Insurer backs non-litigation cost benefits as study reveals 90% success rate
The cost benefits of using mediation to settle claims are now proven, Allianz Cornhill has said.
The insurer said it had completed a pioneering study of the use of mediation to settle injury claims. It is now calling on claimants to consider mediation as opposed to litigation.
Tony Newman, Allianz Cornhill's claims controller, launched the company's mediation programme a year ago. He said: "We've had a success rate of over 90%. Claimants who have been through the process say they like it because they retain control, it's non-adversarial and therefore less stressful - you achieve settlements far quicker."
He said insurers also made savings, but would not be drawn on details, since he argued that this would give lawyers ammunition.
He added: "Some lawyers remain the stumbling block. We need to refocus them and as part of our protocol, those on our panel are now required to offer mediation where relevant."
Newman said take-up of mediation remains too low.
"Around two thirds of those eligible for mediation refuse. It's likely they are told not to do so by their lawyers."
New rules set to boost mediation use
Insurers' efforts to use mediation in personal injury claims are set to receive a boost with the introduction of new civil procedure rules on mediation in October.
The Department of Constitutional Affairs is drafting an amendment to the Personal Injury Pre-Action Protocol which will put greater emphasis on parties to use mediation as a way of settling personal injury claims without a trial.
Judges will also be allowed to impose adverse court orders on claimants who refuse to consider mediation or other forms of alternative dispute resolution (ADR).
Mediation is often preferable for insurers because it cuts out expensive legal fees and can lead to quicker claims resolution.
AXA claims director David Williams said: "This is a step in the right direction, but much still needs to be done to find really cost-effective forms of ADR."