Dominic Clayden: Norwich Union

He may not be universally loved in the insurance claims industry, but there’s no doubting the influence of Norwich Union’s Dominic Clayden. By Katy Dowell

Dominic Clayden is well known by the insurance law firm fraternity for his outspoken and opinionated personality.

Like marmite, he divides opinion, with claimant personal injury (PI) lawyers often suspicious of his insurer ways, while defendant lawyers herald him as a pioneer. Above all he is a straight-talking insurance man who uses his legal background to set company claims policy for the country’s largest insurer.

Norwich Union’s claims department pays out billions in liability claims every year. Clayden is responsible for determining which of those claims it pays.

As director of technical claims for the insurance sector leader, the Government also takes his views seriously. So when the Ministry of Justice (MoJ) put together its reform proposals for the PI sector in April, Clayden was at the forefront of discussions.

Norwich Union’s power to thwart cases that could earn claimant lawyers significant sums is one reason for Clayden’s unpopularity within the claimant profession.

Earlier this year, the House of Lords ruled that sufferers of pleural plaques, an asbestos-related condition with no physical effects, were not liable for compensation. The ruling closed the door on 14,000 potential claims worth an estimated £25m.

Clayden was in negotiations with high-ranking Government officials throughout the case, making clear the implications of such mass claims for the insurance sector.

It is Clayden’s ability to negotiate with people on all levels, from policyholders to lawyers to Government ministers, that has elevated him through the ranks.

He studied at the University of Surrey, Guildford, before joining London & Edinburgh, which was acquired by Norwich Union in 1997.

Since his appointment as director of technical claims in 1997, Clayden has seen the value of compensation increase, while the number of claims being brought has dropped. At the same time, legal fees have escalated under the Woolf reforms, and for every claim Norwich Union now pays, 40 per cent goes to the claimants’ legal fees.

Norwich Union is now on an economy drive – chief executive Igal Mayer announced a £300m cost-reduction programme earlier this year – and Clayden is under pressure to get the most from his multimillion-pound budget in the claims department.

Not easy considering the MoJ also wants Norwich Union to lead the way in reforming the PI process by investing heavily in technology and resources to cope with the changes aimed at speeding up the PI system and driving down legal costs.

Clayden is used to balancing pressures. He has to dismiss claims while attempting to remain on good terms with claimant solicitors. He has to pull up under-performing defendant lawyers and balance the needs of the company with the demands of Government.

One way of controlling costs will be through a review of Norwich Union’s external panel of defence lawyers, launched late last month (The Lawyer, 3 December).

“We’re conscious we haven’t done a review for a while. It will be supported by our supply chain management team,” says Clayden. “It is in part anticipating the changes introduced by the MoJ.”

It is Norwich Union’s first panel review for five years. All 40 existing defendant firms will face assessments on their ability to work on cases within strict timelines as Norwich Union aims to streamline costs.

Meanwhile, under plans for PI reform the MoJ will introduce a timetable outlining how long insurers have to admit liability in PI claims. It will also fix costs for solicitors on a national scale. And Clayden has secured a much-sought-after place on the MoJ’s costs committee, much to the dismay of the claimant lawyer lobby.

Clayden will likely be lobbying to slash the 40 per cent Norwich Union currently pays in costs on every claim in a bid to set a precedent for the insurance sector.

He will spend most of 2008 preparing Norwich Union for the sweeping changes. “We will have to step up,” he admits. There will be multimillion-pound investment from insurers and PI lawyers in reforming the process, with Norwich Union leading the charge.”

Under the MoJ reforms insurers such as Norwich Union will have 15 days to assess liability in road traffic accident (RTA) cases and 30 working days in liability cases. This means it will receive claims notification earlier and will instruct lawyers to act on disputed claims within those timeframes.

As a result, Norwich Union plans to introduce a single point of contact for all claimant lawyers to cut through red tape. “It is no good having early notification if it is going to the wrong office. So we have to centralise the notification point and have a dedicated team working on liability.”

Although his ’Mr Nice Guy’ persona has won him many influential friends, Clayden is not shy about attacking claimant lawyers. He is angry that the small claims limit remains at £1,000 despite Norwich Union calling for it to be raised to £5,000. The bulk of claims are RTA claims worth an average £3,000, which he says do not need legal representation.

“Claimant lawyers are being paid money for old rope on those claims,” he argues. “Insurers are almost always liable and there is no need for investigation. The majority of road accident claims are simple and straightforward and assessing damages is not difficult.”

Next year will present Clayden with pivotal challenges as he attempts to steer Norwich Union through a raft of reforms. Claimant lawyers will be ready to attack the insurer for failing to heed claimants, while defendant firms will battle for a place on the insurers’ panel. Clayden will be able to manipulate his marmite personality to get the best out of all those who love – and hate – him.

Name: Dominic Clayden
Organisation: Norwich Union
Title: Director of technical claims
Sector: Insurance
Reporting to: Norwich Union chief executive Igal Mayer
Operating profit: £560m
Legal capability for claims department: Six
Annual legal spend: Around £10m-£15m
Main law firms: Beachcroft, Berryman Lace Mawer, Hugh James, Keoghs, Morgan Cole
Dominic Clayden’s CV
Education:

1988-93: Biochemical engineering, University of Surrey, Guildford
1993-95: CPE
Work history:
1995-97: Legal adviser, London & Edinburgh
1997-present: Director of technical claims, Norwich Union (acquired London & Edinburgh)