Insurers should force their solicitors to use mediation to resolve disputes or kick them off their panel, the Centre for Dispute Resolution has demanded.
"Insurers who want to do ADR (alternative dispute resolution) should require it from their solicitors, and solicitors should not be able to say no," Tony Allen, CEDR's assistant director told an audience of insurers and solicitors in London last week.
"Insurers should say this is the way we want to run our business, and if you dont comply, you wont get our business," he said.
Allen claimed that the Woolf reforms were piling pressure on all sides to mediate.
He said: "Judges are showing signs that they will make it unpleasant for those who don't comply with requests for mediation. The courts will slap people on the wrists if they don't comply."
Jane Andrewartha, a partner with law firm Clyde & co, told the meeting that even within law firms some solicitors still refused to use mediation, fearing it eroded the solicitors traditional adversarial skills.
"There is patchy support among lawyers. Within the law firms there are individuals who support ADR but they don't necessarily have influence, or even support their colleagues. Dissent in law firms is unusual," she said.
Alan Gore, personal injury technical claims manager with Norwich Union, said mediation should be done immediately – even at the injured's bedside.
He said mediation could even resolve early, smaller disputes, such as over the best course of treatment for an injury victim.
And he insisted it worked. "I have never been in a court where I had met the claimant first," he said. "The key to resolving claims is when the claimant is there and I am there, not the lawyers."
CEDR's Allen agreed it should be high on the priority list: "Get a mediator in on day three." NU and CEDR are piloting a scheme where the insurer offers mediation in its initial response letter to every claim.
But there were concerns that reinsurers might refuse to pay out on claims settled through mediation, claiming they only had to pay out if the court had made a ruling.
"Reinsurance is an area where difficult legal precedents present problems," said Andrewartha. And Gore said: "Insurers with low retention could find themselves in trouble with reinsurers."
As well as reinsurers, Paul Bennett, claims manager at Lloyds underwriter Wellington, said underwriters and others need to understand the benefits of mediation. "We have had a number of in-house presentations to educate the underwriters about mediation – as they might become involved," he said.