Former Independent claims manager questioned on reserving
The prosecution called another key witness, former Independent group claims manager Patricia Clarkson, in the trial of three former Independent directors,
The focus remained on a series of notes and memos distributed between Clarkson and other senior managers at Independent.
In one letter that Clarkson wrote to former assistant general manager Stuart Pettet, she said that action was needed to reduce the levels of reserving illustrated by the gross case development (GCD) reports.
According to the prosecution, statistics from the GCD reports were used to persuade claims handlers to lower their estimates on certain cases.
This, said the prosecution, despite the fact that claims managers generally believed over reserving wasn’t a serious problem.
When she was asked whether or not this was discussed with former company chairman Michael Bright, Clarkson said: “I only remember talking to Pettet about it.”
The results, she said, were designed to make it harder for Bright to prove that over reserving was happening.
“I don’t understand why we sought permission from Lomas
Patricia Clarkson, former Independent group claims manager
Clarkson also said that closed files were kept in pending so that savings were recorded even though the claim had already been settled. And that claims were managed to find savings and deficits at the same time so that the effect was offset.
Prosecutor Andrew Baillie QC also referred to a meeting between Clarkson and former Independent deputy managing director Philip Condon in which permission was sought from former Independent finance director Dennis Lomas to move a 16 month old claim from the whiteboard onto the company’s computer systems.
“I don’t understand why we sought permission from Lomas,” said Clarkson.
The prosecution said that in August 2000 the value of claims on the whiteboard totalled approximately £16m.
All three former Independent directors deny charges of conspiracy to defraud.
The trial continues.
