Katy Dowell
Insurance giant Zurich is to establish a hitlist of personal injury (PI) firms in a bid to crack down on claimant practices that bring exaggerated costs orders against it.
The insurer has fired a warning shot to claimant PI firms after it successfully won a test case against claimant firm Delta Legal, which was found to be exaggerating costs by an average of £3,000 per case.
Delta Legal has approximately 100 bills in the legal system at any one time. The average legal costs claimed on cases dealt with by Zurich’s defendant firm Beachcroft are approximately £10,000 per case, which means Delta Legal has claims in the system of approximately £1m per month.
Zurich UK technical claims manager Steve Thomas told The Lawyer: “We’ve decided to take court action to stamp out this behaviour and reduce unnecessary claims costs.
“When for every pound we spend on damages a further 93p goes to lawyers in legal costs, it’s time to take definitive action. This case is intended to send a strong message to legal cost negotiators that, if a bill is dishonest, we’ll take the matter to court without hesitation.”
Thomas said Zurich would now look to build a national database to track claims costs in a bid to pinpoint problem areas.
The insurance market had refrained from taking legal action against claimant firms after the Ministry of Justice (MoJ) proposed sweeping reforms of the PI sector in May 2007.
However, the watered-down nature of the MoJ proposals, which will now only apply to motor-related claims rather than to
all employers and public liability claims, has spurred insurers into action.
Readers' comments (1)
Paul Nicholls | 27-Aug-2008 6:01 pm
Are the insurers knights in shining armour?
Hardly. I am a PI lawyer of early 25 years experience and have to say that I consistently and constantly write to insurers asking them to mediate, phone me, settle, meet me. The usual reply is deafening silence. I warn them about their conduct and am forced to issue proceedings in the hope I will speak to a grown up.
If the insurers want reasonable costs - act reasonably, or sack the sixteen year old kids on keyboards who are utterly useless at processing claims. Is it any wonder that the insurance bills have gone up when decent, experienced staff are sacked? The invention of the unqualified, inexperienced costs muppets have added yet further fuel to the fire. I often end up having to process matters to detailed assessment arguing with some idiot who has little or no clue about costs, only to be met, at detailed assessment by someone who knows what they are talking about shuffling their feet and grimacing about the fact that their points of dispute are abandoned. Add another £2 - 3,000 to the bill, it's just ridiculous.
If insurers want to settle costs properly, get the experienced claims staff back, send a claims inspector out to discuss matters, and stop farming your costs work out to unqualified, inexperienced kids. Pay your Defendant lawyers better rates than the local plumber too...
Zurich 'cracking down' ? Don't make me laugh, it's enough to get a written response within a fortnight.
Open call to Zurich - will you mediate your claims? I'm game.
Unsuitable or offensive? Report this comment