Airmic's Peter Berring makes a valid point that 60% of all UK employers' liability premiums are made up of legal expenses.
There are a number of key drivers influencing Berring's point: the questionable manner in which some law firms manage their time; the increasing use of referral fees by lawyers to win business, and the growth of the after-the-event (ATE) market for legal expenses cover.
In terms of finding solutions to the issue, I believe that, as a profession, we need to take a much more proactive approach to the triaging of EL claims. Making an early identification of those incidents in which rehabilitation can assist will reduce indemnity spend and even possibly prevent the claim from being pursued.
The problem lies with the timescale between an incident and its notification to the insurer. Major composites report that this can take six to nine months on average, preventing them from getting involved in the critical early stages.
Another option might be the provision of free legal expense cover to third parties after an incident that mitigates the affect of ATE premiums and success fees.
Watch this space.
Tim Roberts
Senior partner
Plexus Law
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