Neil Harris of Broker Direct explains how attack is the best form of defence following the Woolf reforms to the legal systems.
Woolf ushered in new Rules, Practice Directions, Protocols and judicial powers: a cocktail of changes intended to transform dispute resolution and claims settlement and to deliver potentially far-reaching benefits ("the Overriding Objectives").
Six months on, we are all busy reviewing the changes that have taken place, considering what lies in store and how we should prepare for it and recognising the changes that may not be achieved despite Woolf.
I was asked recently how insurers categorised solicitors who acted for claimants.
A solicitor friend of mine has a very simple classification, which you may have heard before: "There are solicitors who work for their clients, and there are solicitors who work for themselves."
I choose to be a little more specific.
It pays to know and understand where the other side is coming from and to prepare and adapt accordingly. What this analysis suggests is that there are some legal advisers and litigators on the claimants' side who are already wedded to an open, pro-active settlement process.
The spirit not the letter
With these it should become possible for insurers to agree refined and expanded Protocols, which import more of the spirit of Woolf into claims dealings than the letter of the Civil Justice Reforms imposes.
For example, immediate advice of a potential claim and rehabilitation assessment processes, including funding and agreed experts lists, could all become subject to detailed working agreements.
There are other solicitors to whom such concepts are anathema.
With these solicitors, insurers have to build into their claims handling the steps necessary to support positive pleading of non-complaint practice as an active damages/costs limitation strategy.
Where Woolf has made a difference is that once these solicitors set the clock ticking the subsequent timescales are now pre-ordained and out of their hands.
The problem is that they are under no pressure to set the clock ticking.
Woolf failed to address this issue and, as a result, his reforms will not of themselves deliver the "Overriding Objectives", even with the assistance of the judiciary.
Although more claims are being settled without proceedings, still more claims are being delayed. Whatever pattern emerges finally, it will not be a pattern of immediate notice of claim and rapid, meaningful engagement thereafter.
The proliferation of relatively minor nuisance, exaggerated and even totally fraudulent claims has caused some insurers to develop two-pronged, pro-active strategies: on the one hand, to seek to engage swiftly with claimants who will discuss, negotiate and settle without unnecessary ado; on the other hand, to communicate the obligations upon third parties and the limitations of their entitlement to compensation to those claimants who will neither engage nor co-operate and whose approach is to profit out of their misfortune.
Insurers have had to promote and incentivise claim notification by policyholders so that they can anticipate the moment when claimants start the clock ticking.
Educating brokers, setting up freephone claim lines, putting in place electronic reporting procedures with major clients and emphasising policy conditions all help put the insurer on notice at the earliest possible stage. However, insurers must grasp the nettle.
It is a fact that most policyholders will not appreciate or will play down the possibility of a third party claim in the first instance.
It often requires quite an effort, by a skilful claims handler, to obtain a full and accurate picture from that first advice: a picture that will prove to have been reliable in terms of what happened, to whom, in what circumstances and with what consequences.
Half a picture can lead to no action or to over-reaction, either of which is likely to lead to overspend in the final analysis.
So the disciplines of inquiry and of follow-up have to be pursued rigorously and expertly to determine what action is required.
This has posed a resourcing challenge which not every insurer has recognised, let alone met satisfactorily. Many struggled in the pre-Woolf environment, where they had endless time to attempt to recover from errors and omissions perpetrated in the period prior to receiving a claim.
Post-Woolf they are stuffed whenever they receive a well-presented Letter of Claim from a claimant's solicitor who has already prepared the case. There are tactics which can be used (for example, in relation to unsanctioned medical reports and evidence which is inconsistent or lacks persuasion), but in the absence of hard contradictory evidence on a defence file which has just been opened, the insurers have nowhere to go.
It may also be instructive to speculate about how claimants' solicitors might categorise the insurers against whom they act.
There are insurers and insurance practitioners of every persuasion.
Perhaps more significant are the inconsistencies across the insurance sector and within individual companies: inconsistencies in attitude and in execution.
At case level, too, handling can vary according to the circumstances of the claim and the situation of the defendants.
Pressure on resources and bureaucratic decision processes conspire all too frequently to thwart the claims manager.
It has always been good practice to take
a view at an early stage of liability specifically and quantum generally and to plan the subsequent handling of the claim on this basis.
Wherever there are likely to be issues between the parties, it is important to secure the evidence that underpins your own view or undermines the other side's.
Evidence that will be lost or will go stale must be captured early on.
Having said that, delays or ineffectual claims handling were commonplace, in part because generalised pleadings and extendable timescales allowed the parties and in particular the defence the opportunity to cobble together something before trial.
Discovery, too, could be abused to compensate for lack of effective investigation.
The Woolf changes have demolished these safety nets for the dilatory defendant.
Any case to be made has to be made within the timescales and must be based on the evidence which will be adduced on the issues on which the claim will turn.
If the evidence is not there it cannot be used and the case cannot be made.
There is no sign that judges or litigants are inclined to be flexible on this point.
It is important that any expert is instructed specifically in relation to the issues upon which the case will turn. Before agreeing to Joint Instructions, defendants should make it a condition that those Instructions incorporate their specific requirements.
This conditional acceptance should be put in writing, so that if the other side objects and the defence is forced to appoint its own expert, this becomes a costs issue raised before the Court.
Another innovation with which we are now grappling is the entitlement to serve questions upon the expert in relation to his report.
Questions of "clarification" are permitted and I have heard it said that this does not extend to cross-examination of the expert in writing.
I submit that if the report is not clear upon precisely what act or omission caused the damage, upon why this should be considered negligent, upon the facts which led the expert to his conclusion and upon the evidence of those facts then precise questions about these points are questions of "clarification".
Defendants can now come under early pressure on receipt of an Offer to Settle. They can apply pressure in the same way. But it is impossible to position yourself securely in relation to Offers to Settle without a sound view of the case.
Gathering that evidence, sufficient to take an early view of the claim upon which you may well have to found your settlement, is now a critical success factor.