MoJ Jackson Reforms Summary

The Jackson Review of civil litigation relating to low value injury claims came into force in April. Intended to bring better balance to the system the reforms represent a step change to the personal injuries legal framework. We have produced a summary of the changes that will have the biggest impact on your clients.

The aims of the reforms are to bring more balance to the civil litigation system by:

• Addressing the growing compensation culture 
• Creating an environment where claims costs savings will feed into lower premiums
• Delivering lawyers costs that are more proportionate 

The changes that will be more apparent to consumers are:

After the Event legal expense premiums will not be recoverable 
After the Event insurance was the preferred method by which no-win no-fee solicitors were able to offer these services. It was used to underwrite their costs should the litigation they undertook on behalf of a consumer fail. Consumers are likely to see fewer firms offering no-win no-fee services - indeed many have already exited the market.

Banning referral fees 
The payment of referral fees was endemic before the changes. In the new environment referral fees will no longer be legal.

Limits have also been placed on claims quantum, particularly with regard to injuries such as whiplash.

How will these changes affect your clients?
The most important change for claimants is the requirement that they provide fast and accurate claims notifications, including:

• Immediate notification of claims or intention to claim 
• Immediate and on-going assistance with liability investigations
• A need to provide accurate and complete information
• Production of documentation within shorter timescales 

Summary
The key objective of these reforms is to speed up claims settlements and reduce stress for the claimant. In the longer term all insurance buyers should benefit from reduced fraud and extraneous legal fees savings feed through to more competitive insurance premiums.

Car dealership up in flames

A major fire at a main car dealership in the East Midlands destroyed its workshop and repair centre and caused extensive smoke damage to the office areas, parts storage areas and new and used vehicle stock. A team from T&B was assigned to manage the claim.

Coordination
An initial meeting was organised with all the organisations affected by the fire including the policyholder, their landlord, their insurance broker, accountant and the insurer’s loss adjuster. The key objective of the meeting was to establish the circumstances of the incident, identify any immediate issues that needed to be resolved and to agree a plan of action.

Buildings
The policyholder did not own the premises but was responsible for insuring them. So, with the support and assistance of the landlord, we arranged for engineers and surveyors to attend the site and produce an initial strip out and decontamination schedule together with a further schedule for the reinstatement of the premises.

The main issue relating to the building was damage to the asbestos roof and we arranged for suitable contractors to be instructed to analyse the extent of the contamination and to report on the most effective ways to manage and remove the asbestos debris.

Machinery and plant
Our team prepared an itemised inventory of damaged and destroyed machinery, hand tools, diagnostic equipment and office contents. This was checked on site with the loss adjuster and a detailed and supported schedule of claim was submitted.

Stock and work in progress
Toxic smoke deposits and asbestos debris had contaminated stock so it was quickly agreed with the adjusters that none of the parts stock could be used on vehicles. A list was prepared and checked on site with the adjuster.

Vehicle stock
A large number of new and high value second hand vehicles were damaged by the fire and contaminated by asbestos. We arranged for these vehicles to be removed to offsite storage and negotiated the value of these with the insurer.

Business interruption
The extent of the fire damage was such that it was impossible for the business to continue trading from the site. The policyholder located temporary premises to enable them to continue to trade and we advised them as to how the business interruption section of their policy would support them with this aspect of their claim.

Summary
It was clear that the claim would continue beyond the end of the 12 month indemnity period and therefore a projected business interruption claim was produced and a negotiated settlement agreed on all aspects of the claim, including the building. This ensured that the policyholder received considerable sums in advance and had the flexibility to utilise these sums in the most advantageous way for their business.

What to do next?
If you think we can help you with a claim why not contact us today.

T&B appointed to multi-million pound fire

A printed circuit board manufacturer based in eastern England suffered a multi-million pound loss following a fire that destroyed its main production unit and caused extensive smoke and water damage to the remainder of the premises.

Major loss team
Thompson & Bryan’s major loss team were assigned to manage the claim and they spent several days on site with the policyholder and other interested parties in the immediate aftermath to discuss how business continuity might best be achieved and to also formulate a strategy for collating all the information required to support the insurance claim.

The company had suffered a major fire previously and encountered significant difficulties in resolving its claim and recovering the business so we were immediately under pressure to demonstrate our professionalism. We set about quantifying the claim.

Buildings
Working alongside a team of engineers and surveyors, we coordinated the demolition and clearance of the most damaged unit. We also coordinated the production of all the necessary specifications and other information to support the reinstatement works required to the remaining buildings on site.

Machinery and plant
Our main task was to produce an inventory of damaged and destroyed production machinery, computer equipment and general contents. We researched new for old replacement prices and produced a detailed and fully supported schedule of claim.

Stock and work in progress
Due to the extent and variety of stock, including raw materials and work in progress, in the premises at the time of the loss, we negotiated an agreement that the best way to quantify the loss was to carry out an accounting reconciliation based on the policyholder’s financial records.

The calculations were prepared in various ways to provide a ‘sense check’ on the values produced and this was then used as the basis for the stock claim submission.

Business interruption
Following our initial discussions with the policyholder regarding business continuity, it was agreed that subcontracting customer orders was the only viable means of maintaining short term order fulfilment. We maintained an electronic record of every customer order placed, its value, subcontract cost and BAU production cost to accurately calculate the value of claim that would be submitted under the ‘increased costs’ section of the policy.

We also analysed pre and post incident turnover to prepare calculations to support the loss of gross profit calculation using the policyholder’s financial information and in close liaison with their accountants. A detailed and comprehensive submission of data and analyses were submitted to insurers in support of all aspects of the business interruption loss including a projection of the anticipated impact for the full 12 month maximum indemnity period on the policy.

Outcome
We negotiated an early cash settlement, which provided the business owners with the flexibility to reinstate in a way that best suited them and in a time frame that best met their long term requirements.

Summary
The management of the company were extremely pleased with the way we applied our resources and expertise so that they didn’t have to be involved in the day-to-day direction and management of the claim. This enabled them to concentrate on their business and their clients.

What to do next?
If you think we can help you with a claim why not contact us today.

Leading hair loss clinic call on T&B

Water escaping overnight from property above a leading hair loss clinic in central London created havoc by rendering electrics and IT useless as well as causing extensive damage to the consultancy area’s flooring, walls and ceilings. Thompson and Bryan were on hand within hours to help the policyholder.

Mitigating loss
The first task was to organise emergency repairs so that the premises could re-open while a more extensive plan of action, for what was going to be an extensive refurbishment, could be organised.

Quantifying loss
Discussions were held with the company directors and their accountant to consider:

• The immediate effect on the business, including the associated financial losses that might be incurred for several days while emergency repairs were undertaken
• The ongoing effect on the business and expected financial losses of undertaking consultations in less than satisfactory conditions
• The practicalities and costs of undertaking the extensive refurbishment required outside of normal business hours so that there would be minimum disruption to ongoing client consultations

We also liaised closely with the policyholder’s preferred building surveyor and oversaw the production of a detailed refurbishment schedule that was issued to a selection of tendering contractors.

Upon receipt of the tenders, agreement was reached with both the clinic’s insurers and their landlord’s insurers on claim value and apportionment of the damage.

Outcome
Our in-depth financial analysis enabled us to negotiate a six figure settlement, based partially on forecast losses during the future refurbishment period that allowed the clinic to undertake the refurbishment at a convenient date in the future.

Summary
The directors of the clinic were very happy with the way that we focussed on the practical issues that needed to be addressed, such as immediate repairs to mitigate losses, as well as the more complex financial analysis. Our support meant that the clinic was able to concentrate on maintaining and growing its rapidly expanding business.

What to do next?
If you think we can help you with a claim why not contact us today.

Post Holiday Blues

Our client returned home from a trip overseas to be confronted by water pouring through her ceiling.

While she had been away the country had been gripped in a cold snap causing a water pipe to burst in her loft. Over several days a significant amount of water had escaped, soaking through the first floor bedrooms, ground floor living areas and kitchen. The water had also caused some of the areas of the ceiling to collapse.

Our task was to ensure that the policyholder’s property was returned to its pre-damage condition as quickly as possible.

Alternative accommodation
We quickly established that the extent of the damage had rendered the policyholder’s home uninhabitable and emergency hotel accommodation was quickly arranged. This was soon substituted for a more convenient long-term serviced flat rental. Costs for alternative accommodation were agreed with her insurers very quickly.

Asbestos issues
The two bedroom semi-detached property was built in the 1950s. Because of its age and the areas of ceiling that had been brought down by the water, T&B arranged for the appointment of asbestos contractors to undertake sample testing.

In addition, an experienced building surveyor was appointed using T&B’s network of trusted professionals to prepare a detailed Schedule of Works. The Schedule had two objectives, firstly as a document that could be agreed by all parties and to be used as the basis of a competitive tendering exercise with contractors.

Contents
We established that the water damage had disturbed Asbestos Containing Materials (ACMs) and after considerable discussion and negotiation we agreed with all parties that the most sensible course of action would be for the contents to be removed and safely disposed of. T&B undertook a detailed inventory of these items and researched replacement costs for them.

Outcome
We made sure that the policyholder’s property was allowed to fully dry out, ACMs removed and repair and reinstatement successfully undertaken. We also managed to argue for the use of a building contractor preferred by the policyholder. All damaged and contaminated contents were replaced on a ‘new for old’ basis and the policyholder returned to the property some six months later.

Summary
This case, as with many of this type, was more complicated than it initially seemed. The asbestos discovery added an extra dimension, but, by concentrating on the policyholder’s needs and by accurately quantifying the costs, the policyholder was able to return home quickly.

What to do next?
If you think we can help you with a claim why not contact us today.

T&B called up to help after ex Bomber Command hangar fire

When we got the call to help with a major fire claim at an aircraft hangar situated on an ex-RAF base in Lincolnshire that was once used by Bomber Command we scrambled into action.

The extent of the damage
The initial fire in the hangar, which had also been used previously as a filming location for a major Hollywood film, was fuelled by oil from an electrical transformer. The burning oil helped to accelerate the spread of the fire up into the timber roof lining of the hangar. The resulting damage from the fire destroyed two thirds of the asbestos clad roof, together with the electrical installation and a steam heating system used to keep aircraft at operating temperature during the Cold War. Manufacturing equipment used by the policyholder was also damaged together with finished stock and work in progress.

Quantify loss
Our initial objective, after we had organised and coordinated work to make the building safe (using a structural engineer), was to accurately quantify the full extent and cost of the damage. Because of worries about the roof a second, a more detailed engineering inspection was arranged to ascertain the extent of the damage and the engineer was instructed to produce calculations and drawings detailing the roof structure and the options for repairs or replacement if necessary.

We then organised for a surveyor to be appointed to prepare a schedule of repairs for the entire building, which also incorporated the engineer’s recommendations on the roof. This scope of works was agreed with the loss adjuster and a complete tender document issued to contractors for pricing.

At the same time, schedules of machinery and stock were prepared and checked on site with the adjuster. Our team then priced these lists to fully support the claims issued to the adjuster.

Outcome
An advance settlement was agreed for all aspects of the claim, which gave our client the flexibility to undertake the repairs to their specification and some months later the work to the hangar was completed.

Summary
Speed and quantification are critical aspects of any claim and as can been seen with this claim, detailed and accurate assessments by professionals in their respective fields lead to faster settlements.

What to do next?
If you think we can help you with a claim why not contact us today.

New Owner for Leading Claims Specialist Thompson & Bryan

Press Release: London, 15 April, 2013

Leading claims specialist Thompson & Bryan has been acquired by market expert Paul Lawrence, it was announced today.

Thompson & Bryan was established in 1867 and is widely acknowledged as being the leader in the claims industry when it comes to working with insurance brokers and their customers to ensure that claims are prepared correctly and settled in a fair and fuss-free way.

Following an intractable Pension deficit the business went into administration last week and the intellectual property and work in progress has been acquired by Paul.

With the continued recession and soft market, many insurers have been tightening their belts and looking to minimise the amount they are prepared to pay. There has never been a greater need for the client to have a professional working on their behalf to ensure a fair outcome for all parties.

Thompson & Bryan had established themselves as true experts, particularly in areas such as business interruption which can be a minefield for brokers and clients alike. They have a reputation for being fair and thoughtful in their dealings with insurers. For many insurers and their adjusters, Thompson & Bryan is seen as the acceptable face of client claim.

Paul Lawrence has more than 30 years experience in the claims industry and is highly respected by brokers and insurers alike.

John Sims, former CEO at Lorega Limited said: “This is an ideal acquisition for Paul. Thompson & Bryan is highly professional and has a great brand name with brokers and Paul is simply the best in the market; I can only see the business going from strength to strength with Paul at the helm.”

Paul Lawrence said: “This was an opportunity I simply couldn’t turn down. This is a great business and a trusted brand that simply got into some unforeseen financial difficulties. There will need to be some changes to the structure of the business but moving forward the picture is all very positive.

“Our service charter will see us using qualified adjusters, charted accountants and other top professionals as required. I have always put the client and broker first and lived for great service, this will be our ethos. Every loss will be treated as the most important claim we have ever handled regardless of how big or small it might be. I am incredibly excited about this new dawn in the history of such a great company as Thompson & Bryan.’

For further information please contact:
Paul Lawrence
Tel : +44 (0)7941 111920
E-mail : paul-lawrence@thompsonandbryan.com


Notes to Editors

About Thompson and Bryan

J.G.Thompson & Co, the forerunner of Thompson & Bryan Limited, was founded by James Grafton Thompson in 1867. In its steady growth throughout the 19th and 20th centuries, the Company gradually expanded from a small office in Nottingham to the international organisation it has become today.

Thompson & Bryan had grown sufficiently to become heavily involved during the Second World War in the assessment and settlement of extensive bomb damage claims under the guidelines of the War Damage Commission. The overspill of work continued until well into the 1950s.

Thompson & Bryan’s versatile and expert services again became in great demand during the 1970s and 1980s in the assessment of bomb damage to property in Northern Ireland, dealing with the Compensation Agency to secure financial settlement on behalf of the applicants who suffered damage.

The Thompson & Bryan group of companies provides an unrivalled 24 hour service operating from seven major cities throughout the United Kingdom and Ireland. In spite of its expansion over the years, the group has never lost sight of the James Grafton Thompson tradition for providing the utmost in professional and personal service.

About Paul Lawrence

Paul has been a claims specialist working on behalf of customers for more than 30 years. He was originally part of the Harris group which later became Harris Balcombe. Paul left Harris Balcombe to set up his own adjusting and advocacy business, Commercial Claims Solutions. Paul deals with losses all over the world and is highly regarded by the broker market for his diligence and the ability to get a fair settlement for the client by working closely and thoughtfully with insurers and their loss adjusters.

Ted Baker v AXA and Others

This case demonstrates the importance of knowing exactly which insurance terms and condition are in place for a particular risk and the importance of brokers placing a client's risk correctly.

The Facts

Ted Baker pursued a claim against AXA asserting that they had cover for a claim under the terms and conditions of their commercial combined insurance policy. First they said that there was cover for the losses under the Theft section of the policy. They then argued that consequential losses were covered under the terms of the Business Interruption section of the policy.

Over a number of years the retailer had been the victim of thefts by one of its employees who acted in collusion with delivery drivers. The retailer asserted that by reason of a standard form theft extension clause, cover was in place for this type of theft.

The claim was resisted by AXA on several counts. They alleged that theft by an employee was not covered under the terms of the policy as a matter of construction and that if "surreptitious theft" by an employee were to be covered by an insurance policy then it would only to be covered under the terms of a fidelity policy.

Other defences were also raised relating to mistake, rectification and estoppel. There were also co-insurers involved and they ran parallel defences but also alleged non-disclosure by the broker of the fact that this was unusual cover and that it ought to have been disclosed by the broker.

The Judgement

Despite 21 witnesses being called, the vast majority by the Defendants, the court held that the plain and simple words used in the theft extension clause meant that non forcible and violent theft by an employee was covered under the terms of the insurance policy and that the retailer was covered for its direct losses. It did not go against business common sense as alleged by the Defendants.

Similarly the Defendants could not allege that market practice was to the effect that this kind of cover was not available. The Defendants had attempted to give such evidence both with lay witnesses and with their expert. The judge found that the words used in the policy could not be displaced by any such allegation.

Similarly the Defendants attempted to argue that the parties were trying to replicate the cover formerly given by the defunct Independent Insurance Company. Again the court held that this could not displace the actual terms and conditions of the policy.

On the basis of the policy terms it was therefore found that Business Interruption loss was similarly covered under the terms of the policy. An exclusion clause based on "fraud and dishonesty" was held not to apply.

The court held that there were no "shared assumptions" and therefore the Defendants plea of estoppel also failed.

The Defendant's allegations of non-disclosure and misrepresentation on the part of the retailer's brokers also failed

Comment

The Judgement demonstrates that an insurance company faces an uphill task in trying to persuade a court that despite what a policy says, the terms did not represent what the parties wanted. In this case the majority of the Defendants' arguments were dismissed "in limine", in effect the Defendants' cases did not get over the first hurdle. Quite simply if the terms and conditions of a policy make it clear what is covered, the court will hold that to be the case.

You can read this case study in full here:

High Court Decisions - Baker v Axa


*We’d like to offer a special thank you to Nichola Evans at Browne & Jacobsen for providing a summary of this legal case study. 

Information flow between parties is critical

Ground Gilbey v Jardine Lloyd Thompson UK Limited [2011]

Over the past few years we have seen a number of important decisions involving the role of insurance brokers and how critical it is that there is a flow of information between the parties. This case emphasises that and the consequences when people get it wrong.

Fact

This claim relates to a fire at Camden Market and was brought by the owner of Camden Market.

A survey of the premises was carried out in 2005 and identified the use of LPG portable heating appliances. The Claimant duly banned their use but stallholders continued to use them. On the renewal of the insurance policy in 2007 the policy contained a new endorsement – a survey condition requiring completion of all risk improvements. The Claimant alleged that this condition was not brought to their attention.

On 9 February 2008 a fire broke out at Camden Market. The owners made a claim under the terms of the insurance policy. The policy condition was raised by the insurers. The owners settled their insurance claim for £3.825M which represented approximately 70% of the claim leaving a shortfall of approximately £1.7M. The Claimant sought to recover the shortfall from their insurance brokers.

Findings

The court found that the brokers had acted in breach of duty in three respects:

• A failure to find a policy allowing the use of portable heaters.
• Failure to give advice on the policy condition.
• A failure to pass on a critical email in relation to the removal of portable heaters to the owners.

The Claimant was able to recover its losses in full and the court would not entertain an allegation that there had been any contributory negligence by the owners before the fire.

Comment

This case again shows the importance of essential information being passed between insureds and insurers and that this duty extends to the parties’ agents. When difficulties emerge in the context of a claim, it is important to investigate every angle, consider the documentation and investigate as to whether all information has been communicated to the parties.

A little risk management goes a long way

We are heading for another bout of poor weather so we thought we’d pull together some tips for you to pass on to your clients to help them avoid unnecessary claims.

There is no doubt icy conditions produce more claims for slips and trips than at any other time of the year so if your clients operate from a premises they need to be vigilant to the potential risks to visitors (and employees) of being injured in icy conditions.

The Issue

Even relatively short bursts of poor weather and low temperatures can produce hazardous conditions underfoot that last for many days, and sometimes weeks after the initial event.

Most commercial buildings have some external areas that are used by employees, deliveries or the general public and building owners or tenants have an obligation under health and safety legislation to keep every pedestrian traffic route within the premises free from substances that may cause someone to slip, trip or fall.

The Solution

If a business operates from a premises they should have a plan to deal with the problem should it arise. Consideration should be given to the following when formulating your plan:

Resources
Businesses should know what manpower and equipment they are likely to have available should bad weather strike. Practically how many staff will be available (usually needed early morning) to clear areas and spread grit? Do they have sufficient equipment readily available on site, including sufficient grit and the means to transport it around the site?

Prioritise
Businesses need to decide which areas should be cleared for the premises to operate safely. Priority should be given to the building’s entrances, including goods and visitor entrances as well as staff entrances. It may be impractical to keep all car parks and areas clear so decide what needs to be done to ensure untreated areas are not used.

Maintain
Everyone in the business should be aware of their responsibilities within the plan. Make sure they have a plan to maintain the areas that have been cleared so that they do not re-freeze over.

Communicate
Employees should be informed of the bad weather plan in advance and be aware of the areas that will be prioritised for clearing so that they know what to expect when they arrive for work. Signs at the entrance to public areas should be used advising visitors of untreated areas. It should be made clear that they use untreated areas at their own risk.

Record
A premises specific risk assessment for operating the site in bad weather should be carried out and recorded.