Are your insurers still paying out for excessive legal costs to claimants?
By Richard Nicholson, director of Romero Insurance Brokers
FOLLOWING Lord Justice Jackson’s Judicial review of employers’ and public liability claims, the new Claims Portal was launched and came fully into force on August 1, 2013.
The reforms were brought in to restrict the excessive legal costs for employers’ and public liability claims and also to speed up the way they were being dealt with by lawyers and insurers reducing legal costs and thus the amounts paid for claims in total.
Since the mid-1990s, claimants’ solicitors have had almost free rein to charge as they please under the catchy banner of ‘no win, no fee’. Solicitors could charge not only for their time spent, but also double that figure if they had taken a perceived risk in running with the case.
The latest reforms have not only banned this but also imposed reasonable fixed claimant legal costs for claims handled within the Portal and for claims that fall out of the Portal.
This was the shot in the arm that the UK Insurance Market had been campaigning for. However, nearly two years in, is the new system working for you and your business?
Have you seen a reduction in claims settlements and insurer’s reserves on outstanding claims? If not, the answer may be with your choice of insurance broker.
Due to the tight timescales involved in getting a claim into the portal, it is vital that your insurance brokers act swiftly to any new notifications so the claim gets into the portal thus reducing legal costs by thousands.
Following a recent full review with a major insurer, Romero Insurance Brokers found that reserves placed against EL and PL claims had not been reduced to reflect the new restricted costs. This meant that large estimates were still being placed against claims with heavy legal cost estimates that were simply never going to materialise due to the restrictions.
If these claims remain on your claims experience unchallenged for a number of years, then your premiums will not be an accurate reflection of your insurer’s claims spend and will have negative impact on your premiums and make your risk less attractive to potential underwriters.
Romero Insurance Brokers challenge reserves on a regular basis to ensure that claims stay in the Portal framework by providing thorough advice and guidance on how to use this to your advantage and, above all, ensure that the savings being made by the insurers are being passed onto our clients. Romero’s proactive approach to claims is recognised as market leading within the insurance industry, this has been acknowledged by the numerous industry awards we have won for our claims service.
For further information, or if require a confidential review or your outstanding claims and insurance arrangements please contact Richard Nicholson by emailing richard.nicholson@romeroinsurance.co.uk or call 0113 281 8110.
