Related Claims Service:
a. Legal Helplines and Advice
b. Authorized Repairers
c. Uninsured Loss Recovery Services
d. Legal Costs Services
e. Risk Control / Advice
f. Rehabilitation Services
a. Legal advice services:
Usually free and offer 24 hours advisory or assistance service. Emphasis is on immediate service. Can be for
advice in respect of a potential claim or advice only. The helpline also acts as the first notification of loss (FNOL)
for legal expenses insurance. It provides practical advice in respect of disputes as well as defense actions. Finally,
services can be offered via online, via websites or chat services.
b. Authorised Repairers (AR):
Insurer will usually negotiate with various suppliers and or repairers to provide services at a
discounted rate and with an agreed service level standard. Motor Insurers have the most prevalent
use of Authorised Repairers in claims settlement.
C. Uninsured Loss Recovery (ULR):
Uninsured losses are those losses which an insured can suffer that are not directly covered by a policy.
Some intermediaries provide help in recovering uninsured losses, but practices vary widely. Legal
expenses policies are usually sold to client which can provide them with with a solicitor to recover
uninsured losses. Examples are:
1. The cost of a hire vehicle
2. Loss of Use (where a replacement vehicle cost was not included)
3. Personal Injury
4. Loss of earnings
5. The cost of Alternative Transport – busses and trains
ULR services usually sit alongside claims recovery carried out by an Insurer’s claims handlers (not always exclusive). At
times the insurers only recover their outlay. It is not unusual for the claims handlers to try and recover the excess from a
negligent third party or their insurers. In practice, they usually issue the excess cheque along with the other cheque.
Finally, if the case goes to court, a single event can only support one cause of action. Hence if a solicitor was to issue proceedings,
in respect of a client’s uninsured losses, they would necessarily need to include their client’s outlay. At times, insurer will not include their outlay in
the court proceedings in order to keep the legal costs low. Insurers in the end do abide by the court judgement and pay the costs.
d. Legal Costs Services:
The term Before the Event (BTE) is where cover is purchased against any incident which may give rise to a claim. Other organization like Accident Management
Companies and Solicitors. The sometimes provide a service to recover uninsured losses, referred to as no win no fees services. The Conditional Fee Agreements
(CFAs), where the management companies recover a percentage of all “wins”.
The After the Event (ATE) cover was introduced by the Access to Justice Act 1999, it set out the rules for the amount on
recoverable costs. ATE legal expenses cover effectively underwrites the possibility that the court action will be
unsuccessful. A premium is paid to an insurer and the policy guarantees payment of the legal costs associated with the
prosecution of the claim. It can sit alongside the CFA.
The legal aid Sentencing and Punishment of Offenders Act 2012 (LASPO) prohibits the recovery of the ATE insurance
premium from the paying party and introduces qualified one way costs shifting as a balancing measure. Qualified one way
costs shifting prohibits the recovery of costs from the losing claimant, except where they are found to be fundamentally
dishonest. This is helpful as it means a claimant has a minimum cost risk when taking a genuine claim to court. If they lose,
the do not have to pay the defendant’s costs. The ATE will cover that claimant’s own cost in the above situation.
CFA fees are capped at 25% of the general damages to be awarded however if a Damage Based Agreement (DBA) in place,
it would mean that the client has agreed to share a percentage of the sums recovered and also capped at 25%. Not
necessarily in leu of costs.
The legal Services Act 2007, now allows a non lawyer to own a legal practice. This along with LASPO, opens the door for insurance companies to enter
share ownership of law firms. This created a hybrid where insurers can now send their client to the law firms where they’ve got an interest to recovery
uninsured losses, such as credit hire and personal injury
Finally, the Civil Liability Act 2018, when implemented (along with changes to the small claims tract ) changed the landscape once more for certain types of claims.
e. Risk Control and Advice:
One of the three elements of Risk Management is Risk Control The other two are Risk Identification
and Risk Measurement. Risk Control is concerned with minimizing the adverse effects of an event, if
and when it occurs. It can be Financial or Physical.
Financial Risk Control:-
Given that an insured may not be able to get rid of every risk to which it is exposed, funds need to be
put aside to cover losses. This can be through, risk retention, risk transfer or a combination of both.
i. Risk Retention, this can be met from the present cash flow, or client’s captive or self insurance (fund)
ii. Risk Transfer, where the losses will be passed on to someone else eg: Insurance policy or Third Party
Physical Risk Control:-
Refers to the practical techniques used to reduce the frequency or severity of losses. Either through
Risk Avoidance or Risk Reduction.
i. Risk Avoidance – This is where the prospective cause of loss is abandoned. This is generally not
practical nor desirable.
ii. Risk Reduction – This is where you take practical measures to reduce the frequency and severity of losses.
Advice on risk control measures are available from Insurers, brokers and specialist accident management companies. This is
mainly used for commercial risks, insurers have a vested interest in controlling the risks that have been transferred to them ,
hence the use of surveyors who in turn will provide technical advice. Some insurer offer insureds a premium reduction for risk
The insurer offers this service to the injured third party claimant as a means to aid recovery. This supports
the fact that early intervention with rehabilitation can improve a claimant’s long term prognosis, especially
for more serious and catastrophic injuries.
The three options use are:-
1. Medical – this deals directly with the injury or disease by the traditional method of surgery.
2. Vocational – Where to a claimant cannot return to their usual occupation, then care is provided
in helping them find alternative employment or even retraining.
3. Qualitative – This help claimants to overcome their impaired capabilities to enable them lead as full a life