David Curran Partner – Flynn O’Driscoll MII Workshop Mediating Insurance Disputes 14th October 2016 David Curran Partner – Flynn O’Driscoll

Contact Us Contact Us David Curran Our Dublin office: Partner 1 Grants Row, Lower Mount Street, Dublin 2, Ireland Phone: +353 1 6424220 Fax: +353 1 6424220 Partner E: davidcurran@fod.ie P: 01 6424265 www.fod.ie

Pennywise or Pound Foolish? Insurance disputes lend themselves to mediation. Prime candidates. Complex policy wording/ coverage and economic issues not best suited for litigation. Settlements can be more comprehensive and creative compared to the black or white litigation outcome. It can assist in the reduction of costs, resources and time. Cap on litigation expenses. www.fod.ie

Why not? Reluctance and ignorance of the process and outcomes. A clear roadmap of what is hoped to be achieved and what is hoped to be avoided. Insurers need to buy in to the process and see a gain, even if only costs containment. Mediation is predetermined to produce a payment to a policyholder. Payment expectation. Process fruitless. Sign of weakness. www.fod.ie

What type of disputes? Coverage analysis/refusal Indemnity payment levels Professional Indemnity Policy Building cover Domestic/ Commercial Motor private/fleet D&O cover Almost any type of policy written in Ireland save where there is multiple insurers on cover. Tower insurance/excess layers. www.fod.ie

Key elements to insurer mediation Timing. Exhaust all internal complaint issues/challenges with the insurer first. Consider mediation as opposed to arbitration as is normally allowed for in the policy. Understand the reluctance and seek to address same. Outline benefits to all parties. Allows for an open and frank exchange of positions and to clearly put forward complex policy considerations in a non-adversarial arena. Will allow all sides to air their positions and provides an ability to revaluate based hearing each other’s arguments. Think of Murphy ’s Law! No case so strong that it can’t be lost or so weak that it can’t be won! Flexibility of approach encouraged, if wrong or partially wrong, a changed position can be adopted. Complex issues teased out. Such issues maybe not suitable for the costly court process and the binary outcome of such litigation. No policy is every fully watertight. Costs/benefit analysis. www.fod.ie

What about Consumer Protection Code 2016 (and preceding legislation) 90% of all policyholders are categorised as consumer as per the definition of a consumer contained in CPC. A consumer is a person or entity with an annual turnover of €3m or less. Chapter 7 of the code would apply. Dealing with claims. Chapter 2 of the code in dealing with the customer fairly. Treating their interests equal to the insurer. The integrity of the market. Dealing with matters with due care, skill and diligence. www.fod.ie

Effective Insurance mediation: Identity the nature of the dispute and establish if mediation is suited. Is there a difference in quantum of settlement only? Would policy cover dispute lend itself to mediation? What about vague terms being relied upon? Could allow a resolution and an opportunity for insurer to amend terms of policy. Identify positive outcomes for all parties, irrespective of result. Even if someone paying out or taking a lessor figure, identify the win on all sides. Choice of mediator? One or two? Lawyer and underwriter/ senior insurance broker. Should there be a battle over the choice of mediator or consensus. What relevant expertise is required? Lawyer or insurance background or both. A must to have a mediator with expert insurance knowledge. They can guide, question and prod/challenge from an expert insurance angle. www.fod.ie

The process No correct or incorrect way. This is limited only by all participants and their creativity in generating a process suitable to hear the dispute. Co-mediation. Pre-mediation position papers. Plenary session and then singular sessions with mediator. Mediation binding or non-binding? Likely hazards. www.fod.ie

The process Avoiding a non-committed party from simply seeing out their policy obligations. Costs of speedier resolution outweigh benefits. Over lawyering the process. Is there actually a place for a barrister to be acting for a party to a mediation? Undue delay. One party embarking on informal discovery. Mediation proposed at wrong time. Non client centric. Commercial in outlook. www.fod.ie

Examples of success Failures Cover challenge on refusal of claim under a commercial property policy for a fire. Issue one of validity of costs being claimed. Arbitration stayed to allow for mediation. Subrogation action mediated on level of quantum. Both sides realised in mediation that position not as strong as they thought. Failures Settlements can be more comprehensive and creative compared to the black or white litigation outcome. It can assist in the reduction of costs, resources and time. Cap on litigation expenses. www.fod.ie