Over the years we have seen claims driven by claims farming companies in many areas. They advertise in local papers on sports ground hoardings and are inventive in their clarion call to all those who “may” have been affected by the latest scandal…
The current crisis in energy contracts may well be giving rise to the next tsunami of claims, this time against energy brokers. Energy brokers acting for commercial clients are already coming under the spotlight. Google “mis-sold energy contracts” and you will see evidence of the activity of claims farmers and solicitors who (adapting the words of Ralph Waldo Emerson) are “hitching their wagons to this star to see their chores done by the gods”…
Will we see businesses reacting to the problems arising in the current energy crisis by looking to the blame culture and placing energy brokers in their sights encouraged by the El Dorado persuasion of the claims farmers? Allegations range from hidden commissions to poor or commercially biased provider selection. With the rise in prices it will be easy to bolster up losses claimed.
The insurance market has had to weather the storms of mis-selling in pensions, mortgages, PPI, car finance, and cavity wall insulation. Some of these have been regulator-driven as sectors put their house in order. However, the claims farmers encourage often unmeritorious claims funded by CFA arrangements that allow payments to claims solicitors by way of stages reached in a claim. This encourages a type of pyramid funding whereby the costs achieved in one claim are used to fund new claims. In the clamour to provide a flow of fees, claims are started that should never get off the ground in the first place.
Often this is in the hope that payments in small claims will be made on economic grounds. A robust defence is needed to deter such claims combined with a pragmatic approach to select claims to settle. Claims are also exaggerated to allow inflated costs budgets designed to frighten defendants into settlement. Experts are “hired” and we have seen boilerplate expert reports produced as though by copy and paste with Claimant lawyers pushing the court to agree a single expert.
Unmeritorious, exaggerated claims are synonymous to fraudulent claims.
At Crawford Legal Services (CLS) we are ideally placed to deal with providing protection against the damage these claims can do to insurers and their Insured. Our ‘One Crawford’ offering allows us to draw upon the skills of our forensic accounting team and on the proven capabilities of our CLS Fraud experts and our Insight Team, who are able to quickly and efficiently investigate financial background and status. Our Know Your Opponent strategies are currently achieving great success in dealing with suspect Claims Assessors.
If you want to discuss any of the issues raised here please feel free to contact Gordon Walker gordon.walker@crawco.co.uk or Peter Oakes peter.oakes@crawco.co.uk at Crawford Legal Services UK.
