-Fraud Partner Ben Leech takes a look at key considerations for detecting fraudulent LNCs.
For many a spike in LNCs has been an expected consequence of lockdown. As detailed by Damian Ward recently, claimant solicitors and claims management companies are reviewing their back catalogue of cases to make up a shortfall with so many vehicles effectively off the road for months.
With this in mind, and given the financial pressures many are now facing, LNCs submitted during the lockdown period demand robust scrutiny, ensuring fraud isn’t overlooked whilst also helping negate time wasted on false positives.
Types of lockdown LNC
Lockdown LNCs can be differentiated broadly into three categories:
- Recycled Claims Notification Forms
Claims that have previously been submitted only to be resubmitted by a completely new firm.
- Previously Dormant Claims
Cases which may have been repudiated or presumed abandoned, but have received a new injection of vigour during lockdown.
- New claims
Fresh cases which either surfaced previously but failed to fully materialise into a claim or have not previously seen the light of day.
After recognising the type of LNC you’re dealing with, a strong response and consistent strategy is necessary.
As always, claimant motivation can be a key indicator. There’s no doubt such claims have been easier to farm during the lockdown period, with potential claimants sat at home and more likely to answer cold calls, texts and emails, translating into greater conversion rates. Let’s not forget that the relaxation of remote medical examinations also aids the claims process, making it much smoother and less labour intensive for the claimant.
The different types of LNC (recycled, dormant or new) also provide us with some insight, generally demonstrating a lack of motivation in the claimant, which is likely to impact the likelihood of them seeking medical attention following the accident. Not seeking such treatment makes it far more difficult for the claimant to discharge their legal and evidential burden to prove they sustained any injury.
A recycled claim begs the question as to why the claimant needed to instruct numerous firms, with the obvious conclusion being that the route to market is clearly via farming. A dormant claim is the perfect example of an unmotivated claimant who has not pursued a claim with any vigour and is unlikely to want to attend court. Meanwhile, a new claim which suffered a false start suggests both a lack of motivation and the likelihood of no injury or treatment being sought.
Given this insight, we can then look to challenge such claims and ensure they are fully validated, with the appropriate evidence either being sought or identified as absent. Breaking the chain can be key here too - an appropriate level of disruption can potentially drive a wedge between claimant and solicitor.
Beyond this, a sensible tactic would be to seek a signed mandate from the claimant themselves along with proof of identification. With recycled or new claims, requesting sight of the written authorisation to submit the CNF is legitimate. Direct approaches to check the claimant has instructed relevant firms can also be undertaken. In previously dormant claims, it is perfectly reasonable to seek confirmation of instruction.
Similar to tackling a non-lockdown LNC, contacting the claimant’s own insurance company regarding FNOL would be of great value, whilst social media is also a key consideration. Having been in lockdown and looking to pass the time, it is likely many people will have been posting regularly on a variety of platforms, providing a useful insight into the truth of any alleged injury.
Outside of claimant behaviour, ongoing identification of claimant firms can provide a valuable insight into how they operate and are bringing LNCs to market. Whilst any nervousness about false positives is understandable, a robust and consistent KYO strategy is required to break the chain.
In terms of intervention, if not dropped from the Portal immediately, claims ought to be flagged at Stage 2 for further validation and, if concerns remain, the admission of causation can be withdrawn and the claim challenged.
The need by some claimant representatives to convert dormant claims into cash as a result of the huge reduction in new claims notifications means that more than ever, claims farming and recycling of dormant claims (even where limitation is approaching or has passed) is a real threat.
The concurrent economic pressures felt by many is also assisting with conversion rates of claims which have previously hit the buffers, as some claimant’s motivations have changed.
However, as always, robust handling is vital. Whilst we have seen low-balling of offers, which may be superficially attractive, the key to defeating such activity in the medium to long term is strong and consistent early handling. This means taking the claimant and their representatives to task and continuing to disrupt activity and disengage claimants from the process when the early promise of cash is not realised.