The Litigation landscape for Bodily Injury claims is ever evolving and presenting challenges today like never before. In 2014, the Financial Services Commission of Ontario (FSCO) conducted a closed claim study for Bodily Injury claims that occurred in 2005 (Automobile Insurance Third Party Liability Bodily Injury Closed Claim Study in Ontario) This was compared to a much earlier study from 1987, the Report of Inquiry into Motor Vehicle Accident Compensation in Ontario by the Honourable Mr. Justice Coulter A. Osborne.

A number of key variables stood out in this study. In 1987, the average disability period was two months; this rose to seven months by 2005. The percentage of claims involving psychological injury rose from 1.1% to 36.2%. Lastly, the number of claims that resolved without legal Action having started declined from 77% to 16%.

This decline and shift to moving matters through the litigation cycles represents an ever growing demand on claims departments to have an efficient and effective litigation management process.  Doubtless, the need for qualified experienced resources will remain a constant challenge; given rate experience is leaving the industry.

The industry is now faced with another challenge; an anticipated significant increase in special damages claims being brought under tort for Medical/Rehabilitation and Income Replacement Benefits. This is paramount with several members of the plaintiff bar already indicating the likelihood that they would eschew the LAT process entirely and pursue denied benefits directly under tort.

Litigation adjusters are arguably an insurer’s most valuable senior technical resource. They manage the largest cumulative loss exposures and largest allocated expense; the costs associated with the retention of external defence counsel. Ideally, these individuals work in concert to identify and implement the most effective and efficient means through which to resolve matters. However, given the challenges, there is a higher chance that claims are handled in a rhythm that favours procedure over purpose.

As an industry we cannot afford to continue to bog down the most expensive and experienced resources with claims that churn through an overburdened system.

In order to succeed we need to consider breaking the cycle of claims that fall into the reactionary drumbeat that is procedural litigation, and distinguish the cases that demand purposeful litigation.

Change the drumbeat to a new rhythm that includes an unequivocal approach to claim resolution. Consider how to transit over 30 years of experience to the front line Bodily Injury staff so that they can identify opportunities to resolve files.