Other Sessions
Day One
High Net Worth
For those delegates who enjoy the finer things in life, Mark Dalrymple, director at Tyler & Co and a Chartered Loss Adjuster specializing in art loss, gave an update on several latest cases.
One of the examples he highlighted concerned the theft of “the Madonna with the Yarnwinder”, a painting by Leonardo da Vinci, which was stolen from the Duke of Buccleuch’s house at Drumlanrig in Dumfries, Scotland in 2003. The painting was successfully recovered in October 2007 and the case culminated in a trial in Edinburgh High Court earlier this year.
The painting was insured in the Lloyd’s of London insurance market for £3.81m – a small percentage of its market value.
According to Mr. Dalrymple, the claim was accepted under the terms of its original policy within a week of the theft. Buy back agreements were negotiated and a reward for recovery was immediately issued and published internationally.
This meant the painting, which was estimated to be worth about £30-£40m, was owned by both the Duke of Buccleuch and the Lloyd’s Underwriter in equitable proportion.
The “Madonna” was recovered after an undercover police operation, liaising with Mark Dalrymple, who “agreed” a £4.2m reward payment to one English solicitor for its safe recovery. However, five people were subsequently arrested in Glasgow at a solicitors’ office where the painting was being held.
After a six week trial earlier this year, Edinburgh High Court found two Scottish solicitors not guilty of extortion and three others - one English solicitor and two private detectives from Liverpool - “Not Proven” – a unique court decision under Scottish law.
The English solicitor (who was suspended by the Law Society and is now under criminal investigation by Lancashire Police for the admitted theft of approximately £800,000 from his clients’ accounts) has since made a series of complaints against: the Lloyd’s Underwriters, Dumfries & Galloway Police, Serious Organised Crime Agency, Procurator Fiscal, Police Complaints Commissioner and the Home Office.
Because of the provisions of the Theft Act of 1968 and its Scottish equivalent, specific conditions were incorporated into the reward offer. These included safe recovery and Police approval, which was not granted. Mr. Dalrymple rounded off the case by reflecting on the legal considerations and requirements relating to the offering and payment of rewards, a unilateral contract with the public at large, together with some case law and public policy issues.
Another case study involved damage to an extremely high value Impressionist painting. This involved 4 different legal jurisdictions, 2 policies covering the same painting by the same insurer, and myriad complexities regarding interpretation of the policy, insurable interest, valuation of the painting and measure of loss, subrogation & contribution options, 2 distinct restoration alternatives, 3 possible methods of sale, and finally, apportionment of any recovered monies with discussion as to the relevance of the decisions in the Lord Napier case.
Anti-Fraud
The problem of fraud was thrust into the limelight during the first day of the conference, a problem that is estimated to cost the insurance industry £1.9bn a year, according to the Association of British Insurers.
Bobby Gracey, vice president of Global Counter Fraud Solutions at Crawford & Company, told delegates attending the Anti-Fraud afternoon sessions that the industry still had a lot of work to do to tackle the problem.
"During the past five years the industry has made great progress in identifying claims fraud by introducing more robust fraud strategies, business measurements, technology, trained fraud specialists & education/awareness programmes.
“It is however clear that there is still significant work to be done when the value of undetected fraud is estimated to be costing the industry and its consumers at least £1.9b per annum.”
Mr Gracey said a key priority must be the evolvement of the Insurance Fraud Bureau, outside of staged motor accidents.
“So much still needs to be done in sectors such as personal lines, commercial, travel, healthcare and creditor.
“This can however only occur in a non competitive environment where our collaborative strategic objective would be to reduce fraud exposures and costs, for the benefit of the genuine majority," he added.
This was followed by an entertaining role play by John Freeman and Neil Daniel, who transported delegates to the steps of Southwark Crown Court in London while exploring the dangers of a “DIY adjuster”.
In the sketch, John Shrappractice, a loss adjuster, and Neil Knewbetter, a fraud investigator, emerge from the Court “looking forlorn and disgruntled”.
Standing behind them is Charlie Coverit, an insurer, in conversation with Les B-Avenue, a detective sergeant. They look down on Messers Sharppractice and Knewbetter shaking their heads because the insurance fraud case of Toby Tryiton has collapsed after just four days in court …
The role play outlines how Mr Sharppractice believed he had the accused “banged to rights” because the prosecutors had surveillance footage, bogus documents and telephone records. He blames the fraud investigator for Mr Tryiton’s escape.
It emerges that the case had run into difficulties from its outset when the case was first reported. Mr Sharppractice responds by claiming that he knew what he was doing because he had completed fraud training as part of his CILA fraud exams. He also completes his company’s fraud e-learning each year.
“That’s just fraud awareness,” adds Mr Knewbetter. “Investigating fraud’s a lot more complex than that – you need to know what you’re doing and be professionally qualified to investigate.”
Mr Sharppractice is then asked whether he knew what CPIA (Criminal Procedure and Investigations Act 1996) means. It emerges that he does not know and a catalogue of errors emerge from his handling of the case including a failure to keep detailed and accurate notes. He had not disclosed all of the evidence he knew before the case and the fact that he had obtained Mr Tryiton’s phone records through “a mate going out with my niece” who works at a telephone company. He had also obtained video evidence that breached human rights records.
The conversation ends with a frank exchange between the two men.
“Do you know what you’re going to do next time,” ask Mr Knewbetter.
“Get a professionally qualified investigator in as soon as possible?”
“That’s right.”
Claims Consultancy
Elsewhere, during the first day of the conference, Stephen Baker, a qualified mediator at law firm Boyes Turner spoke about the options available for disaffected policyholders during the Claims Consultancy afternoon session.
After setting out the difficulties and challenges of litigation – and the impetus from the courts to encourage out of court settlements – he explained why traditional negotiations between parties often fail.
The talk then centred on why mediation has become the core alternative dispute resolution process. Mr Baker explained the mechanics of the process before extolling its virtues as a powerful and flexible method for the parties to reach a settlement over which ultimately they themselves have control with the mediator using his skills as a neutral third party to facilitate negotiations.
The benefits in terms of potential costs savings and speed over the traditional litigation process were also set out as were important distinctions that make mediation so effective. These included the fact that the mediator does not impose a solution on the parties or decide who was right and who was wrong as a judge might.
The mediator’s role was explained as a catalyst to settlement with the single aim of being to help the parties reach a consensus. Settlements can be reached that a court cannot order and the parties to the dispute can truly end up in a “win win scenario”.
Who Wants to Be a Loss Adjuster
The record number of attendees proved that the CILA technical conference is poised to grow from strength to strength.
It is also becoming more and more diverse, with the traditional Loss Adjuster base now being supplemented by insurers and brokers.
Mark Graves, property & marine claims manager, at Mitsui Sumitomo Insurance, said: “The CILA Conference was a very thought provoking and well organised conference with some excellent speakers dealing with some very complex technical matters. I was very pleased to have been invited and shall make every effort to attend next year.”
Before proceedings were wrapped up, delegates were treated to a game of the old favourite “Who wants to be a Loss Adjuster.” Although, Chris Tarrant was unavailable to take the session, Andrew Moncrieff of Hawkins proved to be an able deputy.
With a year full of challenges ahead, the CILA continues to show why it remains an integral part of not only the UK but global insurance industry.
Jamie Dunkley
