Insurers call for deafness fixed fees, as MASS chief warns over their attitude to dishonesty rule

The insurance industry is calling for the claims portal to be replicated for industrial deafness claims, along with fixed costs, as it steps up its attack on the growth of noise-induced hearing loss litigation.

This article first appeared in Litigation Futures, 7 November 2014

The Association of British Insurers (ABI) said that in March 2014, 3,500 notifications for industrial deafness were made to the Compensation Recovery Unit, a 350% increase in two years.

Speaking at a conference organised by Weightmans earlier this week, James Dalton, the ABI’s head of liability, said: “Introducing fixed recoverable costs is key if we are to get a grip on disproportionate legal costs that have led industrial deafness to become the new cash cow for some claimant law firms. The £3 paid out in legal fees for every £1 an insurer pays in compensation must be reduced…

“As well as reducing legal costs, as these claims usually involve multiple defendants and therefore multiple insurers, we need to seriously explore if the existing claims portal can be adapted to deal with multi-defendant claims, or if there is a need for a stand-alone portal for deafness claims to reduce the 17 months that it currently takes to settle a typical industrial deafness claim.”

Earlier this week a specialist construction insurer said it had seen a “staggering” increase in deafness claims.

MASS chief warns over their attitude to dishonesty ruleMeanwhile, the new chairman of the Motor Accident Solicitors Society, Susan Brown, has today expressed her concern about insurer behaviour once the provision on “fundamentally dishonest” claims in the Criminal Justice & Courts Bill is passed into law.

This will require a court to dismiss a claim where it is satisfied that the claimant has been fundamentally dishonest, unless it considers the claimant would suffer substantial injustice.

Speaking at the MASS annual conference in Manchester, Ms Brown – director and head of personal injury at London firm Prolegal – said: “The nuances around how this provision will be interpreted by the judiciary may be interesting for lawyers, but the major impact of this will not be on what happens in court but on the behaviour of insurers and their lawyers.

“Allegations of dishonesty or exaggeration are already raised on a regular basis with a view to persuading claimants either to abandon their claims altogether or more often to accept a low offer rather than face the ordeal of having to prove that they are not dishonest and run the risk that a judge will not believe them.

“The potential windfall for insurers, who may be able to get out of claims not only without paying the claimant anything at all, but also having their own costs paid by the claimant, will make them look very carefully for any sign of dishonesty or exaggeration. It seems highly likely that we will see the allegation raised far more often.

“And how many honest claimants pursuing genuine claims will be prepared to take the risk of proceeding to court if the possible outcome is that they will come out with nothing other than a bill for the insurers’ solicitors’ costs? We will have a fight on our hands when acting for these claimants, to support them and gather the evidence needed to demonstrate that they are not dishonest.”

More broadly Ms Brown argued that the current costs regime makes it less likely claimants will have access to justice. “I certainly now find myself turning away claims that I would in the past have taken on whether as a legally aided claim, or under either a pre-1999 or pre-LASPO CFA.”

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