Death by Indifference

CLAIMSMANAGEMENT
THE MAGAZINE FOR CLAIMS MANAGEMENT PROFESSIONALS

ISSUE 20
AUGUST 2009
ISSN 1753-6537
LYNCHPIN
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CLAIMSMANAGEMENT
THE MAGAZINE FOR CLAIMS MANAGEMENT PROFESSIONALS
In comparison with the Costs Review, the design and
construction of the Tower of Babel seems to have
been a harmonious and straightforward project.
Lord Justice Jackson tells it like it is
If a CMCs viability depends on being able to offer
more to its clients, the broader the range and the
greater the simplicity of its services, the better.
Patricia Scully on the importance of exibility
If a claimant does reject the defendants offer then he
does not forfeit his claim for damages (hire charges)
but is entitled to recover at least what it costs the
defendant to provide a replacement vehicle.
Liz Adams on the decisions in Copley and Maden
Unlike the more traditional claims handling methods
employed by insurers, whereby the claimants prole
or postcode was the determinant of risk, insurers
should actually focus on the claim, rst and foremost.
Jon Day on the effectiveness of cognitive interviewing
If a CMCs viability depends on being able to offer
more to its clients, the broader the range and the
greater the simplicity of its services, the better.
Patricia Scully on the importance of exibility
Planning ahead
How CMCs should prepare
for the future
22
Fraud
The role of accident
investigators
27
31
18
The unenviable task
Jackson Review analysis
21
Introcucing ARC
Launch of a new trade body
Military compensation in
the spotlight
07
ISSUE TWENTY AUGUST 2009
21 and ON THE COVER
NEWS
FEATURES
03
Crackdown on payment
protection
11
Call to ban complex money
products
13
Medical reporting
Handling unsatisfactory
reports
25
18
22
31
33
PRODUCTION
EDITORS-IN-CHIEF Neil Beck
Bippon Vinayak
Simon Cottrell
Melanie Summers
EDITOR James Ratcliff
james@barkerbrooks.co.uk
EDITORIAL COMMITTEE Mark Butterwick
Ian Fulton
Pamela Gellatly
Ham Harper
Paul Manning
Patricia Scully
Russell Smart
Janet Tilley

DESIGN Lucy Taylor
lucy.taylor@barkerbrooks.co.uk
ADVERTISING SALES John Margett
john.margett@barkerbrooks.co.uk
t: +44 (0)1423 851150
SPONSORSHIP Kate McKittrick
kate.mckittrick@barkerbrooks.co.uk
t: +44 (0)1423 851150

SUBSCRIPTIONS Jonathan Crawley
jonathan@barkerbrooks.co.uk
t: +44 (0)1423 851150
Subscriptions are available to Claims Management magazine
at 90 for one calendar year (6 issues).
Unless requested otherwise, your subscription will start with
the issue following receipt of your payment.
CONTACT THE EDITOR
The editor welcomes articles, letters and other forms of
contribution for publication in Claims Management and
reserves the right to amend them.
Email: james@barkerbrooks.co.uk
PRINT
Buxton Press
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PUBLISHER
Chief Executive
Lucy Barker
lucy@barkerbrooks.co.uk
Barker Brooks Media Ltd,
Barker Brooks House,
4 Greengate, Cardale Park,
Harrogate, HG3 1GY
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2009 Barker Brooks Media Ltd.
All rights reserved in and relating to this
publication are expressly reserved. No part of
this publication may be reproduced without
written permission from the publisher.
C
o
n
t
e
n
t
Credit hire
Copley v Lawn and
Maden v Haller
Household claims
Cognitive interviewing
33
Claim 2 Gain
New software product
35
www.claimsmagazine.co.uk
Death by indifference
Clinical negligence uncovered
37
Forensic accounting
Its role in insurance claims
38
Claims_Management:Claims Management Advert 31/07/2009 10:49 Page 1
Comment
COMMENT
The landscape for claims management
companies (CMCs) continues to change.
Lord Jacksons Report is hardly full of praise,
but there does seem to be a recognition of
the fact that they play a key role in delivering
access to justice, and their position is of vital
importance going forward.
The regulator is doing an effective job
of weeding out the shysters and giving
the reputable businesses room to breathe.
And that is having an enormous effect on
the market, encouraging consolidation
and growth. More importantly, perhaps,
as Patricia Scully writes on page 22, it is
changing the way solicitors view their
relationship with CMCs. Increasingly, law
rms are realising that they need close
working relationships with CMCs, to the
point where many are moving into the
market themselves. If this trend continues,
we will see further huge changes to the
way the industry operates. The emphasis
solicitors are placing on marketing will also
put pressure on traditional CMCs to offer
more, and better services to their clients.
The industry is a long way from settling on a
working model, and in the meantime being
versatile and open to new ideas is the only
sensible way forward.
James Ratcliff
If you would like to share your views on any of the issues
covered in Claims Management magazine, email the editor
at james@barkerbrooks.co.uk
IN THE RIGHT PLACE?
05
PAY JUST 75 FOR A YEARS SUBSCRIPTION
CLAIMSMANAGEMENT magazine is a
publication that acts as a knowledge-sharing
vehicle for claims managers in the UK. It is a
forum for debate and a resource that readers
can rely on for the most up-to-date news and
information across the industry.
Our subscribers include solicitors, car hire
companies, collision damage repair companies,
and insurance brokers.
Subscribers to CLAIMSMANAGEMENT
magazine benet from:
Access to articles written by some of the
industrys leading gures
Industry news updates, and compliance
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To subscribe: simply ll in the online form at www.claims-management.net/subscribe-to-claims-management
call Jonathan Crawley on 01423 851150, or email jonathan@barkerbrooks.co.uk
News
07
NEWS
Army families angry over will debacle
The grieving families of soldiers killed in Afghanistan face further
upset as the wills of fallen loved ones become lost amid the
labyrinthine bureaucracy of the services.
The last wishes of four Royal Marines are still missing, despite
an urgent investigation by the Ministry of Defence (MoD). And the
gure is expected to be higher across the entire Armed Services.
As well as having to cope with the death of a loved one, the dead
mens grieving families are also having to deal with rifts between
bereaved family members due to the mistakes of the MoD.
A broader inquiry has now been urged, with one MP accusing the
Government of bureaucratic incompetence bordering on cruelty.
The wills controversy is the latest levelled at the MoD, which
has already faced angry claims that it sent servicemen to ght
with inadequate equipment, poor reconnaissance vehicles and a
lack of helicopters.
Now the Government stands accused of failing its duty to
soldiers even after their death.
Twenty British soldiers were killed in Afghanistan in July alone,
bringing the total number of British servicemen and women killed
in the country to 189.

Fifth of builders forego insurance
The Construction Products Association (CPA) has strongly criticised
the governments credit insurance top-up scheme, arguing that one in
ve rms are now trading without cover.
In a survey of 100 companies, the CPA found only one company had
taken advantage of the scheme since it was launched in Aprils Budget.
Under the plan, the government will match private sector trade
credit insurance for a temporary period, if insurers reduce cover of
a business.
However, the company in question said it was very expensive
with very limited cover. Others were unable to take advantage of the
scheme because cover had been reduced to zero.
Michael Ankers, the CPAs chief executive, said: Along with other
representative bodies, we fought hard to persuade government to
introduce a top-up scheme, but it is clear that by the time this was
announced in the April Budget, much of the damage had already
been done.
The survey found 95% of companies had seen credit insurance
totally withdrawn from at least some of the companies they supply, and
where insurance has been maintained, the average reduction in cover
is more than 30%.
Mr Ankers added: As a result of this, nearly one third of companies
have closed or reduced accounts, while 20% are having to trade
without credit insurance with all the risks that this brings. For smaller
companies the problems are particularly severe and they have
been forced to stop supplying customers if credit insurance is not
available for fear that one bad debt would bring the company down.
Fraudster admits 11,000 liability
A man whose home was burgled has been forced to pay 11,000
back to his insurance company after he falsely claimed for items
that had not been stolen.
A total of 6,000 in cash was stolen in the genuine burglary at
the 58-year-olds home in Beeston, Leeds. A ring worth 2,000
also went missing and 3,000 of damage was caused.
But after the insurance company said it would only pay out
500 for stolen cash, the man claimed that a second ring and a
watch worth 6,000 had also been taken.
West Yorkshire Police uncovered the fraudulent claim when the
burglar was caught. He admitted stealing the ring and the money
but denied any knowledge of the additional ring and watch.
The homeowners claim was declared null and void when
he admitted making the fraudulent claim following a police
interrogation.
Detective Sergeant Mark Bray said: Becoming a victim of
burglary is far from a pleasant experience for anyone but some
people use it as an opportunity to make a few quid back by
falsely adding a few items of property to their claims, or in this
case just rake back any losses not covered by insurance.

Insurance could replace welfare
Radical welfare plans could see 17 billion worth of benets a year
replaced by private sector insurance, it has been revealed.
Proposals from a group co-chaired by Chancellor Alistair Darling
would mean that some sickness and unemployment benets
would be contracted out to the private sector in an apparent bid to
cut the burden on taxpayers.
The move would be a massive reworking of the 1945 Labour
governments cradle-to-grave welfare reforms. It could see life
insurance used to fund long-term care for the elderly, rather than
money from the public purse.
A more controversial aspect of the plan backed by an industry
working group co-chaired by the Chancellor and Andrew Moss,
chief executive of insurance group Aviva would mean compulsory
insurance for safety nets such as unemployment benet.
Mr Moss said: We are saying there is a debate to be had. The
industry does have the capacity to take on more of these risks.
He argued that the public already accepts compulsory insurance
when driving their car.
If you have any news to include, please contact james@barkerbrooks.co.uk
CORRECTION
In the last issue of Claims Management we ran the wrong
advertisement for The Injury Care Clinics. The contact
details included in issue 19 were incorrect. The correct
details can be found at www.ticcs.co.uk
News
NEWS
Protection insurance benecial for consumers
A major agreement between insurers has resulted in a signicant
drop in complaints on critical illness insurance, according to the
latest Financial Ombudsman Service (FOS) Annual Report.
The ABI Code of Practice on long-term protection forms part
of the ABIs Consumer Strategy, which puts consumer interests
at the heart of what we do. The Code guarantees that all ABI
members treat customers fairly when dealing with claims where
they had unintentionally failed to tell their insurer a relevant
piece of information when they applied for their policy.
As well as the FOS reporting fewer complaints on critical
illness insurance, of the complaints that do go to the FOS, they
are now nding that the insurer has acted fairly in more cases.
Nick Starling, the ABIs Director of General Insurance and
Health, said:This drop in complaints is a direct result of the ABIs
Code of Practice. The Code looks at the way claims are dealt with
where people failed to tell their insurer about a relevant piece of
information when they applied for their policy.
This is good news for consumers. It means people can be
condent that when they buy a critical illness policy, they know
it will pay out if it is needed.
Insurance Fraud Bureau research shows halt in
Crash for Cash growth
The Insurance Fraud Bureau (IFB) today releases statistics
pinpointing the top twenty areas of the UK affected by Crash
for Cash crimes, showing insurers halting the growth of the
problem. The IFB employs state of the art technology and utilises
data pooled from across the insurance industry to identify
criminal networks putting innocent motorists lives at risk with
Crash for Cash activities and proactively stop them growing.
Working with its membership to engage Police forces in
joint investigations, the Bureau has over the last two years
successfully disrupted the actions of criminal gangs, stemming
and reducing the growth of Crash for Cash on the UKs roads.
Nationally, organised Crash for Cash network sizes have
reduced by 11% over two years, at a time when crime is widely
forecast to be on the increase due to the recession. The IFBs
regional statistics show the power of its disruptive activity.
Drawing on two years of insurance claims and policy data, the
IFB can demonstrate that hotspots where there has been joint
Police and IFB activity are experiencing less Crash for Cash
claims over the last three months.
Particular areas where this is the case include Luton, East
London, Harrow and Walsall. Other areas have seen Crash
for Cash levels stabilise including Birmingham, Uxbridge and
London North-West. Conversely, where the Police have yet to
engage with the IFB, Crash for Cash activity is increasing, most
notably in Liverpool, Halifax and Ilford & Barking.
Chimney manufacturer compensates
asbestos victim
Graham Dancer, 63, from Barnstaple, Devon has received the
damages after being diagnosed with the fatal asbestos cancer
mesothelioma caused by exposure to asbestos while working for
Selkirk Flue Limited, now owned by Powrmatic.
He worked for the chimney manufacturer, based in Pottington
Trading Estate Barnstaple, from 1969 until he was diagnosed with
the disease in 2007.
He was exposed to asbestos on a daily basis in the early years
of his employment. He started work in the warehouse where
pipes insulated with asbestos were brought into the factory. He
later moved to the production department where he applied
asbestos to pipes.
He remembered: There was so much asbestos dust that you
could see a thick layer of it on your tool box. You could also see it
oating in the air. My overalls and hair would be covered in it.
Mr Dancer, who has a wife, Wendy, and no children, was told
by doctors he has just months to live. He has retired and said he
is now taking each day as it comes.
There is no cure for mesothelioma which is caused only by asbestos.
Following his diagnosis Mr Dancer contacted his union, UNITE,
which instructed asbestos claims experts Thompsons Solicitors
to advise him about compensation.
The claim was settled out of court within 17 months.
Mr Dancer said: I was told by the hospital that there was
08
ON THE MOVE
Karl Fischer has joined PR Scully & Co in St Helens as New
Business and Client Development Manager.
Karl joins PR Scully from Merseyside rm Carpenters Solicitors.
Senior partner Patricia Scully said: We are delighted to
welcome Karl to the rm. He has a wealth of experience in
personal injury and claims management and we look forward to
working with him as we continue to expand our business.
Steve Molloy has been appointed as
Marketing Manager at Manchester rm
Antony Hodari & Co.
Steve was previously Head of Marketing at
Alexander Samuel & Co.
The rms Senior Partner, Antony Hodari,
said: I am delighted to welcome Steve to our senior management
team. Steves industry knowledge, fresh marketing initiatives and
operational expertise will prove a huge asset in driving our short
and long term growth plans forward.
News
NEWS
09
nothing they could do for me but the union put me in touch
with Thompsons Solicitors who have dealt with me with
compassion and efficiency.
I am relieved that my case has been resolved so quickly. I can
now get on and enjoy the time I have left.
Lawrence Faircloth from UNITE added: Asbestos has affected
the lives of many of our members who were unwittingly exposed
to the dangerous dust by negligent employers.
We are pleased to have supported this member with his claim
for compensation. The swift settlement means he can enjoy peace
of mind that his family will be provided for in the future.
Amanda Jones from Thompsons Solicitors said:
Mesothelioma is a devastating disease caused by exposure
to asbestos. It was our aim to enable Mr Dancer to receive
compensation during his lifetime which is what he wanted.
While it will not bring back his health we understand the
importance to him of knowing that his wife is financially secure
and that the formalities of the claim have been resolved quickly
and successfully. The backing of his union was instrumental in
bringing about the successful conclusion of the claim within his
lifetime.
Insurance fraud PCs found guilty
Two lesbian policewomen have been convicted of defrauding
an insurance company after a crash by lying about which one of
them was driving.
Diane Reeves-Emery, 38, claimed she was at the wheel when
her lover, Charlotte Eccles, 23, hit the kerb in her car, causing
3,000-worth of damage.
The intention was to cut the excess charge to 250 from the
500 that Eccles would otherwise have had to pay because of her
youth and inexperience.
At Stafford Crown Court, both women, who were employed
by Derbyshire Constabulary, were found guilty of obtaining a
financial advantage by deception.
Eccles claimed that she only went along with it because she
was petrified of Reeves-Emery, who she claimed had been
emotionally and physically abusive.
The court heard how they at first told insurers that Reeves-
Emery had been driving, but that Eccles had later confessed that
she had been at the wheel.
Reeves-Emery was also convicted of a second count of
deception for not notifying her own insurers of the crash when
she renewed her policy just days later.
The pair will be sentenced later.
Genetic test warning for insurers
Insurance companies have been told not to use genetic test
results, increasingly used by people to check for inherited
diseases, to hike premiums.
A House of Lords committee wants to see the European Union
place tougher regulations on the industry, including a voluntary
code of conduct that would ensure insurance companies do not
use the test results for their own gains.
The Lords science and technology committee led an inquiry
into the tests which found that claims about identifying
an individuals risk of developing diseases were rarely
substantiated by scientic evidence.
The committee warned that insurance companies could get
hold of the results and use them to increase premiums, or even
refuse cover altogether.
The inquiry was chaired by Lord Patel, who added: We have
concerns about the growth of at home direct-to-consumer tests.
Without proper qualied interpretation, results of genetic
and genomic tests could cause people to worry unnecessarily
and place new demands on NHS services. It is time rms offering
these tests were required to provide counselling and guidance on
interpreting the raw results they provide.
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NEWS
11
Crackdown on payment protection
Moves aimed at cracking down on the sale of payment protection
insurance (PPI) are going ahead despite an appeal by banking
giant Barclays.
PPI covers debt repayments if a policyholder is unable to work
due to an accident or illness, or if they lose their job.
The Competition Commission heavily criticised the PPI market
when it released a report in January, saying single premium cover
caused considerable concern as it required the entire cost of the
policy to be paid upfront, often adding to the debt that is being
taken out.
This can lead to people paying considerably more interest on
their debt, while in some cases consumers claimed the premiums
were added to the loan without them even knowing about it.
The watchdog has now launched a consultation on
recommendations in the hope of avoiding any delay caused by the
ongoing appeal.
The sale of single premium PPI has now been banned after the
Financial Services Authority (FSA) decided to bring forward the
Commissions recommendation.
An appeal of the commissions decisions was led by Barclays in
March, in particular in protest at the ban. The hearing is set to take
place on September 10.
Peter Davis, Competition Commission deputy chairman
and inquiry chairman, said: Taking these steps now will help
ensure there is no unnecessary delay in resolving the signicant
competition issues that we found in this market and in delivering a
better outcome for consumers.
Banks efforts having little effect
Despite more than 100 billion being pumped into the UK
economy through quantitative easing (QE), little seems to have
changed in the credit markets.
Four months on from the Bank of Englands efforts to boost the
money supply, gures show lending to private rms fell by 4.5
billion between March and April and by a further 300 million
between April and May, while growth in lending to households was
also reduced.
Since the Bank launched its quantitative easing programme
effectively printing money in March, the Monetary Policy
Committee (MPC) has authorised 125 billion in QE purchases.
However, it is likely to press on with the remaining 25 billion of
its 150 billion mandate after the latest assessment of the current
nancial crisis placed the economy in its biggest slump in more
than 50 years during the rst quarter of 2009 a far worse than
expected 2.4% decline.
The initial idea behind QE was inject money into the system so
as to underpin bank balance sheets and encourage lending in the
wider economy.
However, the Bank is also charged with keeping CPI ination at
2% and its forecasts show it undershooting this target with interest
rates at 0.5% and 125 billion of QE.
The claims and medical sectors leading
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News
Book your table now
Nominations have closed for this years awards, and judging process is in full swing. The Awards will culminate
in a prestigious ceremony and dinner at the The London Marriott Hotel, Grosvenor Square on Tuesday 10th
November 2009, and we want to see you there.
Tickets for the event are priced 160 +VAT with tables of 10 at 1,600 + VAT
For full details and to book your tickets, visit www.personalinjuryawards.co.uk; alternatively, please contact
Claire Winstanley on 01423 851157 or email Claire.Winstanley@barkerbrooks.co.uk
The Awards Categories
Personal Injury Lawyer of the Year (claimant)
Personal Injury Lawyer of the Year (defendant)
Young Achiever of the Year
Personal Injury Team of the Year
Claims Management Company of the Year
ATE Insurance Provider of the Year
Medical Agency of the Year
Rehab Provider of the Year
Barrister of the Year
Barristers Chambers of the Year
Outstanding Case of the Year
Mediation Achiever of the Year
Independent Expert Witness of the Year
Outstanding Achievement of the Year
For further sponsorship opportunities, please contact Kate McKittrick on 01423 851150
or email kate.mckittrick@barkerbrooks.co.uk
Confrmed sponsors
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NEWS
13
Call to ban complex money products
A judge at Birmingham County Court has told a couple from
Shrewsbury that they can remain in their family home indenitely
after exchanging it in a sale and rent back scheme.
Paul and Amanda Jackson were forced into entering the scheme
with Repossessions Stopped after falling behind on their mortgage
payments. They were told by the rm that they could remain in the
property indenitely.
However, just two years after the agreement, the rm issued the
couple with an eviction notice after falling behind on its own mortgage
payments on the property, prompting the family to take legal action.
Mr Jackson said: We took that option (sale and rent back) to
provide security but we felt as if everything was being stolen from us.
The case was brought to the court by the housing charity Shelter
who celebrated the landmark case as the rst of its kind.
Shelters principal solicitor John Gallagher said: This is a huge and
important victory for not only the Jackson family but everyone who is
tempted by these sale and rent back schemes.
Societies Bill clears key hurdle
The Co-operative and Community Benet Societies and Credit
Unions Bill proposed by Labours Lord Tomlinson is said to represent
the re-branding of societies necessary at a time when the sector is
undergoing a renaissance.
Lord Tomlinson told the Lords: We are at the end of a period
where there has been a decline in the signicance of co-operation
and we are now in the era of a resurgence, a renaissance, of co-
operation and of mutuality.
The Bill aims to help mutuals ourish by introducing requirements
which would ensure they could be supervised by the Financial
Services Authority.
Under the proposals, laws on credit unions will also be brought
into line with those for building societies.
Liberal Democrat spokesman Lord Newby backed the eminently
sensible Bill, which has already cleared the Commons, as a tidying-
up and modernising measure.
He praised the timely and good Bill for focusing on objectives of
modernising legislation and increasing condence in societies.
MoJ names rogue claims rms
The Ministry of Justice has now listed on its website all
the claims management companies that have had their
authorisations suspended or cancelled.
The MoJ, which regulates the sector, says that specific
reasons for enforcement action will not be published.
Firms in this sector arrange the entire process of claiming
compensation.
Officials says that publishing the names and the status of
their authorisations is simply making this information easier for
consumers to check.
Says spokesman Jan Farenden: The claims management
regulator suspends or cancels a persons authorisation in
accordance with the enforcement policy and the procedures
in the Claims Management Services (Regulations) 2006 if
conditions of authorisation have not been complied with and it is
necessary to take this action to protect the public.
If a business is suspended or cancelled they have 28 days from
the date of the decision to appeal to the Claims Management
Services Tribunal.

Serious Fraud Ofce budget cut
It is now investigating 88 cases, up from 65 last year, even
though a management shake-up saw 90% of its senior staff
leave the organisation over the past year.
High-profile cases include the UK operation of US fraudster
Bernard Madoff, financial products offered by collapsed US
insurer AIG and the failure of UK carmaker MG Rover.
This year its conviction rate was boosted after 78% of
individuals who had cases brought against them either pleaded
guilty or were convicted by a jury.
Of 18 cases brought to court, 17 of them saw at least one
defendant convicted. The exception was Operation Holbein, the
inquiry into alleged price-fixing by drug companies.
As a footnote, the SFO mistakenly claimed in its annual report
that its budget for the last year was around 50 billion instead
of 50 million. In fact, all budget figures in the accounts are out
by a factor of 1,000.
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S P Associates, 1 Dover Avenue , Worcester WR4 0LA
DX 716301 Worcester 1 | Tel/fax: 01905 757187

Untitled-1 1 5/8/08 15:55:17
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NEWS
15
Insolvencies will continue to rise
The number of companies in financial difficulty will continue to
rise despite any upswing in the economy, insolvency company
Begbies Traynor has predicted.
It reports pre-tax profits up from 5.7 million to 7.2 million,
and predicts that industrial dark clouds will continue to provide
silver linings even after the economy recovers.
It said there were nearly 22,000 corporate insolvencies in
2008, a 38% increase on the previous year.
High-profile cases included Southampton Leisure Holdings,
the parent company of Southampton Football Club, which
helped boost revenues by 29% to 62.1 million for an insolvency
operation reckoned to be the biggest in the UK.
The Manchester-based firm says that it handled 1,800
corporate cases in the year to April 30, an increase of around
38% on the same period last year.
Says a spokesman: We believe that the volumes of corporate
and personal insolvencies, as with levels of unemployment, tend
to be indicators that lag any change in economic activity and are
therefore likely to continue to rise after the commencement of
economic recovery.
Claims management companies banned
Four claims management companies have been banned from
operating in a Government bid to protect the public from
exploitation by rogue operators.
Claimwise Legal Services and Momentum Network have had
their authorisations cancelled, while GloVista Red and Ezee
Claims have been suspended.
Damages-based contingency fee agreements, generally used
in employment tribunals, were previously free to charge what
they wished before regulation was introduced in 2007.
Says Justice Secretary Jack Straw: Unregulated contingency-
fee arrangements expose claimants to unfair terms and
conditions being imposed by those representing them, which
could lead to huge slices being taken out of their damages.
These arrangements - unlike, for example, conditional fee
agreements - have until now been without statutory regulation
because of a long-standing legal anomaly.
New proposals yet to be implemented aim to make sure
consumers know, before they sign anything, how much any
claim is likely to cost.
Says Carl Wright, boss of claims management company Cartel
Client Review: Consumers must be very wary of firms that make
misleading claims of buying up debt. It may appear an attractive
notion, but their lack of legal experience with unenforceable
credit agreements will only leave consumers in deeper financial
trouble, and potentially even in court.
Firms to publish complaint details
The Financial Services Authority (FSA) has announced plans
to name and shame companies that receive high levels of
complaints from customers.
The watchdog wants companies that receive in excess of 500
complaints every six months to publish details on their websites.
Under the new proposals, rms would be required to reveal
how many complaints had been opened and closed during the
past six months as well as the proportion of cases that were dealt
with within eight weeks.
Firms would also be required to illustrate how many complaints
they received per thousand customers so that potential clients
could compare between large scale and small scale companies.
The announcements come in response to a rise in the overall
number of complaints that were upheld by the Financial
Ombudsman Service during the last nancial year.
The FSA hopes the exposing of poor practice will encourage
companies to focus more on customer satisfaction and how they
deal with complaints.
News
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NEWS
17
Retired policemans widow receives
compensation for asbestos death
The widow of a former policeman has received a substantial sum
in compensation after he died from an asbestos related disease.
Stuart Brown from Swansea died from mesothelioma after
he was exposed to asbestos as a 16-year-old apprentice while
working for Millers Insulation & Engineering Company.
He was employed as a laggers mate and worked on the
construction of BPs Petrochemical plant at Baglan Bay, Port
Talbot from 1963 to 1964.
Mesothelioma is caused by exposure to asbestos. It can take
40 years or more to develop and many sufferers die within
months of diagnosis.
He was exposed to asbestos used to insulate pipe work.
Before he died he remembered: You could see the asbestos dust
falling to the ground and sparkling when it fell through shafts
of light. There would be lots of asbestos dust and debris on the
oor which would be kicked around. We had no idea it could be
so dangerous.
Stuart became a police ofcer with South Wales Police in 1974
and retired in 2001 after 25 years on the beat. He was working
as a part time parking attendant when he was diagnosed with
mesothelioma in November 2005. Sadly he died just two months
later in December 2005.
He was just 59 and left behind his wife Christine, and a son.
Asbestos claims specialists Thompsons Solicitors obtained
substantial compensation for his wife.
She said: When we found out the cancer had been caused by
asbestos Stuart was determined to take action. He had always
been a very practical and caring man. I was unable to work and
he wanted to make sure that I was provided for. Sadly he died
just two weeks after he contacted Thompsons so I carried on
with the claim on his behalf.
Eamonn McDonough from Thompsons Solicitors added:
Mesothelioma is a devastating disease which ended Mr Browns
life at a relatively young age when he was preparing to enjoy his
retirement. We are only too pleased to have helped his family to
obtain compensation and to raise awareness about the dangers .
Fraud cases hit 21-year record
The number of fraud cases going through the UKs courts hit
a 21-year record high in the rst six months of this year, a top
accountancy rm has said.
KPMG said there were 163 charges of serious fraud where
more than 100,000 is embezzled in the rst half of this year,
with a combined value of 636 million.
If the gure is matched in the second half of the year, it will
exceed the highest annual total of 1.2 billion, recorded in 1995.
Investors were the worst hit, suffering losses of 321 million
more than half the total money in just 17 cases KPMGs fraud
barometer found.
The Government was the next biggest victim, with almost 153
million taken in 38 cases. It lost out mostly through tax and duty
evasion or fraudulent benet claims.
Financial institutions suffered 44 cases of fraud, totalling more
than 111 million.

Insurance fraud on rise: report
Approximately 5.2 million of fraudulent insurance claims go
undetected every day a 24% increase on two years ago a
report has found.
The Association of British Insurers (ABI) said that insurance
fraud had soared to an estimated 1.9 billion a year.
Popular scams, which cost the average household 44 a year
in higher premiums, included withholding information about
a speeding conviction, listing the wrong address for a motor
insurance policy or listing a parent as the main driver of a vehicle
that was used most by a newly qualied driver.
But the ABI said that rms were getting better at detecting
fraud, with suspect claims worth 730 million rejected last year.
The association reported a 35% increase in claims involving the
damage or loss of LCD televisions, high value watches and laptops.
The ABI said that more people had also deliberately damaged
furnishings or electrical goods so their insurer would pay for
new ones.
News
FEATURE
18
The unenviable task
Richard Smyth summarises the wide variety of views on Justice Jacksons report
O
ne might imagine that the report
published in May by Lord Justice
Jacksons civil litigation costs
review team constitutes the authoritative
last word on the subject. At 663 pages
(12 parts, 64 chapters, 30 appendices,
three annexes and a glossary) the report
is certainly comprehensive, touching on
issues that range from after-the-event
insurance and one-way cost shifting to the
use of IT in the courtroom and the costs
regime in place in the Eastern Caribbean.
Authoritative, then but by no means
the last word. For a start, the report covers
only Phase One of Justice Jacksons review
(after the conclusion on July 31 of Phase
2, the consultation process, one further
Phase remains, with a nal report due in
December). Whats more, the review is
independent of the Ministry of Justices
faltering steps towards reform of the
personal injury sector, which have seemed
to many to have been edging tantalisingly
towards implementation for years without
ever quite getting there and the last
word, if ever there is to be a last word, will
surely come from the MoJ, rather than from
Justice Jackson.
The reality is that the Jackson review,
while garnering rave reviews from many
quarters for its rigour and independence,
represents yet another round of discussion
for a sector growing increasingly prone to
consultation fatigue. There is widespread
agreement that civil litigation costs
inated by spiralling ATE premiums and
the use of Conditional Fee Agreements
(CFAs) need to be brought under control;
satisfactory consensus on the question of
how this is to be done seems as remote a
prospect as ever.
Justice Jackson himself has been quick
to acknowledge the polarised nature of
the debate.
In the last four months I have been
caught up in a maelstrom of conicting
arguments, he said at the launch of the
May report, demonstrating a dry line in
weary apercus. Indeed, in comparison with
the present Costs Review, the design and
construction of the Tower of Babel seems
to have been quite a harmonious and
straightforward project.
One thing is inevitable, he added. My
nal report will generate protest from at
least some directions and quite possibly
from all directions.
Justice Jackson acted astutely in heading
off the anti-regulatory uproar that is
certain to accompany his conclusions: his
assertion in the preliminary report that
one size does not t all is a reliable
palliative in these circumstances and
prompted sighs of relief from across the
profession. The phrase appears to promise
that regulatory measures will not be
heavy-handed and inappropriate; when
echoed by practitioners in, for instance,
the commercial courts, it can often be
roughly translated as: good luck, but leave
us out of it.
Frustration persists among practitioners
regarding the slow pace of reform. The line
between consultation and procrastination
often seems like a ne one.
It is a little difcult at present to be
preparing for reforms when you dont know
what they are likely to be, commented
Anthony Hughes, the chief executive of
Horwich Farrelly Solicitors and president of
the Forum of Insurance Lawyers (FOIL).
There is also doubt regarding the likely
efcacy of any new MoJ regulations; many
maintain that consistent and effective case
management by the judiciary as promised
by the landmark 1999 Woolf reforms
would represent a better way of limiting
litigation costs.
Ultimately, however many new rules
are introduced, it always comes back to the
judges ability to manage a case effectively,
David Allen of Mayer Brown London told
The Lawyer.
John McQuater, the president of the
Association of Personal Injury Lawyers
(APIL), agreed.
We do think effective case management
would be an extremely useful tool in
helping to control costs, with procedural
judges taking a robust stance on issues
raised, he said. McQuater singled out the
conduct of Master Whitaker in cases of
mesothelioma as an outstanding example
of good practice.
But Anthony Hughes suggested that any
attempts to improve case management
would be hampered by the low levels of
funding available.
The Woolf reforms were quite clear in
that they suggested that there would be no
local practice directions and that we would
get the same sort of judicial intervention
and indeed consistent case management on
all cases, he said. Unfortunately that has
not been the case.
Sadly, the court service is woefully
under-funded and, as a result, I am not sure
that we can expect [the lack of consistency]
to change.
FIXED COSTS
One measure that does appear likely to be
implemented in the not-too-distant future
is the introduction of xed costs to the
civil litigation fast track. Justice Jackson
described the measure as an essential
part of Lord Woolfs proposals; however,
for reasons characterised by Jackson as in
part political, implementation was stalled.
Similar proposals drawn up in 2007 by the
now-defunct Department for Constitutional
Affairs were also shelved.
The Jackson reviews Fixed Costs Sub-
committee is unequivocal in recommending
that the measure now be revived, and
FEATURE
19
THE JACKSON REPORT
proposes a cost matrix that establishes
xed costs in cases involving Road Trafc
Accidents, Employers Liability, Public
Liability, and Occupational Disease. Justice
Jackson noted that a xed-cost regime
would provide court users with a greater
degree of certainty a commodity that
many litigants crave and which is singularly
lacking in civil litigation.
Such a regime if implemented could
be complemented by MoJ-backed plans for
streamlining the fast-track claims process.
Also on Justice Jacksons agenda is the
somewhat muddy issue of middlemen.
The report suggests that the removal of
redundant layers of activity from the
personal injury litigation process would
be desirable; however, reformers in this
eld might be wise to choose their targets
carefully. Anthony Hughes cautioned
against indiscriminate scapegoating.
Middlemen is an unfortunate term, he
said. While I would very much support the
removal of people who do not add value to
the process, you also have to bear in mind
that there are many brokers within various
processes that can be of genuine value.
After-the-event (ATE) insurance a
key plank of the Governments strategy
for promoting access to justice following
the withdrawal of legal-aid provision is
thought to be a particular target for some
in the reform programme. The Jackson
report raises the possibility of introducing
one-way cost shifting in personal injury
cases; under this system, a defeated
defendant pays the claimants costs, but
a defeated claimant does not pay the
defendants costs.
One-way cost shifting could see
the removal of ATE [provision] but it is
Government policy that ATE insurance
should exist, Hughes explained. As such I
am not sure that there would be support for
any recommendation to remove it.
The fact remains that the Jackson report
in common with much of the material
produced on the subject by the MoJ is
long on discussion and relatively short
on concrete conclusions, and the future
of the personal injury market remains
indistinct. Hughes counsels a common-
sense approach.
Inevitably, efciencies will have to
be achieved and it is quite simply good
business practice to continually review
your processes and procedures to ensure
that they are as efcient as they possibly
can be, he advises. Have realistic
conversations with clients in terms of the
levels of service that can be provided and,
indeed, their own expectations.
The realistic bottom line is, of course, that
any solution to the sectors costs problems
has to acknowledge that, rstly, high-quality
legal services are never going to come cheap
and that, secondly, whatever reforms are
implemented could end up, like any good
compromise, leaving everybody mad.
Everyone seems to agree, at least, that
decisive and effective action by policy-
makers in Government as well as by
judges in the courtroom is required in
order to ensure equitable access to civil
justice; if consensus has to be reached
before such action can be taken, we could
be in for a long wait.
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Association of Regulated
Claims Management Companies www.arcmc.org.uk
08450602233
The Association of Regulated Claims Management Companies
is the trade association that represents small to medium sized
claims management businesses.

ARC provides members with access to industry associates,
training and development courses, advice, news, business
tools & services and much more.
Contact ARC today to discover the benefts.
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21
Introducing ARC
The trade body looking to lead with integrity
T
he Association of Regulated Claims
Management Companies (ARC), is
a newly-launched trade association
offering support and guidance to small and
medium claims management businesses.
Established in 2009, it offers clear paths
of communication between the Regulators
and its members in a climate where the
representation on offer to businesses in the
claims management sector is minimal.
ARCs aim is to provide efcient,
professional and regulated services
throughout the industry while keeping its
promise to support, promote and enhance
the image and general welfare of the claims
management sector.
ARC provides information to the public by
ensuring that claims management companies
(CMCs) meet high standards, and are fully
compliant with the regulations. For this to
happen, they offer their members training
and expert advice in all aspects of the claims
management sector, so that they meet the
standards set by the regulator.
Becoming a member of ARC brings with it
professional recognition and a wide range of
support services that aid the development of
claims management businesses, forging new
professional links between their associate
members and providing advice on the
industry to the general public. Membership
is offered on an annual basis to organisations
rather than individuals.
Offering three different levels of
membership, ARC can provide rms with
many benets, including a free Ministry of
Justice health check and access to contractual,
IT, marketing/media, funding and insurance
advice, membership to Casepool a web
portal for the sale and acquisition of legal
cases to name just a few.
The ARC Executive Board comprises
of industry experts from legal, insurance,
medical and claims management elds.
The Members Area within the ARC website
offers a wealth of information, covering
the latest news topics and articles, posting
documents for download and offering an Ask
the Expert service whereby questions from
members can be answered by a relevant expert.
ARC also offers training and development,
which is a highly effective way of increasing
your knowledge of current government
legislation and developing staff knowledge of
the claims management sector.
With ARCs unique and effective delivery,
it makes rms more knowledgeable,
potentially protable and easier to manage.
It offers a wide range of training solutions,
backed by innovative thinking and a varied
choice of delivery. All training is specically
designed to keep you and your rm in line
with regulatory policy and procedures. Upon
successful completion of your chosen training
programme, participants will gain an ofcial
ARC Certicate.
FEATURE
22
D
imond v Lovell, predictable costs,
third party capture, challenges
to CFAs the last ten years
have been relentless with challenges to
claimant lawyers and CMCs alike. One
problem is solved, a brief respite, then
along comes the next. With the new profit
costs figures for streamlining still firmly
under wraps, we wait to see what April
2010 will hold for CMCs. It will perhaps
be the greatest challenge yet. A general
election may postpone any reforms but
that will only delay the inevitable. Lord
Jacksons unease about commissions paid
to middlemen is evident. Discussing
referral fees in his preliminary report,
he says that there appears to be a
general view amongst solicitors on both
sides of the fence that the fees are an
unwelcome addition to personal injury
costs which bring little benefit to either
clients or lawyers. Cost cutting is on the
agenda and CMCs need to plan for the
reality that they are very much the focus
of his attention.
With the commissions currently on
offer, inefficient CMCs can, for now,
muddle on. Not for much longer. If the
change in costs rules brings about the
seismic change we expect, only those
CMCs that recognise the needs of their
clients and offer a valuable and timely
service to both clients and business
partners will survive.
Lord Jacksons tide may be turning
against CMCs but that has been tempered
by the abolition of legal aid for personal
injury claims. The government has to
recognise the rights of the ordinary
individual and will be keen to avoid
any suggestion that access to justice
is being denied. Aggressive third party
capture is the perfect demonstration
Planning ahead
Patricia Scully considers the changing role of the CMC
23
COVER FEATURE FEATURE
of the danger of the balance tipping
away from the individual. CMCs provide
a valuable frontline service to a client
who otherwise would be deterred from
claiming. Whilst the MOJ registration
process may have been an anxious and
uncertain wait for many, those companies
that have successfully registered and
then renewed have the respectability that
accompanies the recognition that they
provide a service.
WHERE IS THE VALUE?
At the APIL annual conference in 2009,
it was evident from a show of hands that
the vast majority of solicitors were not
in favour of referral fees. That view may
however change when it falls to solicitors to
attract work of their own volition and they
are faced with the attendant rise in costs of
advertising and marketing.
CMCs need therefore to remember their
worth. The value of the service provided
may be evident but that will not help if
commissions are squeezed to the extent
that smaller CMCs who do not benet
from efciencies of scale can survive. If
they are not to merge, how can smaller to
medium sized CMCs shift their position in
the market and thrive? More thought about
the clients needs (and rights) is required.
For example, why should the victim of a
non-fault accident claim the cost of repair
against their comprehensive policy? That is
a matter of principle that will always appeal
to a client. Clients should be aware that
they are not limited to an insurers choice
of repairer that will come as a surprise
to many who just assume that they have
to do as they are told. The availability of
credit repair should always be considered.
If a CMCs viability depends on being
able to offer more to its clients, the
broader the range and the greater the
simplicity of its services, the better. A
credit repair scheme has to operate to the
satisfaction of repairer and client alike.
The legal enforceability of a credit repair
scheme has been well tested. Clarke v
Ardington saw an end to uncertainty on
that front. Run efciently, a credit repair
scheme is a wonderful tool both in terms
of service and marketing. Do not confuse
an authorised repair scheme dressed
up as a credit repair scheme. Any such
scheme needs to operate ethically. Clients
will appreciate freedom of choice and
repairers a realistic market rate.
Charlotte Harrison, of Principal Claims,
has seen a signicant increase in business
by being able to offer clients and repairers
the benet of a exible credit repair
scheme. Clients appreciate freedom of
choice and repairers are grateful to retain
work that they would otherwise lose
to larger approved repairers. Speed of
payment to repairers, particularly in times
of recession when cashow is crucial,
makes all the difference.
Does your panel solicitor have the same
mindset in terms of how much they want to
do for their client? They should view a CMC
as a business partner and not just a referrer
of work. Your panel solicitor may pay
referral fees promptly but they need also
to provide a range and quality of service
that reects the needs of the clients, the
aspirations of the CMC and a long-term
view of solicitor and CMC relationships
needs to be taken in that regard.
The extra effort in the early stages
will result in rewards to the client and,
ultimately, to the CMC. The facility to
offer credit repair is just one example of
how a CMC is likely to retain its client
base. Given some careful thought and
planning, other areas of benefit to the
client can be explored. Change will bring
opportunity and, if the new regime does
launch in April 2010, those who embrace
new ideas will still be around to face the
next challenge that comes along.
Patricia Scully is Senior Partner at PR Scully & Co Solicitors
CMCs provide a valuable
frontline service to a client
who otherwise would be
deterred from claiming
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CM14_Evolution Legal_ad_half.pdfPage 1 1/8/08 18:58:18
25
MEDICAL EVIDENCE FEATURE
Making the most of
medical evidence
Part Two: How to handle unsatisfactory reports
O
n receipt you should read a
medical report carefully, and if
the expert was instructed by you,
check she has answered all the questions
you asked, and has complied in particular
with her obligations under CPR 35.10 read
with paragraph 2.2 of Practice Direction 35.
You will need to send a copy to the client
for their comments, and in larger cases, to
counsel for their suggestions for questions
or amendments.
AMENDING REPORTS:
Paragraph 15 of the Protocol for the
instruction of experts states that experts
should not be asked to, and should not,
amend, expand or alter, any parts of reports
in a manner which distorts their true
opinion, but may be invited to amend or
expand reports to ensure accuracy, internal
consistency, completeness and relevance to
the issues at hand.
If the expert was solely instructed
by you, and the report has not yet
been disclosed then you have a fairly
wide scope to consider revisions and/
or amendments. In Jackson v Marley
Davenport [2004] EWCA Civ 1225 the Court
of Appeal conrmed that where a party
unilaterally instructed an expert to provide
a preliminary report to be discussed at a
conference with a view to a nal report
being prepared, the earlier report was
not disclosable to the other parties. You
should bear in mind that the nal report
will be the basis of your experts evidence
at trial and will be most persuasive if it is
transparently the independent product of
an expert uninuenced by the pressures
of litigation. For this reason IT is almost
always preferable to allow the expert to
draft her own amendments following the
conference. Also remember that under
CPR 35.10(3) she is required to disclose
the substance of all material instructions,
so take care not to withhold or provide
material or ask questions in such a way as
to undermine the objectivity of the report,
or provide cross examination material
for your opponent. If you doubt the costs
of a conference would be recoverable in
your case, you could seek amendments by
telephone or in writing.
You can put questions to joint experts
or experts instructed by your opponent
once, within 28 days of receiving the
report, and only for the purpose of
clarication (CPR35.6): the responses to
such questions will be treated as part of
the report. In practice it is very common
to put detailed questions which either
raise new matters or ask the expert to
address issues which have been omitted
(there is some support for this in the
Court of Appeal case of Mutch v Allen
[2001] EWCA Civ 76), and although
responses to questions asked outside
this procedure can only be relied on with
the courts permission, it may be granted
where the responses address omissions or
issues in a useful and proportionate way.
REJECTING A REPORT
If the report was written by single joint
expert instructed by both parties under
CPR 35.7 then a copy will already have
been sent to your opponent and can be
relied on by them. The fact that a party
has agreed to adopt a joint expert does
not prevent that party being allowed
facilities to obtain a report from another
expert, or if appropriate to rely on the
evidence of another expert (Daniels v
Walker [2000] 1 WLR 1382), but you will
need make an application to the court for
permission to instruct a further expert,
which should be supported by cogent
reasons demonstrating by reference to
what is at stake in your case why it would
be useful and proportionate for you to be
allowed to instruct your own expert. You
should exhaust the questions procedure
rst. It will often be worth risking the
costs involved in instructing a second
expert to report before you make the
application, because you will be so much
better armed to argue the application.
If the expert was jointly selected under
the Personal Injury Pre Action Protocol
and you have not yet served the report,
the Court of Appeal has conrmed that
a claimant can legitimately withhold
disclosure and seek permission to rely
on a further report (Carlson v Townsend
[2001] EWCA Civ 511). If you had originally
proposed a number of experts some of
whom had not been objected to by the
defendant, there would be nothing to
prevent you instructing one of the others
without the court or the defendant ever
being on notice that you had received
an unfavourable rst report, but you will
obviously be unable to recover the costs
of the discarded report.
Hannah Tucker is a Barrister at Cloisters Chambers in
London
In the last issue Hannah Tucker offered some advice on how to effectively
select and instruct a medical expert. She now considers what practical
options are available to a claims solicitor on receipt of a medical report that
is less than satisfactory.
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27
FRAUD FEATURE
Fighting fraud
Accident investigators are the key to combating the rise in fraudulent
insurance claims, explains Jenni Marsh
M
uch has been lost during the
recession: jobs, homes and faith
in the banking system in which
we entrust money. Now it seems the
economic crisis has put another resource
under strain: honesty.
According to the Association of British
Insurers (ABI), 5.2 million of fraudulent
claims are going undetected every day a
24 percent increase on two years ago; in
2008 alone more than 730 million worth
of suspect claims were rejected.
The body reports that as insurers
become more alert to fraudsters tactics
claimants are adopting more subtle
approaches, primarily being economical
with the truth.
A YouGov Financial Services survey
commissioned by the ABI, which
interviewed 3,031 people, found that 16
percent of those asked would not rule out
making an exaggerated insurance claim.
The ABI cites one woman who claimed
for the theft of a camper van that had
been written off beyond repair 10 years
earlier; another policy-holder was rebuffed
when he claimed for a 42-inch LCD TV he
reported buying before it had even been
on the market, investigators found.
While household insurance policies are
being claimed on most frequently, it is
the motoring industry which still has the
highest levels of fraud in terms of value,
and still suffers from staged accidents.
AMATEUR OPERATIONS
Will Gaskill, a director at Robertson and Co,
a surveillance and fraud investigation rm
that helps government departments and
insurance brokers ward off bogus claims,
says the problem is exacerbated by the
credit crunch.
Everyone we speak to has experienced
increased levels of fraud and exaggeration
across all lines of their business, he explains.
Motor accidents are no exception with
more opportunistic fraud emerging, for
example, a genuine accident has occurred
but the injuries sustained or number
of passengers in the vehicle becomes
exaggerated.
His company recorded a 100 percent rise
in instructions in the seven months between
2 June 2008 and 31 December 2008, a gure
which has risen again by a further 22 percent
since the beginning of this year.
This comes at a time when, according to
the AA British Insurance Premium Index, car
insurance premiums are increasing at their
most rapid rate in a decade, with the legal
fees involved in personal injury claims placing
a growing strain on brokers.
Douglas Boulton, managing director of
forensic accident investigator rm D & HB
Associates, says that insurance rms have
physics on their side.
He explains that in many accident fraud
cases the ramications of the collision are
exaggerated to secure a more fruitful payout.
When performed by amateurs, Boulton
says this is relatively easy to spot. He cites
one case where the policyholder claimed
a vehicle ploughed into theirs at 25 mph
as they waited at a junction, pushing them
along the road.
However, he explains the damage incurred
did not support that scenario. I looked at
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29
FEATURE FRAUD
the car and there was no movement in the
damage it had to start at the front and then
move towards the back.
They dont realise that people like me
exist, the accident investigator and expert
witness notes.
They think the garage will have a look
at the car and recognise the damage. They
expect to claim. The pitfalls are at each
stage when things have happened we get
physics involved.

A NECESSARY COST
Boulton concedes, however, that his services
can be expensive. Accident investigators
charge an hourly rate and often their work
entails long journeys across the UK to inspect
vehicles. In the current climate, is it a cost
that insurance brokers can afford to pay?
It is one they cannot afford to forsake,
Boulton would argue, noting that he
has never come across a bogus accident
investigator.
Carol Snowden, of private investigation
agency Surelock, advocates prudence on
the part of insurance companies, noting
that there are normally trigger points that
highlight the possibility of fraud taking place.
Firms can then cross-reference this
information with a database of previous or
identical claims. If such checks ag up more
questions then a private investigator should
be hired, says Snowden.
She advises brokers to use a reputable
private investigation rm, noting that
Surelock has investigators who are
retired and ex police ofcers, thus having
experience in all manner of investigations
and surveillance.
CRASH FOR CASH
However, it is not only amateurs that
insurance rms have to contend with.
Gaskill says the problem is not one limited
to the consumer market.
Commercial/eet (and often sign-
written) vehicles have been targeted
by organised gangs who brake hard in
front for no apparent reason (slam-ons),
or pull away from the kerb or suddenly
change lane on a roundabout in order
to collide with the target commercial
vehicle, he explains.
Once the collision has occurred, every
possible facet of the claim is then grossly
exaggerated: the cost of repairs to the
innocent vehicle, injuries sustained by
the driver, number of passengers and their
resultant injuries.
However, the Insurance Fraud Bureau
says that organised crash for cash
network sizes have decreased by 11
percent over the last two years nationally.
But the organisation does concede that in
areas such as Liverpool, Halifax and Ilford
the problem is still escalating a concern
not only for the industry but also motorists
caught up in the unexpected and often
dangerous stunt accidents.
John Beadle, chairman of the IFB,
explains that often the revenue generated
from such scams is used to fund other
forms of serious crime, including drug
trafcking and gun running.
Insurance fraud is not a victimless
crime; criminals must be brought to
justice, he adds.
Nick Starling, director of general
insurance and health at the ABI, agrees that
in tough economic times there is no room
for leniency with accident investigations.
There is no hiding place for insurance
cheats. Honest customers should not have
to pay the fraudsters, he says.
Getting a criminal record, as well as
difculty in obtaining more expensive
insurance and credit problems await anyone
who sees insurance as a soft touch.
The ABI cites one woman
who claimed for the theft
of a camper van that had
been written off beyond
repair 10 years earlier.
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31
CREDIT HIRE FEATURE
Credit crunch time
Liz Adams looks at Copley v Lawn and Maden v Haller
I
n the two landmark cases of Copley v
Lawn and Maden v Haller, the claimants
cars had been involved in accidents by
drivers insured by KGM, who were at fault.
The claimants were contacted by KGM, who
offered to provide a free replacement car
pending repairs to their vehicles. In the case
of Maden the offer of a replacement vehicle
came before the claimant entered in to a
Credit Hire Agreement with Helphire and
in Copely the offer from KGM came a few
days after he entered into hire agreement
with Helphire.
In both cases the offer for a free
replacement vehicle was declined. The trial
involved two questions did the claimants
fail to mitigate their losses by hiring cars
from Helphire despite the offer from
KGM? If so should their claim for car hire
be completely extinguished or reduced to
the cost that KGM would have incurred in
providing the replacement car?
The Court held that the claimants had
failed to mitigate, further stating that the
cost to KGM of supplying the vehicles
was of no concern of the claimants and
irrelevant to the issue of mitigation. In
respect of the second question it was
upheld the rst instance decisions the
credit hire charges fell to be dismissed in
Madden and reduced in Copley.
THE APPEAL
The key issue in dispute was mitigation of
loss in credit hire claims. Upon hearing the
appeal, the Court of Appeal overturned the
earlier decision and, on the facts of these
cases, found in favour of the claimants.
The case is important for a number of
reasons. Firstly a claimant can reject the
defendants offer to provide replacement
vehicle where insurer does not make clear
the actual cost of the hire, to the defendant,
in order that the claimant can make a
realistic comparison with the cost he may
incur if he took up the defendants offer.
Also, if a claimant does reject defendants
offer then he does not forfeit his claim for
damages (hire charges) but is entitled to
recover at least what it costs the defendant
to provide a replacement vehicle.
As a general rule then claimants would
be entitled to recover market or spot hire
rates unless the defendant could show that
they could provide a vehicle at less than the
spot hire rate.
The Court of Appeal has given guidance
(set out in the box to the right) to assist in
minimising the level of claims in future.
This decision nds a balance between the
claimants duty of mitigation and that of
IMPLICATIONS
The best scenario for defendant
insurers remains avoiding a
claimant obtaining a credit hire
vehicle in the rst place.
Insurers should not make cold
calls to claimants offering
replacement vehicles.
Any written information provided
to claimants should be in clear and
simple terms and should make
absolutely clear the cost to the
insurer of hiring a replacement
vehicle.
Claimants who unreasonably reject
offers of replacement vehicles
will still be able to recover what
would have been the cost to the
defendant insurer of the hire.
This decision nds a
balance between the
claimants duty of
mitigation and that of the
defendant to compensate
the innocent party
the Defendant to compensate the innocent
party for the cost of a replacement motor
vehicle. The key point that claimants and
their agents have a duty to take reasonable
steps to mitigate and the duty is no longer
excessively onerous on the claimant.
a i d i n g r e c o v e r y i n e v e r y s e n s e
Treatment delivery in accordance with evidence based medicine
Physiotherapy, Osteopathy and Chiropractic Treatment
Immediate Needs Assessment Reports
Case Management
Vocational Services
Return to Work programmes
Medical Assessment covering all medical specialties (via Doctors Chambers)
MRI and CT scans
Complete Radiology, Pathology and Diagnostic Services
Diagnostic Arthroscopy
Comprehensive range of surgical procedures
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33
FEATURE HOUSEHOLD CLAIMS
W
ith fraudulent household
claims on the rise, insurers
are increasingly looking to
outsource elements of the claims process
to help identify honesty and detect
fraudulent claims.
Put simply, there are only two types of
claims those you should pay and those
you should not. Determining which is
which has, and always will be, problematic.
In a survey conducted by the Association
of British Insurers (ABI), 1 in 10 adults 5
million people admitted to having made
a fraudulent claim on a general insurance
policy. Varying degrees of sophistication
have emerged amongst insurers in recent
years for combating the signicant risk
of insurance fraud, with varying levels
of success and the current recession is
really putting these skills to the test.
Redundancy, lack of available credit,
negative equity or simply greater
caution towards the nancial future
are just some motives for previously
honest policyholders to consider making
dishonest claims. Why, for example, buy
a new carpet or upgrade the television
when you can simply make out there has
been some form of accident in the home
and claim against your insurance? This
places an even greater burden on insurers
and their agents to ensure that only
honest claims are compensated.
One of the most notable and successful
additions to the claims handling toolbox
in recent years has been that of cognitive
interviewing. The premise of cognitive
interviewing is simple every claim
has a story to be told surrounding its
circumstances and the very clues as to
whether a claim is genuine or not lie
within that story. So, unlike the more
traditional claims handling methods
employed by insurers, whereby the
claimants prole or postcode was the
determinant of risk, insurers should
actually focus on the claim, rst and
foremost.
For many, the term cognitive
interviewing simply suggests a telephone
interview process. However, fraud
management skills, customer service
skills and cognitive interviewing can
be combined into a single streamlined
procedure to provide the most effective
claims process in terms of cost and the
deterrent and detection of fraud.
DEVELOPING
COMPETENCIES
The key word here is skill. It is not
simply a case of sending claims handlers
on a training course, but engendering a
genuine competence. As with all skills, this
competence degrades over time unless
regularly coached and quality assured, so
support mechanisms need to be in place
from the outset in order to maintain the
high standards expected from clients.
In light of this required commitment
to ongoing investment in training and
development, it might make sense
for insurers to outsource their claims
management process to a company that has
the required skills, assumes the burden of
nding the right staff, and regularly trains
and coaches its people.
The ABI has recently announced new
statistics stating that insurance fraud is
now costing the industry 1.9 billion per
year (previously 1.6 billion) and adding
on average 44 (previously 40) to every
premium. Even before the gloomy impact of
the credit crunch, the consumerist age was
already upon us, whereby fashions, styles
and fads quickly come and go. So, the living
room or bathroom that was so painstakingly
designed and installed two years ago has
been superseded by new ideas or gadgetry
and the pressure to change or upgrade
through the household insurance policy
has certainly become a more prevalent
consideration than ever before.
Given that this consumerist mentality
still prevails (despite the credit crunch) and
we are facing a gloomy 12-month economic
forecast in the UK, it is essential insurers
employ the best tools available to identify
and manage away fraudulent claims.
Cognitive interviewing is the sharpest tool
in the box!
Jon Day is Head of Operations at TCF Corporate
Thinking it through
Jon Day looks at the role of cognitive interviewing in combating the increase
in household claims
Proclaim is the market-leading Case
Management Software system, in use by
over 10,000 individuals. Clients include:
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MSL Legal Expenses
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FEATURE
35
C
laim 2 Gain offers a specialist
claims handling service for victims
of mis-sold nancial products
and services. The rm deals purely with
nancial complaints, with focus on
endowment policies, bank charges, and
PPI (payment protection insurance). Claim
2 Gain implemented Eclipses Proclaim
Case Management Software in late 2007,
as the rms existing system, which was
not specically designed for dealing with
claims, was beginning to struggle under the
weight of new instructions received.
TAILOR-MADE
Every stage of our claims handling
procedure has been mapped and
translated into an onscreen workflow. The
system has an integrated editor which
means that we can tailor and fine-tune
processes to a very exacting degree. We
now have a system that automates as
much of the case handling process as
possible, and this has brought a new level
of accuracy to what we do.
When we installed the software, our
staff had little or no knowledge of system
design or business analysis. However,
using its inbuilt toolkit, we were able to
effectively build a completely bespoke
system from scratch. For example, when
it was installed we were not dealing with
some types of claims and have since had
to build these processes from the ground
up. The task has always been blissfully
simple. By building the system in this
manner, we have given ourselves a huge
range of freedom. With other software
that Ive used, its been a case of make
do and mend not so in this case: we
can get the software to work precisely
around our needs we do not have to
compromise.
One of the biggest advantages is that
decisions about what can and cant be done
are not made by disconnected IT people,
miles away from us. Our staff the actual
end-users can have control over what
they want the software to do. Just because
something looks good on paper, it doesnt
necessarily mean it will work on a computer
screen we have the power to tailor the
system and quickly experiment with
alternative solutions and ways of tackling
procedural issues.

DAY-TO-DAY BENEFITS
In short, our staff are working more
efciently, the claims process is speeded up,
and our clients are getting a better service!
Since implementing the case management
system, we have seen clear and dramatic
improvements in our day-to-day running
of the business. The complete exibility
of the software has meant that if we want
the system to do something, we simply
work out what we want to happen and then
implement it accordingly.
When a claim is started, we can now be
assured that actions will be taken once
there is no duplication of effort, and
we have a much higher level of accuracy.
We no longer have to rely on our claims
handlers having individual knowledge of
each and every provider and their different
procedures. If one type of claim needs to
be sent on to one particular address, and
another type of claim sent to a different
address, the software knows this already
and our claims handlers avoid having to
choose from a bewildering list of addresses
and contacts.
Automated administrative routines
mean that we send the correct
information, in the correct format, to the
correct place the very rst time. Gone are
the days of to-ing and fro-ing between
different departments and then suffering
rejection because a tick was put in the
wrong box!
STRATEGIC FIT
Our ethos is one of speed, clarity and
accuracy. Our case management software
has allowed us to give clients more
information, more quickly and in a format
that they can understand. By building
our system in line with our preferred
methods of working, we have been able
to fine-tune the way in which we relay
information, and retain the flexibility
to make fast, reliable changes to our
service offering. As new lines of claim
opportunities have presented themselves
(such as PPI), so we have been able
to grow our system and maintain
impeccable standards of accuracy and
client communication.
We are now more condent than ever
that any new claims process whatever
this may be can be dealt with, and we can
move forward with the condence that our
system will keep pace with the market.
FUTURE PLANS
In the short-term we want to take more
advantage of the softwares online facilities,
and plan to implement the FileView online
case-tracking tool. This will enable our
clients to view automated updates on the
progress of their claims via the internet,
whenever they want, rather than just when
we are available.
Our long-term plans are always evolving,
and we will always be investigating likely
claims developments. We envisage the
case management system being at the
very core of what we do for as long as we
are managing claims the system will
grow and develop with us.
Choosing and installing any type of core
software system is a daunting task. However,
had I known what the benets would be, I
would have done it years ago!
Matt Whiting is director of Claim 2 Gain.
Claim 2 Gain
Forward-thinking claims organisation stays one step ahead using case
management software, says Matt Whiting
PROMOTIONAL FEATURE
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scphsLcaLcd cans cpcraLcns rcy cn NLOS` 8ccausc
Lhcy kncw LhaL - nc naLLcr whaL Lhcr husncss ccus, Lhcr
cusLcncrs, cr Lhcr ccaLcn - NLOS Cans w addrcss Lhc
unquc nccds c Lhcr nsLLuLcns ncw and n Lhc uLurc.
II^EUS Claims
Choson hy Insurors
Around iho Vorld
fineos.indd 1 12/2/09 09:42:51
FEATURE TITLE FEATURE
37
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vsL www.NLOS.ccn cr cna us aL ncCNLOS.ccn
Why dc sc nany c Lhc wcrd's ncsL succcssu and
scphsLcaLcd cans cpcraLcns rcy cn NLOS` 8ccausc
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cusLcncrs, cr Lhcr ccaLcn - NLOS Cans w addrcss Lhc
unquc nccds c Lhcr nsLLuLcns ncw and n Lhc uLurc.
II^EUS Claims
Choson hy Insurors
Around iho Vorld
fineos.indd 1 12/2/09 09:42:51
CLINICAL NEGLIGENCE FEATURE
Death by indifference
Rita Pal reports on the poor standards of treatment for the vulnerable
I
n 2007, Mencap released a report on
institutional discrimination in the NHS.
Death by Indifference showed how
six people with learning disabilities died
unnecessarily. The report revealed appalling
levels of discrimination, abuse and neglect.
Prior to this, the 2004 Treat Me Right
campaign exposed unequal healthcare. In
2006, the Disability Rights Commission
(DRC) released a formal investigation
into the physical health inequalities
experienced. The investigation showed that
people with a learning disability receive
fewer screening tests and fewer health
investigations. The overall conclusion was
that people with disabilities were less likely
to obtain the care they required.
Following these cumulative ndings,
the government requested a detailed
investigation into to the six cases via the
Parliamentary and Health Ombudsmen.
In March 2009, they published a damning
indictment of appalling care. The report
makes recommendations aimed at
changing underlying attitudes on a
lasting basis. These include actions for
the NHS and social care organisations in
England and for those responsible for the
regulation and inspection of health and
care services.
An independent inquiry into the health
care of people with learning disabilities
was also commissioned. Sir Jonathan
Michael, chair of the inquiry, published
his ndings in July 2008 in a report called
Healthcare for all (www.iahpld.org.uk). He
said, It was shocking to discover that the
experiences of the families described in
Mencaps report are by no means isolated,
despite a clear framework of legislation
against discrimination.
An additional study The Human Rights
Act Changing Lives (2008) conducted by
the British Institute of Human Rights (www.
bihr.org.uk) showed that vulnerable people
continued to suffer inhumane treatment in
social care and health services.
In February 2009, the UK government
signed up to the United Nations Protocol
on the Rights of Disabled People. Disabled
people will now have the opportunity to
take their case to the UN if they feel their
rights have been breached. Covering all
aspects of life, including health, education,
employment and access to justice, the
UN Convention on the Rights of Persons
with Disabilities (UNCRPD) reafrms that
disabled people have and should be able
to enjoy human rights on an equal basis
with non-disabled people.
LINKS THE MAIN REPORTS
Death by Indifference
www.mencap.org.uk/case.
asp?id=52&menuId=53&pageno
Treat Me Right Report
www.mencap.org.uk/document.
asp?id=316
Health Inequalities. DRC
Investigation
83.137.212.42/sitearchive/DRC/library/
health_investigation.html
Ombudsmans Reports Six Lives
www.ombudsman.org.uk/improving_
services/special_reports/hsc/six_lives/
overview_report.html
Human Rights Act Changing Lives
www.bihr.org.uk/sites/default/les/
The%20Human%20
Rights%20Act%20-%20Changing%20
Lives.pdf
Healthcare For All The Inquiry
www.iahpld.org.uk
Disabled people will now
have the opportunity to
take their case to the UN
if they feel their rights
have been breached
THE LAST WORD
38
Eyes of the Pharaoh
Vitek Frenkel explains how forensic accountancy can play a vital role in
litigation and insurance claims
W
hat is a forensic accountant?
To a fan of the television
programme CSI, the term
forensic accountant may conjure up an
image of a person in a suit carefully
making their way around a crime scene in
a disused warehouse, inputting numbers
into a calculator.
While our job isnt quite as ashy as
those investigations in CSI, the services
that forensic accountants provide to the
claims management industry are often
crucial in helping litigation and insurance
claims reach a satisfactory conclusion.
Forensic accountancy is not a new
profession. In ancient Egypt, the nanciers
who accounted for all of the Pharaohs assets
were known as the eyes and ears of the
Pharaoh. The rst time a forensic accountant
appeared in court was in Scotland in the early
1800s, when an accountant was required
to give evidence at a bankruptcy hearing.
Forensic accountants played a major role in
bringing down Chicago mobster Al Capone
for tax fraud and more recently have been at
the fore of corporate scandals such as Enron
and Madoff.
INVESTIGATIVE
ACCOUNTING
The word forensic is dened in the
dictionary as used or applied in the
investigation and establishment of facts or
evidence in a court of law.
We use a combination of accounting,
investigative and legal skills to provide an
accounting analysis that is suitable to the
court, and will form the basis for discussion,
debate and ultimately dispute resolution.
Forensic accountants provide services in
the following areas: contractual disputes,
commercial disputes, fraud and divorce.
One of the key areas of forensic
accountancy is personal injury. While much of
the personal injury work relates to road trafc
accidents, it also includes clinical and medical
negligence; harassment and racial and
sexual discrimination in the workplace; and
industrial diseases. Pension losses are a key
head of damage and we advise on these cases
regularly, often on a joint instructions basis.
DE-MYSTIFYING FIGURES
It is the role of a forensic accountant to
understand that the claims management
industry is not as accustomed to dealing
with numbers as we are. Terms like
multipliers, pension losses or lost years
claims can be overwhelming and confusing.
In our work, it is essential that we get to
the heart of the matter and set out a clear
report of our ndings. We present complex
nancial and business-related issues in a
manner that is both readily understandable
and properly supported.
Our brief is the same for each case:
understand the numbers, and then make
them understandable to those who have
instructed us.
CASE STUDY
The following case highlights the way
in which a forensic accountant can
provide the expertise to assist the claims
management industry.
We were instructed on a joint basis to
assess the loss of earnings of a builder
and supplier of materials who had been
off work for several months following
a fall. He was the sole shareholder of
a successful company that turned over
some 1,500,000 per annum.
A claim had been prepared on behalf
of the claimant by his own accountant in
the sum of 45,000. The defendant did
not accept the level of quantum as set
out and was concerned about the lack of
independence of the accountants who had
set out the loss.
There were various factors that needed to
be investigated. There was clear evidence
that the gross prot of the business had
declined over the affected nancial year.
However, some of the costs claimed related
to an employee who allegedly ran the
company in the claimants absence, but
the position was unclear as she had been
paid by the company prior to the accident
and she subsequently married the claimant
during the affected period.
Also, the accountants hadnt made full
provision for tax as the claimant operated
through a limited company and full account
needed to be taken of corporation tax and
higher rates of income tax on the lost dividends.
On detailed analysis we concluded that
the claimant had lost some 17,000 by way
of loss of earnings.
When we called a few days after
reporting to see if the parties had received
our report we were advised that the matter
had already settled at the 17,000 that we
advised. Both parties were pleased to have
had a prompt and independent assessment
of all of the issues and with this information
they were able to conclude a speedy and
satisfactory settlement.
BEHIND THE NUMBERS
Forensic accountancy may have taken on
different guises since the times of the
Pharaohs, but our job has essentially always
been the same. It is up to us to understand
the facts behind the gures and use our
experience and expertise to make your job
as simple as possible.
Vitek Frenkel is forensic manager at Frenkels Chartered
Accountants.
CONTACT DETAILS
Vitek Frenkel, Churchill House,
137 Brent Street, London NW4 4DJ
Telephone: 020 8457 2929
Email: vitek.frenkel@frenkels.com
Web: www.frenkels.com

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