The first post in this series on litigators and workload got an (unexpected) amount of attention.  As part of the series I want to look at one often overlooked, but crucial, part of the litigation chain, insurers. In particular claims handlers.  Judging by the evidence from recent cases it appears that they are not only overlooked but often overworked. It is difficult to see how the economics of this add up.


The genesis for this post is the Court of Appeal decision in Gentry -v- Miller and UK Insurance Company [2016] EWCA Civ 141. The Court of Appeal overturned an order granting relief from sanctions in a case where an insurer had been extremely dilatory.

The following passage from the Court of Appeal judgment is illuminating:

  1. The appellant quickly submitted a claims notification form through the Ministry of Justice portal utilising the then current Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents, which was then available for claims valued by the claimant at under £10,000. Equally quickly, on 2nd April 2013, the insurer admitted liability and paid the appellant’s stage 1 costs, but the insurer’s claims department, operating under the trade name “Privilege Insurance Claims”, did not follow up that admission with a substantive settlement offer. On 8th April 2013, the appellant’s solicitors sent the insurer a copy of its engineer’s report asking for a cheque for the pre-accident value of the appellant’s car, said to be £16,000. The letter asked the insurer to note that “[o]ur client is hiring a replacement vehicle under a credit hire facility and will continue to do so until receipt of your cheque”. The appellant’s solicitors chased the insurer’s response in no fewer than 5 letters dated 17th April, 2nd May, 17th May, 3rd and 5thJune 2013 asking on each occasion for £16,000 immediately in respect of the vehicle, and reiterating the warning about continuing hire charges. They followed up with a telephone call to the insurer on 28th May 2013, the response to which was that the insurer was not taking calls that day and was only dealing with their policyholders. On 14th June 2013, the appellant’s solicitors wrote again to the insurer saying “[w]e can only assume that this is a complex matter and advise that our file is now being transferred to our pre-litigation department to bring proceedings”. The appellant sent the insurer notice of intention to issue proceedings on 19th June 2013. On 2nd July 2013, the insurer wrote to the appellant’s solicitors asking why they were issuing proceedings “as we are still awaiting the Personal Injury claim from yourselves”. The response was to send the insurer a medical report on 15th July 2013, repeating the previous warnings and asking for an interim payment by return. The proceedings against Mr Miller alone were issued on 3rd July 2013 and served by post on him on 3rd July 2013. The appellant entered a judgment in default of acknowledgement of service against Mr Miller on 8th August 2013. It will be observed that throughout this period, the insurer neither instructed solicitors nor took any steps to protect its position, despite the fact that it had admitted liability on behalf of Mr Miller some months before. Moreover, the insurer was on notice that hire charges were escalating at a rate that it would have been in a good position to estimate. Despite what the insurer later claimed, it cannot have been in any doubt, had it considered the matter, that the claim had ceased to be a low value claim under £10,000, because of the high value of the appellant’s car and the accumulating hire charges. Moreover, whilst the insurer contests that it received all these communications from the appellant’s solicitors, it has produced no evidence to substantiate that contention.


Breaking this down into chunks is illuminating:

  1. There was no substantive settlement offer after the admission.
  2. The insurer failed to respond after the 8th April 2013 when a request for payment of the costs of the vehicle was made (the insurer knew that hire charges were accruing).
  3. The insurer failed to respond to five reminder letters over three months. All that time the insurer knew that car hire charges were accruing.
  4. The insurer failed to respond when the claimant told them that they were now issuing proceedings.
  5. The insurer eventually responded and asked for a medical report.
  6. When the claimant’s solicitor tried telephoning they were met with a message that “the insurers were not taking calls that day” and were “dealing only with their policyholders”.
  7. The insurer took no steps once proceedings were issued and proceedings were issued in default.

It went on after that.  The insurer only made the voluntary interim payment of £14,000 in August 2013; the insurer became liable to pay a total of £75,089  “This large sum by way of damages was made up mostly of hire and other charges.”   There was then a lengthy delay before it applied to set aside a default judgment.


On one view is is surprising that this aspect of the case did not get more publicity in the legal and insurance press. One reason it did not is because it is, I am told, not that unusual. I do not have direct day to day dealings with insurers, however I recently reviewed a case where the claimant had sent 21 reminder letters to an insurer.  There comes a time when a costs judge is likely to conclude that a claimant has gone beyond the realms of reasonableness, reminder letters are worthless and proceedings should have been issued.

Similarly a recent tweet reported points of dispute to a bill including “It is a well known fact that insurers take a long time to reply to correspondence”.   This statement of “fact”, coupled with the sense of entitlement probably speaks for itself.


Put bluntly in most cases this occurs because the claims handlers involved are overworked.  I suspect there is little attempt to assess workload on a “scientific” basis. The claims handlers were clearly overworked, they were refusing to take calls.  As a result a claim that could have been settled relatively cheaply ended up costing £75,000 in damages and £12,000 in costs (that is excluding the costs of the insurer’s applications, the first appeal and the successful appeal).

So a company that, according to its accounts hold £764.6 million in cash; has a net worth of £2.1 billion and assets of £9 billion, is not (or was not) investing enough in its front line.  On the face of it, if this is a common occurrence, then insurers could save more (and make more profit) if their staff were less overworked.


There is guidance produced by airmic in Achieving Best Practice in Claims. This includes

  • Adequately experienced and qualified senior staff to supervise operations
  •  Workload analysis and management of third-party service providers

It may be more of an aspiration that a definitive guide. It does however emphasise that these are matters that require serious consideration.  There is a considerable amount of litigation that could be avoided if resources were put in place at the appropriate level to mitigate damages and deal with cases promptly.


It was the Court of Appeal, in Gentry, that stated:-

“The court cannot ignore that insurers are professional litigants, who can properly be held responsible for any blatant disregard of their own commercial interests”

“insurers are in a particularly good position to conduct litigation efficiently and proportionately and to comply with rules and orders. It cannot avail an insurer in this position to say it was not a party to the claim at that stage. It was directly affected by it and knew that it had to protect its interests from the moment liability was admitted.”


The purpose of these posts is to ask questions. I do not purport to have all the answers. My main concern is that fundamental, and ultimately quite simple, questions are not being asked. It is quite clear that overwork is having a major impact on the way that litigation is conducted and yet no-one talks about it.

It may be worthwhile remembering that I was more than slightly critical of claimant firms who did not maintain a proper workload for their staff whilst making millions in profit, see Advising clients properly and the economics of practice: when drawings are at £9.9 million.

Further many of the problems identified as a result of excessive workload applied to claimant lawyers far more than defendant lawyers (and this is not saying that defendant lawyers do not work hard, it is just that the claimant is required to be far more proactive) .  However this culture of overwork and excessive case loads is, essentially the cause of the vast majority of sanctions cases (and Gentry shows that this applies just as much to insurers).  It is one of those issues that appears not to be discussed (openly at least, I have heard strong views from some in the industry). It is one of those issues where it is possible, even likely, that investment at the appropriate level could lead to savings overall.