Blog: Claims and Fraud – Collaboration will end the zero-sum game

Will the Post Claims and Fraud Summit on 21 November serve as another arena for the claimant and defendant sectors to go another nine rounds of verbal fisticuffs? Michael Lynch, head of insurance partnerships at Minster Law, offers his views.

I genuinely hope not. It’s high time that the long-held views of cynics on both sides of the claimant and defendant divide are dispelled, to create the space for a different kind of conversation.

Claimant firms are accused of simply wanting more claims, and aren’t particularly picky where they come from, because the more claims they have, the more money they make. Right?

On the other hand, insurers are charged with only wanting to reduce claims to protect their balance sheet and use the ‘facts’ of unacceptable fraud to shamelessly raise premiums, boost profits and screw customers. Right?

Wrong. The truth is that, for insurers and claimant law firms that are genuinely focused on achieving positive customer outcomes, neither of these statements hold much water, but never-the-less continue to contribute to what can only be a zero-sum game and a lose-lose for customers.

Everyone should be in business to protect customers when things go wrong (insurers) and support customers when things go wrong (claimant firms). The difference between protect and support is about as wide as a cigarette paper. In other words, we all ultimately aspire to achieve the same thing.

Fraud is just plain wrong. There is a need for everyone to play their part, along with insurers and customers, to tackle fraud at its source. It’s a popular misconception that all claimant law firms are the same, but many in the market actually strive for collaboration. By ending the tendency for insurers to apply a broad brushstroke to the claimant sector, it is possible to work together to better tackle fraud for the benefit of the public.

Claimant law firms want to and can help insurers put rogue claimant firms and their claims management company counterparts out of business.

Employing a ‘litigate at any cost’ approach is not right instead the priority should be reaching the right outcome for the customer and that can more often be achieved by working closely with the insurer.

In the now well-trodden zero-sum game debate, our sectors are in danger of forgetting that there is a shared and common purpose – customers. So, let’s work together to stamp out the plague of fraudulent claims, to get insurance premiums lower for the huge number of honest people that look to us all when accidents happen. And in the process, let’s stop vilifying honest customers when they do make a claim - that’s what insurance is for after all.

While welcomed and necessary, the Civil Liability Act symbolises our collective failure when it comes to our customers. A failure to see some years ago that the system for managing personal injury claims needed to change. Some claimant firms had too much to lose, and were making too much money from the status quo to ever entertain the idea of evolution.

Working together, we should have been able to reach a consensus on the best way forward for customers, but instead the government has stepped in, and the extended scope and outcome of reforms risks disaster for the very people we all say are our top priority.

With reforms and the introduction of the new Litigant in Person portal on the horizon, there is a pressing need to formulate a fresh approach and work together to deal with the potential of increased fraud, for the sake of honest, genuinely injured customers. 

Above all we need to change the claimant v defendant record. The adversarial system within civil justice is fast becoming obsolete – thanks in part to technology – and, in lower value injury cases, is being increasingly replaced by algorithms and protocols. At the very least, these can serve as the common ground upon on which we can build a better, more collaborative approach to fraud prevention.

Claimant law firms want to chart a new course, with collaboration as a given. Does the rest of the industry want the same?

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