A long time ago... well actually around this time last year... we commented that Low Speed Impact claims (under their variously named guises) had suffered a rough time.
We suggested that, as an industry, both insurers and solicitors alike had taken a route based predominantly on obtaining costly expert forensic engineering and medical evidence. The article asked whether that approach was perhaps an overly expensive hammer to crack nuts that are, at the end of the day, personal injury claims valued at the lowest end of the JC Guidelines.
In responding to such market change and demand, we re-engineered our approach to the management of LSI claims. The resultant success clearly illustrates Damian’s Jedi-like qualities of foresight and, more importantly, shows that insurers can absolutely and efficiently manage LSI claims in a proactive, yet cost-effective manner.
It also demonstrates the potential for high levels of pre-litigation repudiations and positive case outcomes at trial; with our strategy delivering demonstrable fraud savings and, most importantly, reductions in overall indemnity spend.
Our approach is based on the fact that LSI cases contested in the court room are invariably not won with expensive expert evidence but with strategic defences that are based on credibility, good quality images of the vehicle damage (or lack thereof), and witness testimony. The evidence of the insured driver is key given that, whilst the insurer is footing the bill for these opportunistic and fraudulent claims, it is the innocent motorist who often feels most aggrieved by the entire situation.
As a result Keoghs’ strategy for dealing with such LSI claims is focused around the three sides of the LSI triangle:
The challenge in defending such cases is early identification and evidence gathering. A front loaded investigation approach with the sole intention of either forcing a claimant to the door of court or repudiation ensures that, within a matter of days after a collision, the insurer is armed with all of the evidence required for repudiation and thereafter, that the insurer is litigation ready if necessary.
Similarly, in those cases where the evidence is not available it ensures that claims aren’t wrongly repudiated and that a swift and early settlement can be achieved. Lifecycles can be kept low and overall indemnity spend reduced to below the level of average portal spend that would otherwise have been incurred had the LSI issue not been tackled and the claim simply settled in the portal.
The purpose of the early identification of such cases and the swift triaging and obtaining of evidence is to drive behaviours across the industry, making it clear that these speculative personal injury claims will be challenged.
Claimants are emboldened by the promise of a quick payment of damages or, as was often the case with such claims, the payment of damages prior to the obtaining of medical evidence. If speculative claims go unchallenged, claimant behaviour patterns remain unaltered.
Similarly to Ben Leech’s article on LNC, if a claimant is required to prove and provide evidence in support of a speculative claim, the process becomes more involved and requires them to give serious consideration as to whether or not they have the desire to be robustly cross examined at a final hearing.
Our approach is therefore geared to delivering an early, proactive and evidence based assessment of the claim in order to support defensible repudiations pre-litigation, ideally at the end of Stage 1 of the portal process.
By bringing forward the decision point, and making informed decisions on claim defensibility, our approach effectively means that the claimant and their representatives are faced with two very stark decisions – either take the exit or head to the witness box.
In a climate where claimant solicitors do not wish to invest in dead-end cases or incur disbursements (particularly ever increasing court fees) on claims where their prospect of a successful recovery is low, we frequently see the claimant simply opt for the exit door with no payments made, whether in damages or costs.
This strategy is providing insurers with real results and significant savings on indemnity spend.
The results speak for themselves, with a successful pre-litigation repudiation rate of up to 78%, average savings of £1,352 for every claimant identified through the LSI process and low litigation rates. Indeed one insurer has seen litigation rates on LSI claims fall to an all-time low of 4%.
On those cases that do litigate however, the defendant’s stall has already been set out. The claimant knows the case they are going to be asked to meet at the earliest point prior to litigation being issued, thus ensuring the defendant is on the front foot in terms of the defence of the claim, driving specific disclosure and the raising of necessary questions to the claimant’s expert.
Thereafter the court is invited to make a determination based upon the evidential factors identified in the LSI Triangle above.
The question is one of fact; “was this claimant genuinely injured in this accident?”
The answer to that question no longer requires expert evidence or significant spend on lengthy and cumbersome investigations. It requires oral testimony, images of vehicles and contemporaneous evidence as to credibility.
The LSI Fightback hasn’t just awakened, it is well and truly here.
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