ILC ARTICLE

Motor Claims Festival – Legal Q&A with Craig Budsworth, Donna Scully, John Gibson and Samantha Ramen

9th July 2020

1.     LEI providers have previously said they need 12-18 months to develop new policies, when they know the new rules. Does that panel see the lack of new rules as a threat to rolling out in April 2021? – practically speaking, and in a consumers best interests, a policy purchased should know what it is going to cover and until the rules are written, this is impossible.  However, I do not think the MoJ will let that be a barrier to implementation and LEI policyholders may well find they have a policy that doesn’t meet their requirements.

Samantha: Agree that the MOJ won’t let this delay implementation although in February this year (at the London MIB seminar) Richard Hutchinson did commit to looking at publishing more details ahead of time to enable stakeholders to prepare. However, we have not heard further on this point.

Craig: practically speaking, and in a consumers best interests, a policy purchased should know what it is going to cover and until the rules are written, this is impossible.  However, I do not think the MoJ will let that be a barrier to implementation and LEI policyholders may well find they have a policy that doesn’t meet their requirements.

2.     In the current environment should the legal be looking at ways to help insurers avoid litigation and ensure claims are settled quickly? Do you think technology can play a part in that, eg images to cut down delays? – from experience, the best way for insurers to avoid litigation is communication and the law already provides for this, just unfortunately, resource capacity does not always match expectations.  More parties are now exchanging information electronically than ever before which is undoubtedly reducing litigation when there is communication.

Samantha: Technology can certainly help to play a part in aiming to settle genuine claims more quickly; I echo Craig’s comments about technology enabling better communication resulting in litigation reduction.

Craig: from experience, the best way for insurers to avoid litigation is communication and the law already provides for this, just unfortunately, resource capacity does not always match expectations.  More parties are now exchanging information electronically than ever before which is undoubtedly reducing litigation when there is communication.

John: I think the motor industry generally could improve use of images on a whole host of points from vehicle damage, accident location, or road conditions. They do assist claims handlers understand the case on either side. The lockdown period has contributed to a greater need for images to assess vehicles, assist liability decisions, or understand if a vehicle is still able to be used. Often such images do assist in narrowing issues later down the line so I’m all for wider use of them in negotiation.

3.     With the long delays to the legislation would we be better off having a foot on the ball moment and starting again? It was never a very elegant solution and its getting less elegant by the day. – That would be lovely!  Can’t see that happening though.

Samantha: Agree – the MoJ have stated they will press ahead with this and despite numerous delays thus far this remains on the Conservative Govt policy agenda.

Craig: It was never a very elegant solution and its getting less elegant by the day. – That would be lovely!  Can’t see that happening though.

Donna: Any major change is likely to be imperfect, but the “solution” proposed does appear to be getting worse by the month. A major rethink, which would include credit hire and rehab, is certainly desirable but highly unlikely given the circumstances.

4.     We’ve seen market data that average hire periods are up 7-8 days – are you seeing this? – only if you look at a very small period of time which will undoubtedly level out now bodyshops and dealerships are open again.

Craig: only if you look at a very small period of time which will undoubtedly level out now bodyshops and dealerships are open again.

John: There’s so many variables, we wont truly understand the overall impact until all claims are presented. It’s inevitable periods will be longer through this period in many circumstances; but equally frequency has reduced, and vehicle mitigation may have increased. Will take some time to wash through.    

5.     A question for Donna, do you think the LIP portal will make it easier for people to submit fraudulent claims?

Donna: Regrettably, nothing I have seen over the last two years has made me change my mind. A frictionless claims system with fewer checks and balances will inevitably lead to increased levels of fraud, although the reduced sums involved may make this an acceptable outcome for insurers.  Also CMCs cannot access the present portal but they will be able to access the new LiP Portal so I see that as an avenue in for bad CMCs to target, coerce and game clients making motor claims.