The Woolf reforms introduced pre-action protocols to speed up claims settlements, but to comply the insurance industry needs a much more open system of claims handling. Richard Blaker reports
Nearly three years after the Woolf reforms were introduced to streamline the civil claims process, insurers, lawyers, businesses and insurance brokers are coming to grips with pre-action protocols.
These aim at better communication between parties in a case and at achieving a position where they may be able to settle without litigation. It also sets time limits and procedures for exchanging information.
Earlier and better investigations into claims have helped insurers to make quicker decisions on liability and, therefore, the number of pre-litigation settlements has increased. Brokers, too, have a bigger role in the process.
As soon as a claim is made the defendant's insurers need to receive and respond to the letter of claim within 21 days and the insurer needs to complete investigations into that claim within three months from its acknowledgement.
Potential delays
If an insurer fails to meet the protocol deadlines, opportunities to discuss liability and quantum with a claimant may be missed. The claimant may take that opportunity to commence legal proceedings and there is the risk of the insurer having to pay greater legal costs.
The policyholder needs to be aware of how important it is to forward the letter of claim immediately, to avoid potential delays, and brokers need to make sure their clients know what to do with that letter of claim.
Brokers could also help clients by ensuring that following an accident the policyholder provides full details of the accident circumstances in order that the insurance company can start their own investigations and for the policyholders themselves to start gathering the necessary information.
The protocols also provide more detailed information regarding more specific workplace type injuries, where particular operations or occupations are involved.
When claims are being investigated the insurer or its agent needs as much information as possible in order to consider the claims. Policyholders can assist by ensuring all information and evidence, which will be relevant to the investigation is available.
If it becomes apparent that certain documents, which may be necessary to investigate a claim or to deny liability have not been kept or were not prepared by a policyholder, difficulties may arise. All businesses should ensure that essential documents and records are properly kept and maintained, including such items as records of training courses, wage records and health and safety information.
For example, an employer may have documentation relating to the assessment of a risk such as manual handling. If the employer can prove that measures had been taken to minimise the risk to an employee, it would help the insurer to complete his investigations within the relevant period and to make a reasoned decision on liability.
Employers should have maintained such documents for many years, but Woolf provides for certain documentation to be delivered within the relevant time frame, and this is critical. Brokers and their clients should ensure they are aware of the necessary documents to retain and complete and that they must remain accessible.
It is useful to have a single contact at a company when carrying out an investigation, although businesses often fail to nominate someone responsible for carrying out this essential role. It will be necessary to determine where the accident report book and work records are kept. It is also vital to have details of the accident circumstances. Although obvious, some policyholders may find these fundamental questions difficult to answer.
Brokers can assist by encouraging clients to make someone in the company responsible for this and make sure he or she has access to the information when required. Insurers will often find it preferable to deal with the policyholder direct as the claim progresses, while keeping the broker informed at all stages.
Signed statements
Witnesses are a critical element in the investigation of a claim. Getting a witness to record what he saw immediately after an accident and obtaining signed statements is an essential part of the claims process. Where possible, companies should have a system of being able to trace witnesses if they have moved to other jobs, as a claim may be pursued many years after the accident occurred.
Non-compliance with Woolf's Pre-Action Protocols can lead to unnecessary delay, increased costs and prejudice the investigation of liability. It can also impact on the subsequent handling of the litigation. Many judges will take a dim view of non-compliance and deny requests for extensions. n
By Richard Blaker is claims manager, Norwich Union Insurance
How clients can help brokers
