EWJ 60 April 2025 web - Journal - Page 94
Claims Handling:
Exiting Claims Early
When it comes to effective claims handling, resolution strategies should be considered from the
outset. In our first claims handling article of 2025, we delve into the potential strategies you could
use at various stages of a claim, with particular focus on exiting claims early.
In most litigation, the objective will vary from case to
case depending upon the type of claim, the type of
claimant, the relationship between the parties, the
merits and the value. However, on the whole, early
consideration should always be given to the economics of any dispute and whether “the fight is
worth the candle”.
Alternatively, if a claim looks weak, spurious and/or
exaggerated, different decisions are likely in order
best to manage the pre-action stage; possibly to make
it as unattractive as possible for a claimant to issue formal proceedings or to protect a defendant’s position
if, despite the risks, a claimant ploughs on anyway.
This is not an uncommon scenario when dealing with
some litigants in person or poorly advised claimants.
As a result, when managing a claim it is important to
try to reach an early view on the merits, risks and likely
outcome, in order best to determine strategy. This can
be refined as the matter progresses, which might
change specific strategy considerations, but an early
view is crucial so economic and tactical decisions can
be taken at each stage.
Pre-action strategies
It’s hard to say “sorry”, but sometimes that can be
the right thing to do (with indemnity insurer’s approval!). Policyholders might understandably feel aggrieved by a complaint, but ought to avoid the
temptation to allow the matter to escalate unnecessarily. Good claims handling can take an objective view
and see where nipping an issue in the bud might be
possible. However, this should also include ensuring
that the policyholder complies with or does not breach
any regulatory obligations as a part of any resolution.
In solicitor’s cases one needs carefully to consider the
risks of own interest conflicts when trying to “do the
right thing” and making sure clients are told to seek
independent legal advice.
For example, if breach of duty seems a forgone
conclusion, one can consider whether early admissions are likely to be sensible to minimise costs.
Equally, attention can be focused on whether the claim
remains defensible on other fundamental elements,
or strategy needs to be directed towards mitigation
and an interrogation of quantum. This in turn will
guide decisions about where it is reasonable to allow
costs to be incurred – both own and the claimant’s – as
well as where any pressure points might be and how
and when those can be best exploited as part of an exit
strategy.
EXPERT WITNESS JOURNAL
Requests for client files are usually a precursor or
first warning of a claim and decisions need to be made
about how or how far to engage with them. Regulatory obligations might determine a client’s right to
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