Colin Poole has been an opportunist since the time he conceived the idea of Claims Direct five years ago. You will recall at that time they charged innocent victims 35.25% of the claim (30% plus VAT), as they still do in Scotland. The only reason they changed from this contingency fee to a premium of around £1,300 was because the 1989 Access to Justice Act allowed after the event (ATE) premiums to be recovered – their contingency fee of 35.25% could not be recovered under this act.

Claims Direct clients have accordingly received less than two-thirds of what they could otherwise have received, had they recovered in full using other funding options instead of Claims Direct.

Poole has exploited the ignorance of the public, which does not appreciate that many solicitors make no deduction from the claim. If the claim is successful, whether they have litigated or not, the third-party insurers pay the solicitors' fees over and above the principal sum. However. the public thinks UK solicitors act on the same basis as lawyers in the US (who do take a percentage of the claim) and it is on the basis of this ignorance that Claims Direct has been successful. No one in their right mind would choose to have 35.25% of their claim deducted if the other funding alternatives, which might require no deduction whatsoever, had been properly explained by either the Claims Direct representative or the Claims Direct panel solicitor.

But some blame must be shared by the solicitors on the Claims Direct panel. On the basis that you do not bite the hand that feeds you, my experience is that these solicitors, having been signed up with Claims Direct, are not advising their clients of the alternative cheaper funding options.

As I understand it, there is a requirement in England for solicitors to do so, although it is to the shame of the Law Society in Scotland that there is no such requirement there. The council of this Law Society decided that an innocent victim does not require to expect such advice from his professional adviser. Such a decision plays into the hands of Claims Direct and the solicitors who feed off them.

The Motor Accident Solicitors Society (MASS) passed a motion at its AGM three years ago that its members who involved themselves with contingency fee companies that take a percentage of the award should be “deplored”. However, having passed that motion, the then president, David Pinto, later went out and acquired himself some contingency fee business.

Accordingly, Colin Poole is most certainly an opportunist, but the responsibility for Claims Direct's “success” must predominately lie with those who profit from it and fail to tell their clients of the cheaper funding options available at the point where the innocent victim is vulnerable to the overtures of Claims Direct.
Euan B Campbell
Buchanan Campbell Saunders

Look closer to home
I am a recent subscriber to your publication and, in a bid to depart from the tales of doom and gloom following the demise of Independent Insurance, feel this is the appropriate forum to tell insurers to take notice of how shockingly their claims departments perform.

It is to my amazement that, during the past five years of dealing solely with road traffic accident (RTA) work, I notice the perpetual bleating of the insurers about average claims costs escalating. Granted, insurers have been landed with several additional liabilities in recent years, but I feel insurers need to look a little closer to home in order to create savings on the average claim cost.

The staff in many claims departments are deluded souls who are overworked, underpaid and have no confidence in their employer providing job security. Many staff are untrained in technical areas because of the escalation of call centres, where staff are trained to perform to call-quality standards rather than actual technical knowledge. This is one of the major problems insurers face. They employ a school-leaver, train them how to answer the phone and then set them targets of how many messages they should take in the day. The call gets dealt with, but the issue does not. The new employee gains no technical knowledge, gets bored and goes and works in the nearby call centre for a bank – and the process repeats itself.

From my experience of dealing with all of the major general insurers on a day-to-day basis, insurers need to sit up and listen to the grumbles of their staff.

With the exception of Direct Line and Privilege, the rest should hang their heads in shame. These two are the only insurers that deal with claims expeditiously and value them correctly. (I do not direct this criticism at claims staff – they are doing the best they can.)

I have yet to deal with an insurer (with the exception of the above) that has a properly-staffed claims department. The fact is, the staff are often simply “fire-fighting” the work load. As a result of this, it usually takes several chase-up letters or telephone calls before any sort of response is made. If an offer for personal injury is made, then it is usually inadequate, either because the file handler has not been properly trained, or the colossus has told the claims handler what to offer.

All of this leads to double the amount of correspondence and telephone calls on our behalf, which then amounts to a large bill of costs being presented for payment. We are then accused of embarking on a cost-building exercise. We are two opposed professions that have to co-exist for the benefit of clients and policyholders alike. Until there are some vast improvements in the way insurers staff their claims department, they don't have a hope of reducing their claims costs. Bums on seats may cost more money, but offset that against the ever increasing average claims costs and

I am sure savings can be made.

Until that happens, all I can say to individuals considering a career in RTA claimant work is “come on in, the water's lovely”.
Lee Jones
Corries Solicitors

In the doldrums
I disagree with Reg Brown's views (Letters, Insurance Times, August 16). I still believe the Lloyd's Market's underwriters are average only and, in several cases, poor quality. Few underwriters (I speak for marine cargo underwriters only) actually take the time to fully read slips my brokers present to them. And with surveys, they often only skim through the contents, only really reading the recommendations at the end. It is no wonder their results are invariably poor and that the cargo market is still in the doldrums.

Equally, market manipulation is taking place that should be exposed – the market is still renewing and underwriting loss-making facultative obligatory treaties and binding authorities because of pressure brought on them by working Names to the syndicates. Surely a Chinese Wall should be in operation on such placements? Should not the syndicates refuse to accept broking risks to them where they know that broker to be a Name of the same syndicate? This is exactly the insider dealing which brings the market into disrepute.
Alan Bavin
Managing director
Marine division
ARB International

A glass act
Well done to Mike Williams for getting full replacement value for his spectacles after initially being offered only 50%.

One has to wonder if an insured with Norwich Union Direct would have got the same result without the intervention of a broker?
Name and address withheld