BLM’s head of casualty, Simon Jones gives his view on the impact of the COVID-19 pandemic on the casualty landscape and claims handling generally. This guidance was last updated on 21 April 2020.
Impact on casualty claims
As a result of the current lock down, it is anticipated that there will be an overall reduction in the number of EL and PL claims. However, there may be an increase in claims in discreet areas, for example, retailers involved in the supply of groceries and hardware are still open as an essential service provider but there is unprecedented demand on these retailers and a shortage of staff due to increased absenteeism through illness and stress. In addition, there are retailers that are rebranding themselves as supermarkets and or hardware stores in order to stay open.
There are also businesses operating in the gig economy, such as delivery companies who deliver fast food, clothing and groceries etc. and taxi companies. In these circumstances, workers are continuing to come into contact with members of the public and there could be claims arising from inadequate risk assessments, lack of PPE and unsafe systems of work. In addition, there may be a rise in the number of accidents due to lapses in concentration as a result of working longer hours or having to make an increased number of deliveries during each shift etc.
It is likely that there will be an increase in claims due to employees developing coronavirus in the workplace due to inadequate PPE, insufficient risk assessments, unsafe systems of work (such as a failure to implement social distancing procedures) etc. There may also be a rise in EL claims, as a whole, because a surge in demand where there has been no real increase (and potentially a decrease) in staff numbers, can lead to unsafe systems of work, lack of supervision and inadequate risk assessments.
There continues to be increased demand on logistics companies that are involved in the storage, supply and distribution of online shopping items, groceries and pharmaceuticals. There may be a rise in casualty claims in this sector due to increased pressure on the workforce, staff absenteeism due to stress and/or illness (potentially COVID-19) and difficulties keeping to established procedures and systems of work as a result of reduced timescales, staff shortages and increased demand.
There may also be an increase in accidents where home working is involved due to insufficient desktop assessments and shortages of suitable work equipment to enable individuals to safely and effectively work from home. In addition, there could be an increase in the number of stress claims because working in isolation can lead to increased anxiety and loneliness, which can affect an individual’s wellbeing and mental health.
There is the potential for fraudulent and/or exaggerated claims, particularly in circumstances where individuals may have suffered a drop in income or are disgruntled and/or unhappy about how they have been treated by their employer. Claims for care and assistance could also become more complex with a mix of gratuitous and commercial rates being sought if a carer becomes ill with coronavirus. In addition, claims for loss of earnings will need to be thoroughly assessed to determine if the period of loss is linked to the accident or coronavirus rather than an unrelated event.
What businesses need to know in terms of claims handling
Claimants and defendants are working together in respect of handling claims during these unprecedented times and we have seen cooperation between parties when it comes to extending relevant timescales pre and post litigation.
In respect of pre-litigation cases, there is an increase in the number of cases where claimants are seeking stays for issuing and/or serving proceedings. Although each case will be fact sensitive the experienced view is that issue should not be taken with stays which are requested as a result of COVID-19 where they appear reasonable in the circumstances. For example, the claimant may be struggling to finalise their medical evidence due to the expert no longer taking appointments or the claimant may be self-isolating.
In relation to portal cases, there are strict timescales for investigating claims under the EL/PL protocol (30 working days for employers’ liability claims and 40 working days for public liability claims). Claimants will normally exit their claims from the portal where there is non-compliance with these timescales but agreement can be sought for them not to exit the claim from the portal where the delay is due to COVID-19.
It is essential to have open and continuing dialogue with claimant solicitors and to make clear that it would be unreasonable and in breach of the overriding objective for them to take unfair advantage of the current climate. In addition, the reasons for the delay should be given, for example, site inspections may not be able to take place because the premises are closed or witnesses may not be available to speak to due to staff being furloughed.
In the event that the claimant exits the claim from the portal, agreement should be sought for portal costs to continue to apply. It is important to note that the parties need to cooperate. The courts do not look kindly on unnecessary litigation and this position will only be strengthened by the impact COVID-19 will have on the court’s already stretched resources.
What does this mean for insurers and brokers?
Parties are working together and are, in most cases, agreeing extensions, varying court directions by consent, permitting stays and adjourning hearings. In respect of pre-litigation claims, the prevailing view is that claimants will agree to extensions for investigating liability and providing disclosure. Also, there is the argument that claimants will not take the point in respect of costs where a claim automatically exits the portal due to time running out for liability investigations to conclude. In all cases, an open dialogue needs to be in place between the parties and it made clear that investigations are unable to be carried out or will not be carried out within the relevant timescales due to COVID-19.
It would be unreasonable and unnecessary for claimants to run cost arguments in these cases and/or to make PAD applications where the defendant is not at fault. Also, the courts will not look kindly on unnecessary applications, and as a result, it is unlikely that claimants will have the appetite for making such applications.
In all cases, the parties must follow the overriding objective in order to enable the courts to deal with cases justly and at proportionate cost. As a result, both claimants and defendants should take a pragmatic view and not look at unnecessary point scoring, which in itself could become a conduct issue. A number of insurers have signed up to the ABI protocol along with claimant solicitors to include Thompsons, Leigh Day and Slater and Gordon. The protocol took effect on 24 March and provides that all limitation dates in personal injury cases will be frozen and claimants must respond constructively to requests for extensions of time to serve the defence. The signatories to the agreement have agreed to extend the protocol from 20 April to 20 May with a further joint review taking place on the week commencing 13 May.
In addition, the new PD 51ZA which was effective from 2 April, permits the parties to agree an extension of up to 56 days without formally notifying the court (rather than the current 28 days) as long as this does not put a hearing date at risk. In the event that a longer extension is sought or if there is an application for adjournment or relief from sanctions, the court must take into account the impact of COVID-19 when determining the application.
Another important change to note as a result of COVID-19 is the instruction of medical experts and how they will be carrying out medical examinations. The experienced view is that many experts will agree to carry out medical examinations by way of video link/Skype. However, medical examinations that are carried out in this way will not be appropriate in all cases, especially where there are issues regarding credibility and potential malingering/exaggeration of symptoms. In these cases, consideration should be given to obtaining a stay of proceedings until face-to-face medical examinations can resume. Although it should be accepted that this may be several months so stays of at least three to six months should be sought.
In accordance with the new protocol for remote hearings and PD 51Y, the courts are, where possible, looking to have hearings carried out by video conferencing facilities/Skype. Although the current view is that this will not be suitable for all hearings, for example, where there are concerns re liability, causation and/or the claimant’s credibility or where there are more complex issues in respect of quantum. Also, general guidance provides that application hearings and CCMCs are to be carried out by telephone rather than in person.
However, the courts have autonomy, which means that they are not all doing the same thing. For example, Northampton County Court has been vacating all trials and not re-listing them whilst Liverpool County Court and Manchester County Court are relisting all hearing to take place by way of telephone or video link/Skype and have advised that if the hearing has not been relisted in this way, it has been stood down.
JSMs are currently taking place by video link or telephone and it is expected that most will go ahead as planned unless there are technical issues or specific reasons for the parties to need to meet face-to-face, such as if the claimant is a vulnerable adult or does not speak English – which would make it more difficult to have the JSM by way of video or telephone.
The latest update from the coroner’s court provides that all inquests and pre-inquest review hearings are being vacated with immediate effect up until 1 September 2020. The current view is that this date is unlikely to change. In all cases, it is essential that the parties cooperate and avoid the need for unnecessary litigation. It has long been the case that unnecessary use of court time and resources is frowned upon and this position will only be strengthened in today’s challenging times where the courts remain under considerable, if not more, pressure.