Caroline Coyle highlights the key issues dominating the legal landscape in Scotland this month.
Counter Fraud Scotland
House of Lords
Claims Management Regulation – an opportunity?
This month, DWF were honoured to be described in the House of Lords as "the respected Manchester based international law practice that has offices in Scotland, during a debate on the Financial Guidance and Claims Bill. One of our counter fraud alerts was also read out in the Chamber to the House.
One of the main enablers for fraudsters in Scotland is the fact the claims management companies (CMC's) are not regulated unlike the position in England and Wales. An opportunity has arisen for UK wide CMC regulation by way of the Financial Guidance and Claims Bill.
The Financial Guidance and Claims Bill announced in the Queens speech aims to strengthen regulation of CMCs by transferring responsibility from the Ministry of Justice to the Financial Conduct Authority (FCA) and by tightening the regulation of CMCs and give regulators the power to cap fees.
The House was considering the Financial Guidance and Claims Bill. This is from the speech by the Earl of Kinnoull:
"My concerns are widely held. I know that they are held by at least two noble Lords, while DWF, the respected Manchester-based international law practice that has offices in Scotland, commented in February that “in recent years increased levels of fraud have been detected in Scotland, along with a significant rise in injury claims. In part this is thought to be due to the effect of LASPO in England pushing claims management companies into Scotland, where their activities are not regulated and referral fees are allowed.
That is a warning bell that I think we in this Chamber ought to listen to hard. The FCA is, rightly, a UK-wide regulator in, for instance, the non-life insurance industry. While I might moan a bit, I think the FCA is upright and highly professional, and I strongly feel that it should have a UK-wide role here. I therefore ask the Minister to comment on the position regarding the territorial scope of the Bill. It seems that the interests of the UK and of those citizens who most need the services of properly functioning claims management companies would best be served by having a single market and a single regulator. Is she in touch with Scottish Ministers to discuss that? In closing, I once again welcome the Bill."
This is an excellent opportunity for us to align ourselves with the rest of the UK and seems a sensible way to plug an easy route into Scotland for disreputable CMC's.
Coverage can be listened to at 18.11.30 onwards in the attached video stream
Disrupt to Progress Forum – Claims Management Companies/ Holiday Sickness Claims
TheCounter Fraud team held its second ‘Disrupt to Progress’ Forum in Glasgow on 5th July. Bringing together key industry figures from ABTA, IFED, IFB, ABI, the Law Society of Scotland, the Forum of Scottish Claims Managers and Police Scotland the event focused on the current concerns around regulation of CMC's and the meteoric rise of holiday sickness claims.
Luke Petherbridge, Senior Public Relations Manager, ABTA, gave an excellent industry perspective talk and advised of the level of the problem. The key highlights were:
Cost Repercussions - £52 million
Rising claims - a 434% rise since 2013 and
- a 700% rise in claims in 2016 alone
With 90% of claims being bogus
ABTA have launched a 'Stop Sickness Scams' campaign and Petherbridge urged all industry representatives to get in touch with their local MP, and lobby them on the issue. The Stop Sickness Scams website can be accessed here and includes a means by which you can make contact with your local MP.
We have had great feedback from all attendees and Alastair Ross from the ABI kindly made reference to the conference when he was interviewed by BBC Radio Scotland a couple of days later. You can to Alastair's interview here at 1 hour 45 mins.
Please get in touch with Jill Sinclair if you would like to attend future events or would like bespoke training for your teams.
Cut Claims Costs - Top Tip
Maxi-Cosi car seats replaced for free
Insurers and claims handlers should be alert to uninsured loss claims for replacement Maxi-Cosi car seats, following an RTA. Consumers are advised to replace a car seat once it has been in a vehicle involved in a collision. If a claim is made for a replacement car seat, Maxi-Cosi will replace the seats free of charge if they have been involved in an accident and anyone facing a claim for a replacement Maxi-Cosi car seat can be referred to the link below.
DWF contacted Maxi-Cosi and they confirmed that they will replace the car seat base too if it was being used at the time of the accident. When taken together, the cost of these seats and their Iso Fix bases can cost upward of £500.
We continue to monitor the progress of key legislation on expenses and abuse claims as they progress through the Scottish Parliament.
The Limitation (Childhood Abuse) (Scotland) Bill
Current Position – Passed Stage 3 on 22nd June 2017(unanimously). The Bill will now be submitted to the Queen for Royal Assent and should come into force this year.
Key Facts - to remove the three year limit on survivors of childhood abuse seeking civil damages in court.
Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill
Current position - Stage 1 (Justice Committee), 13 June 2017
Key Facts – QOCS, DBAs, regulation of success fee agreements
Andrew Lothian discusses the impact of the above bill in this month's Journal of The Law Society of Scotland published this month.
Professional Indemnity Scotland
Case - Useful ATE commentary
Centenary 6 Limited v Robert Caven & Kevin Mawer  CSOH 95
On 29th June the Outer House of the Court of Session held that an ATE insurance policy is not suitable as a method of security in place of a bond of caution. The Court was careful to emphasise, however, that a suitably worded ATE policy may be relevant to the question of whether caution is required. The Court also refused a Deed of Indemnity as a suitable bond of caution.
Read more of the discussion by Lady Wolffe here
On Point Scotland - In September the Professional Indemnity team in Scotland headed up by Alison Grant will be launching their first quarterly publication highlighting important matters relating to professional indemnity in the Scottish market.
Other notable activity
We will be hosting our annual Scottish Personal Injury Conference at our offices in Glasgow. The topics covered will include personal injury litigation in Scotland and in particular the operation of the Compulsory Pre-Action Protocol, the All-Scotland Personal Injury Court, and the content of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill. For those reasons the theme of the conference will be “Personal Injury Claims in Scotland: a changing landscape”.
We have lined up a host of really exciting speakers and will be sending invites out in the next couple of months.
DWF Scottish Occupational Health (Abuse) & Fraud Forum – 15th November 2017
We will be hosting a conference in the winter to look specifically at the new abuse bill and current fraud issues.
Scottish Child Abuse Enquiry
The Inquiry is making its way through evidential hearings with the first hearings now concluded. Details of those giving evidence and transcripts of the hearings can be viewed here
News and updates can be viewed via this link as the enquiry progresses.
For further information please contact Andrew Lothian, Head of General Insurance (Scotland) on 0131 474 2305, Caroline Coyle, Associate, Professional Support Lawyer Insurance on 0141 228 8132 or Jill Sinclair, Head of Counter Fraud (Scotland) on 0141 228 8196
This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.