COVID-19: the short and long term implications for claims handling organisations and litigation
The impact that COVID-19 is having and will have on claims handling organisations and litigation generally.
The understandable focus of concern following the Prime Minister’s announcement [23 March 2020 ] of emergency instructions and legislation has been its impact on health and personal freedom.
This article seeks to examine the impact that COVID-19 is having and will have on claims handling organisations and litigation generally.
Our justice system – the present position
Whilst the courts have taken some steps in recent years via the introduction of telephone hearings for intermediate or interlocutory hearings, video conferencing has been used sparingly – confined generally to prisoners on remand and, in civil cases, to the very occasional video linking of experts from abroad.
The Lord Chief Justice’s announcement [19 March 2020] was to the effect that the civil justice system, where possible, should not grind to a halt. Parties should utilise technology where possible, but the announcement came with an implicit if not direct recognition that civil trials may be difficult if there is a need to cross-examine witnesses or experts.
The sentiment to keep going where possible is one that many will endorse but there are several intrinsic difficulties.
At present, courts are adopting different approaches. In Liverpool County Court, trials, both fast and multi-track, can be adjourned upon a written request made by either party. Consent of both parties is no longer necessary.
Other courts, for example the RCJ, are encouraging video conferencing of experts. However, the information coming out is changing by the hour and courts seem to be adopting different approaches.
The prospect of any medico-legal report for the foreseeable future is remote for any one of the following reasons:
- Consultants [including those recently retired] have been drafted in to form part of the NHS’s coordinated COVID-19 response
- Claimants’ inability to travel. Travel for the purpose of personal injury litigation will simply not meet the threshold of ‘absolutely necessary’
- An inability for consultants, even if available, to undertake an examination given the recent requisition of private hospitals
This will clearly impact upon existing cases where directions allow for medical evidence and will in turn impact on new cases where claimant solicitors have only recently been instructed.
In short, except for those cases where medical evidence is admitted or can be agreed, a stay in proceedings may be the only feasible option to protect clients’ interests.
It also appears inevitable, given the stasis on medico-legal reporting will last several months, that new litigation will dry up but will lead probably towards the end of this year to much higher volumes as and when the ‘stay’ lifts. This is likely to impose short term organisational pressures towards the end of this calendar year.
Data informs modelling and trend analysis. Insurers and their actuaries may be wise to treat this calendar year’s figures with caution, both as to claim frequency and type – whether this be for occupational disease or casualty and EL/PL claims.
Our update on the 24 March 2020: COVID-19-essential-guidance-about-the-impact-on-workplace-health-and-safety/ examines the implications for employers on a range or workplace issues from risk assessment specific to COVID-19 to mental health support and training.
Overall, we expect 2020 will show markedly lower levels of litigation for occupational disease and casualty, EL and PL.
Taken over the longer term, occupational disease, given that its source is largely historical and legacy exposure, is likely to remain largely steady.
We expect that casualty claims’ frequency for EL and PL claims will decrease in the short and immediate term. This is based on the simple premise that lower numbers in work or visiting leisure facilities ought to translate into fewer accidents.
The two caveats around this are;
[a] Whether depressed wages and economic wellbeing will lead to an increase in fraudulent claims
[b] Will there be a growth in new types of litigation?
Whilst accepting that some studies show a correlation between economic depression and a rise in fraudulent claims, we expect that any increase will only be seen from 2021 and beyond – when COVID-19 starts to recede from public consciousness and the grim economic reality starts to bite.
In the short term, the sense of societal togetherness that enforced nationwide isolation engenders may give rise to a reduction in fraudulent claims. We anticipate that this will not last.
Claimant solicitors have a reputation for resourcefulness and an ability to seek out new income streams. The obvious target here remains an employer’s failure to adequately protect their employees from an increased risk of developing COVID-19, whether by means of reducing exposure, supplying adequate respiratory protective equipment or providing adequate training and instruction on its use.
Healthcare providers and food retail employers appear most at risk here. In respect of the latter, some supermarkets have introduced protective perspex screens, whilst others have supplied masks and gloves. Will those employers who have not be held liable if employees contract the disease?
Whilst claimants will need to establish occupational causation, it is likely that a ‘doubles the risk’ test will be applied. In simple terms, this means that an employee must demonstrate that occupational exposure has ‘doubled the risk’ of the claimant contracting the condition compared to personal exposure.
In the case of delivery drivers this may be difficult. In the case of supermarket cashiers, it may not. Frequency and duration of exposure will be critical. Employers may be best advised to remove all those with underlying health conditions from ‘frontline’ work, where possible, limit or rotate exposure and protect by means of barriers or PPE those who are.
The prospect of different standards of care being applied is also likely. What may be deemed a reasonable standard for general employers may be deemed unreasonable to impose upon healthcare employers.
The pandemic will throw up difficult factual scenarios and law firms are not immune. This article is written whilst fielding a query from a colleague having been informed by the court that a personal attendance at court is ‘still in the diary’ and in the context of a claimant law firm unwilling to consent to a telephone hearing unless the application is withdrawn. Should she travel?
There is a need for claims handling organisations to take a united front and share intelligence of behaviours- in the face of a minority of individuals seeking to game the crisis.
Understandable concern has been raised about the impact of home working and societal isolation on employees’ mental health. It is of course no coincidence that divorce booms in January after the enforced familial isolation of Christmas. There are, however, signs that the present isolation may not have the adverse impact some commentators fear.
Many responsible employers are significantly increasing communication through WhatsApp groups and other social media sharing. This is helping to foster inclusivity and a corporate / personal togetherness. Many employees are communicating with their managers in informal ways, creating a level playing field for all.
Those with underlying anxiety issues are often prone to catastrophising – imagining a worst case scenario. Now that scenario has effectively arrived, many are reporting that what they feared all along is not as frightening as they envisaged – this may lead to a lessening not a growth of anxiety.
What then of the future?
The impact of this crisis will have many implications not only for litigation volumes or new claims types.
It will, in our view, accelerate and increase home working and the use of technological solutions to dispute resolution generally.
Whilst the short and medium effects will be, for many, unpleasant, it is hoped that organisations will emerge more resilient, more agile, and with a more engaged and mentally capable workforce. We will soon find out.