The Ministry of Justice’s claims reforms, set to be implemented between 2 April and 31 July, will have a profound impact on the way in which organisations in England and Wales manage their insurance claims notification procedures. According to Marsh, organisations that fail to adhere to new timeframes stipulated by the reforms, or Pre-Action Protocols, run the risk of paying higher legal costs and insurance premiums as a result.

The reforms, to be implemented as part of the Legal Aid Sentencing and Punishment of Offenders Act 2012 (LASPO) and changes to the Civil Procedure Rules, are designed to control the spiralling costs associated with civil litigation in low value personal injury claims.

To ensure that claims are dealt with in a more expeditious manner, the Pre-Action Protocols will require organisations to acknowledge potential personal injury claims impacting on employers’ liability, motor and public liability insurance policies within one working day. Insurers will be required to make decisions on liability within 30 days for employers’ liability claims and 40 days for public liability claims. These requirements replace the much lengthier timeframes previously in place.

Barry Jones, head of UK claims at Marsh, commented: “The Ministry of Justice’s claims reforms make it very clear that it is the insured’s responsibility to ensure that potential claims are dealt with expeditiously. The clock will be ticking from the minute the notification of a potential claim is received. Therefore, it is imperative that organisations swiftly educate their colleagues in recognising claims and have a clear process in place for dealing with them, if they haven’t done so already.

“Brokers and insurers also need to adapt their working practices and be adept at performing within the Pre-Action Protocols to manage their clients’ employers’ liability, motor and public liability claims more efficiently. This tripartite approach will help ensure that clients adhere to these strict new timescales, thus avoiding higher legal costs and insurance premiums in the future.”

Marsh’s Liability Claims Healthcheck Tool can be used to review clients’ current claims notification and accident investigation processes; and its Claims Defensibility Review identifies any gaps in policy cover, systems, documentation, and accident response procedures to ensure that effective safety management systems are in place.

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