The emergence of a more efficient and transparent claims process?

Date: 23/02/11

The 55^th update of the civil procedure rules includes significant amendments to the Pre-action Protocol for disease and illness claims. It proposes to make the process more efficient and transparent, helping to develop a more reciprocal relationship between claimant and insurer.

 The intention is to ensure that full information is exchanged at the beginning of a claim to improve the speed of the pre action process in disease cases. This will provide a greater flow of information and evidence between the parties allowing earlier decision making on all sides.

 In cases of mesothelioma there is an attempt to breach the stalemate over disclosure of the claimant's evidence on exposure, which effectively derailed earlier negotiations over a distinct mesothelioma protocol.

In relevant cases, it may now be agreed by the parties involved in a claim that the Disease & Illness Protocol, rather than the Pre-action Protocol for personal injury claims, should apply. The latter is applicable where a single event is alleged as the cause of a disease or illness and, in this instance insurers should formally agree, for the avoidance of any doubt that the Disease & Illness Protocol should apply.

The Disease & Illness Protocol is by no means perfect but does offer certain advantages to insurers, in relation to the disclosure of documents and in particular, the greater flexibility it allows them to instruct their own experts 

The protocol aims to make sure that ‘relevant records’ in the claimant's possession are made available to insurers. The amendment clarifies the definition of ‘relevant records’ to be disclosed to insurers to include the claimants’ GP and hospital records. This should assist insurers in addressing the complex points raised by some claimants’ solicitors when challenging the definition of relevant records.

Claimants will now have to provide full details of any ‘after the event’ (ATE) insurance - a move that will be welcomed by insurers seeking greater transparency from any arrangements a claimant may have. Claimant's will now have to identify the level of cover purchased and state whether or not the premiums are staged and, if they are, divulge the points at which the increases become payable. However, there is still no requirement to state the level of the premium and therefore, insurers will have to continue to rely on experience in reserving appropriately. Part 45, at least, means the level of the success will generally be pre determined and known.

The most beneficial amendment for insurers is that a claimant must now provide an HM Revenue & Customs-backed work history. Where more than one employer appears in the work history, the claimant must identify any relevant exposure during each period of employment or self-employment. They must also disclose whether any claims and payments have been made under the Pneumoconiosis etc. (Workers Compensation) Act 1979.

Crucially, this employment history must identify where a claimant was, or was not exposed to an agent alleged to be responsible for the disease. In mesothelioma cases, this information should be included in an ‘early notification letter’ before a claim letter is sent. The amended protocol now recognises this is particularly relevant in view of the joint and several liabilities imposed on defendants in these claims by the Compensation Act 2006. The protocol recognises what is widely accepted by insurers that strict compliance will not always be possible. However, it is hoped this provision will overcome any lingering reluctance by the claimant’s advisors to disclose their position on apportionment between the defendants at an early stage.

This update should assist insurers in determining contributions and in coordinating settlement, in-turn helping to accelerate the claims process. Interestingly, it also requires claimants to provide results of any ABI searches, whether positive or negative which will give insurers further steer on the employers that the claimant considers to be responsible their alleged condition. This obligation is ongoing.

The Protocol also now recognises that expert opinion may be needed on appointment issues in addition to knowledge, fault and causation. This recognition will hopefully overcome the reluctance of some district judges to allow defendants to rely on this form of evidence. It may also encourage claimants to engage more with the process of disclosure, and supply information to experts from the beginning of the claims process.

There has been some very helpful tweaking to the Protocol and it is good to see that the claims process is recognised as a genuine two-way street. The process requires all parties to engage in a meaningful exchange of information to resolve disputes at an early stage. 

Robust action on the part of the judiciary is needed to give the Protocol some real ‘teeth’. Accompanying the amendments is a proposal from the Civil Justice Council to add a mandatory checklist to all Protocols for parties to complete. It will confirm that every step has been taken to comply and the fact that such a checklist will be open to scrutiny ought to encourage all-party compliance. The current process requires parties to confirm only compliance in the allocation questionnaire – a question usually answered in our experience with a perfunctory ‘yes’.

 What will happen in the event of default remains to be seen, as does the precise content of the Disease and Illness checklist. However, the amendments are encouraging and a beneficial move towards greater transparency.