General Insurance Article - Scottish PI claims more streamlined with compulsory protocol

 The protocol sets out steps which must be followed prior to raising proceedings. It aims to encourage fair, just and timely settlement of disputes before court proceedings are raised, stop premature litigation and reduce the issues for litigation in cases which aren’t settled. The claimant will also need to provide a reasoned response if an offer is rejected.

 The courts will have clear powers to penalise claimants in cost awards for premature litigation but only where insurers have adhered to the new rules. Costs overall will increase, especially for low value claims, although they will still remain lower than costs in litigated claims.

 Andrew Lothian, Head of General Insurance (Scotland), DWF, said: “The introduction of the compulsory protocol should reduce poor pre-litigation behaviours and premature litigation. Where it does not, then insurers must be wise to asking the court to impose a sanction. To take advantage of the new regime, insurers need to understand the rules and develop systems to challenge any poor pre-litigation behaviour by claimants.

 “While it is unlikely the compulsory protocol will reduce overall claims volumes in Scotland, it should reduce litigation rates and claimant expenses. There is a real opportunity for insurers to make use of the compulsory protocol to keep cases from litigation and make significant cost savings.”