Industry braces as full effect of pandemic and whiplash claims reform coinciding yet to be seen

It is still too early to gauge the full impact of the Covid-19 pandemic and associated claims coinciding with the introduction of part one of the whiplash reforms, said Paul Holmes, partner at law firm DWF. 

Speaking during Insurance Times’s latest Fraud Charter roundtable on 8 June, held in association with Carpenters Group, Holmes said: “I think the industry is expecting to see coronavirus disease claims being filed. Our [third party administrator] side of the business has certainly seen some of these coming through.

”We also know that certain legal providers and accident management companies’ claims filers have gone into the business of trying to gather the data for [these types of claims].”

Although the industry anticipates more Covid disease claims on the horizon, Holmes noted that insurance firms also need to be aware of potential long Covid claims being made against employers.

Considering the public were warned not to visit GP surgeries during the peaks of the pandemic, proving or disproving whether coronavirus was contracted in the workplace could be tricky without clear medical records.

Long Covid could also present an opportunity to layer claims with an additional ailment.

Mark Allan, manager of fraud and financial crime at the ABI, added: “The exposure angle needs to prove that there has been exposure in the workplace, not the wider community.

”I would have thought that it is quite difficult to prove when it has been contracted due to lengthy incubation periods and different severity in symptoms.”

Furthermore, the availability of personal protective equipment (PPE) could be challenged within these claims too, said Donna Scully, director at Carpenters Group and Fraud Charter chair.

Holmes continued: “Proving causation is difficult, but that then gets into a very complex discussion – potential different levels of liability, exposure and balance of probabilities. It is going to be a challenge, but we are already seeing some of these claims coming in.”

However, greater volumes of such claims will take a while to hit the market, Holmes predicted.

He gave the example of emissions claims for car manufacturer Audi, which only started to pick up 12 months ago despite initial problems with the car maker’s diesel engines being reported in 2015.

This involved duty of care allegedly being breached as the company supposedly used software to cheat diesel emissions legislation, bringing former Audi boss Rupert Stadler under scrutiny.

Suggesting the Health and Safety Executive (HSE) guidance as a starting point, Allan added that claimants could find it hard to establish a breach of duty for their employer if certain Covid measures were being used at the workplace, for example implementing working bubbles, staggered start and finish times and having adequate ventilation.

These difficulties in establishing causation draw parallels with asbestos claims, Allen continued.

“The House of Lords did not want claimants left in a difficult position where they had to prove that a single strand of asbestos had been inhaled in a particular place, so they adopted a different causation test,” he said.

Claims farming risks

Meanwhile, Laura Horrocks, fraud assessment and intelligence manager at Sedgwick, pondered whether Covid disease claims could be challenged in a similar way to travel and sickness claims.

She said: “The claimant will have to evidence that they have exposure in the workplace but no other setting.

”They could also be exposed in a secondary setting if they have a family member who is out in the supermarket - then there is wide reaching exposure.”

Care homes were also flagged as an area of concern, with claims management companies (CMCs) targeting this sector for Covid claims. Scully said care homes were of particular interest to claims farmers because they are “rife for claims”.

Carpenters Group head of public affairs Andy Thornley added that many individuals were released from hospitals and into care homes without being tested for Covid-19, adding fuel to the fraud fire.

Ben Fitzhugh, national head of intelligence at BLM, said that while he has seen an uptick in opportunistic discrimination claims around wearing face masks, he has not witnessed an increase in fraudulent CMC activity - but “the caveat to that is never say never”.

Fleur Lewis, GoCompare’s head of fraud, added that while door knocking scams have subsided, investment bond scams have started to resurface, as well as clone websites and calls into the office claiming to be from bailiffs demanding payment, threatening to remove furniture and personal items should they not get paid.

Holmes said he has seen cases of people impersonating Covid inspectors in order to conduct thefts as well.

Scully stressed that it is important to stay alert, especially as staff continue to work from home or as firms adopt a hybrid way of working.