Informal Settlement Conferences

By Derek Blackwell

As well as undertaking factual investigations of liability matters, loss adjusters can engage in investigating a claim and running a claim to a resolution whether that be a claim settlement with a third party or denying liability to a third party. As part of this process we regularly attend Informal Settlement Conferences.

The Process

The first part of the process is when information and instructions are received from the insurer. After reviewing this, a factual investigation is carried out so that all of the facts are known and can be substantiated. This is particularly important so that I am well prepared as to what to expect. Contact is then made with the claimant and/or their lawyer with a view of arranging a settlement conference. I always insist that the claimant is there as well as their lawyer so that we can get a better feeling for what the claim is all about. There is nothing like eyeballing someone to know what the truth is likely to be.

I have attended hundreds of settlement conferences during my life as an adjuster. On one occasion I attended the offices of a solicitor in Geelong. His client  had consumed cleaning fluid which was somehow mixed into her morning coffee. On the way to work the claimant became seriously ill and when at work an ambulance was called and she was transported to St Vincent’s Hospital in Melbourne. The outlet where she had purchased her coffee refused to disclose the product data sheet to the treating doctor. She was just about to undergo a stomach pump when the insured’s head office made contact with the hospital, providing all of the necessary details.

Most of the above was not known to me at the time of the conference, or included in the claim notification papers. Adding insult to injury, the insured had mislaid or lost several demands from the third party, making the third party even angrier, and forcing her to the services of the solicitor.

When I arrived at the claimant’s solicitors’ office his file was somewhat larger than mine! I only had instructions to settle for $5000, though it was clear the extent of the injuries suffered were not appreciated at that time. The claimant was thoroughly annoyed, not having received an apology or assistance. Following several phone calls with my instructing principal that matter resolved at $20,000 all inclusive. This was considered by all to be a very fortuitous outcome.

On another occasion I attended the claimant’s solicitor’s office where the “claimant” was both mother and son. The son had crushed his fingers (but fortunately not broken them), in the doorway of a shopping centre. The Insured had sensibly assisted in the resolution process by apologising and delivering a Tonker Truck on the second day of my informal meeting. What was not known to me at the time was that the mother suffered from depressive anxiety disorder and was hospitalised for 2 days as a result of this incident. The matter settled at $3,000 all inclusive.

The above two examples demonstrate the importance of disclosing all information before the settlement process can begin.

In another incident I was acting for an engineering company who had provided defective bearings to a government research vessel who claimed $360,000 for repairs and lost revenue. We identified the bearings that damaged the propeller seals and the vessel had to be dry docked. The claim consisted of both insured and uninsured components of the claim.

An Informal Settlement Conference was held at the government contract shipyard and government representatives were present via telephone conference. After one and a half days negotiating we shook hands at $175,000, which was a great outcome.

Some time ago I was involved in a matter where a child pricked his finger on a syringe in an Adelaide cinema where the syringe had been left on a cinema chair. I made contact with the parents showing empathy and ensuring that all of out of pocket expenses will be met and that we will do whatever we can to assist the medical process. It was an agonising nine months for both the family and the writer until the medical all-clear was given. The parents were clearly relieved, and at my final meeting I admit to having a tear in my eye also. I had a telephone conference with the claims manager, and as a result of that discussion we agreed to fly the whole family (mum and dad, son and daughter) to the Gold Coast Sea World Nara Hotel. Insurers paid for air flights, accommodation, and theme park entries. “Mum and Dad” agreed not to pursue the matter further.

This highlights that by showing empathy for a legitimate claim, and becoming involved in the process, that a good and acceptable outcome can be achieved to the benefit of everyone.

In another matter, and whilst on holiday in Adelaide, I had become aware that a statement of claim had been issued in the magistrate’s court for $80,000 in a matter I was handling for a hire car driver who slipped and fell. An appearance needed to be filed in court and the insurer had asked me to make urgent contact with a solicitor who agreed to an impromptu Informal Settlement Conference. I had no instructions from London Underwriters. It was always understood, though, that when underwriters had been put on notice that it was a matter for settlement on best possible terms rather than attempt to defend it. I lined up lawyers just in case conference “fell over”. Whilst I had no instructions, I counted the claimant’s expectations of $80,000+ costs with an offer of $20,000 all inclusive, which quantum was in my view reasonable. What transpired was that the lawyers that I instructed gained an extra 28 days before we needed to file an appearance in the court.

The liability loss adjusters at Technical Assessing are proactive and can jump in and assist in an urgent situation, and settle while the court process is going through, making the whole process more efficient.

We are also proficient at professional indemnity claims. In one case a building consultant gave a pre-purchase inspection report to a propose purchaser saying everything was fine with the home, except it wasn’t. It was subsiding badly.  We were of the opinion that the insured was clearly negligent despite the insured having the opposing view. At that informal settlement, the third party was represented by both a solicitor and a barrister. Their expectations were of a settlement of well in excess of $100,000, acting on behalf of a third party. We settled at $90,000, based upon inspection reports, claims for out of pocket expenses and repair costs. Had this proceeded, the costs alone could have exceeded this.

The clear advantages of a settlement conference include:

-        A quick and speedy resolution of the claim;

-        At the best possible cost to insurers; and

-        The ability to close a potentially long-tail claim in the most economical way.

All our liability team at Technical Assessing are experienced and knowledgeable in this process, and our clients can feel comfortable with us handling their Informal Settlement Conferences where applicable.