The claims portal – a big advance, but you have to be ready

The personal injury claims portal, due to go live in August for EL and PL claims, should result in significantly lower claims costs. Risk managers must, however, be prepared and able to respond rapidly to events if their organisations are to benefit, a well-attended joint Garwyn-Airmic briefing heard on April 30.

“We see it as positive development,” said Garwyn CEO Artur Niemczewski. The underlying purpose of the portal, which was set up under the Jackson reforms, is to speed up the personal injury claims process and keep legal costs under control.

Referral fees are banned. Success fees and ‘After the Event’ insurance premiums are no longer recoverable from defending insurers, who will be able to apply for costs where claims are deemed either dishonest or fraudulent.  Most importantlythird-party legal costs will be capped.

Even assuming that 50% of claims continue to be settled outside the portal, Garwyn estimate that the reform will lead to savings of £2,547 or 26% on the total cost of an average claim up to £10k. Those in the £10k - £25k should see average savings of £5,414 per case.

Risk managers nonetheless face considerable challenges, and should already be taking the necessary steps, said Garwyn technical director Peter Wilson. High on the list will be the need to acknowledge receipt of all claims within a working day. It will also be necessary to gather evidence in reduced timescales, and they face the prospect of aggressive or shrewd tactics by some claimant lawyers. To prosper under the new arrangements, defending firms will have to have effective internal communication and reporting systems.

Four top executives from the Claims Portal company led by chairman Tim Wallis took up the theme, drilling into more detail. A clear message to come across was the need to look at the changes and see how they might affect your specific operation.

Captives, for example, may find complications, especially where they reinsure a fronting insurer. How do you guarantee that a claim gets a response within a day when the company receiving it is not responsible for its administration?

It would furthermore, be over-optimistic to expect clarity from day one, especially since the Ministry of Justice is still working out some of the details.  Grey areas may only be resolved through litigation, so risk managers will have to keep a keen eye on legal developments.

To judge by the number and variety of questions the audience had to ask the panel, and by the comments of those risk managers who stayed for the reception afterwards, this was a very useful session. But no one is under illusion that they know it all.

An electronic copy of the full presentation is available to Airmic members from Garwyn.  Please contact: Bruce.Kilby@Garwyn.com