At the end of July 2013 the UK Government is extending the existing electronic Road Traffic Accident (RTA) claims portal in England and Wales to include employers’ liability (EL) and public liability (PL) claims valued up to £25,000.
The intention is that extension of the Claims Portal will lead to shorter response times, condensed negotiation and the need for stringent claims management controls in order to benefit from the potential cost savings.
For all parties there will be a need to have robust claims management processes in place to hit new strict reporting deadlines. At a Ministry of Justice (MoJ) seminar at law firm Hill Dickinson LLP in March 2013, 86% of the audience voted that the reforms will reduce the cost of EL and PL claims. This is because, if the claim is brought through the claims portal and remains in, the defendant will only pay fixed costs to their opponent.
The Claimant’s Quest
However, how claimants and their legal representatives identify the defendant’s claims handlers is one issue that needs to be considered. Even with compulsory insurance lines (e.g. EL) insurance programme structures vary and claims handling options are numerous.
The answer lies in the registration on the claims portal. Getting the method of registration right was always going to be a challenge. As this article is being written, we are 4 weeks away from the portal ‘go live’ date, and it remains unclear as to how a retailer with several trading names and who trades out of numerous locations can register on the portal in a way that makes it easy for the claimant to find the correct handler. Add to this the fact that retailers with franchise agreements will have some locations in one insurance programme and others in a different arrangement, it becomes apparent that searching who to register a claim with can be a problem.
A focus point for international claims and third party administration (TPA) company, Gallagher Bassett International, at their recent MoJ workshops, has been the problem the new protocols create over the need for organisations to increase visibility for claims related matters. It is likely that enquiries will be made at store locations or via “customer help lines” so it becomes necessary to ensure all staff are trained to handle claim notification form (CNF) enquiries. The portal company’s guidance notes on registration do not sit well with many organisations. For example, companies with high deductibles may handle some claims in-house and delegate others to a TPA or an insurer. As above, other companies may trade under a variety of names, or have franchise agreements that do not cover all their sites. The solution could be to register as a compensator and then administer the receipt of the new CNFs. Or you could opt for a third party to handle this administration for you. To me this suggests there is a burden of pure administration that sits rather heavily with the defendant.
Internal Communication is Critical
A key challenge for the new procedures will centre around the communication of the reforms internally by (defendant) organisations to ensure CNFs received can be correctly directed to the appropriate desk. Timely replies to enquiries made by the claims handlers are also required so the new truncated liability decision deadlines can be met. So if you are retailer with numerous trading locations, or maybe you split your claims across a number of handlers, what do you do?
Under the new protocols the claimant representatives have a duty to make “reasonable attempts” to establish the identity of an insurer or handler. Some law firms believe that as there are no clear definitions, there is likely to be an increase in satellite litigation as arguments are made as to what constitutes a ’reasonable attempt’. This could be costly and potentially defeat the overriding objective of the reforms.
To help the claimants search, organisations (aka defendants) may wish to consider:
- staff training to enable employees to understand the CNF process
- internal communications and updates in relation to the Claims Portal changes
- amending corporate websites to include contact details for CNF enquiries
Searching for the Right Information
Another solution to the registration issue could be that insureds (organisations/defendants) add all their brand names to the search engine of the Portal. This approach however could raise further confusion when you consider
- the database is not designed as a search tool
- the registration of a number of company names in a variety of styles will do nothing but over complicate the process
At a recent meeting with Claims Portal Limited it was debated that a separate ‘search’ database is created to permit claimants to search for the correct party to serve the CNF upon.
This sounds like a reasonable solution to the problem in a world where there is no equivalent to the Motor Insurance Database (MID) for PL matters and currently a limited search facility on the Employers Liability Tracing Office (ELTO) database. However, this database doesn’t currently exist and will need managing, and then there would be the problem of consolidating the existing registrations on the portal database.
So, is it a disaster for defendants if cases fall outside the claims portal? It’s not ideal, but there will be cases that drop out of the claims portal or never make it in, for these the new reforms still provide for fixed costs and a defendant will still see a reduction in their average costs.
Whilst there is no doubt that the reforms will achieve their objective of reducing the cost of these claims, as ever I can see that the early months will see new issues identified and new ways of working for all.
Guest blogger Robert Lewis is a Loss Management Director working within Willis UK. He is a former lawyer who spent 15 years working in private practice on EL/PL and motor litigation. Prior to joining Willis he worked for 6 years as the Global Claims Manager for Tesco. His client base at Willis includes the major retail accounts as well as providing claims process advice and support to key global clients.
This article first appeared in The British Retail Consortium Magazine, The Retailer (Summer 2013).