Our September claims club concentrates on industrial deafness claims and puts the new Highways Code of Practice under the spotlight. In June 2015 the ABI reported a flood of industrial deafness claims and concerns over the level of claimant costs. Where are we now a year on? Mark Hart, Senior Actuary at Zurich, discusses the prevalence and severity of noise induced hearing loss claims. In addition our own Nick Parsons, the Forum of Insurance Lawyers representative on the NIHL working party, gives his insight. The much vaunted new Highways Code of Practice is due to take effect in September. Will it mark a sea change in the approach to highways claims or is it business as usual? We also look at how authorities have been preparing for the new Highways Code of Practice. https://www.brownejacobson.com/insurance

1. Claims club
September 2016, Birmingham

2. Revised UKRLG Codes of
Practice – where are we now?
James Fawcett, Browne Jacobson

3. Well-maintained Highway
Infrastructure – revised COP
• Original anticipated release date: October 2015
• Draft version 3 released 1/9/2016
• Comments requested by 12/9/2016
• Aim remains to publish by end September 2016 – unlikely we will
see any significant revision

4. Well-maintained Highway Infrastructure
• Part A: overarching principles
• Part B: highways
• Part C: structures
• Part D: lighting

5. Status of the revised Code
• Revised Code (Draft 3):

6. Status of the revised Code
• Revised Code (Draft 3)

7. Revised Code: overarching principles

8. Revised Code: Collaboration
• The expectation that authorities will work together
remains:

9. Collaboration
• Both internally within the authority and with other authorities
“The authority’s designated corporate risk manager will be a key
point of contact, as will departmental and team risk management
leads”
• Identify the key decision makers
• Find strength in numbers with other authorities?

10. Revised Code: a risk-based approach
remains at the heart of the Code

11. Developing and implementing a
risk-based approach
• Identify risks – intended to cover a diverse range of subjects (risk register)
• Evaluate risks – the likelihood and consequence of a particular event
• Manage risks – a coordinated approach to the management and mitigation of risk.
• Formulate a matrix?*
• Communication and Consultation – “for risk management to be fully embedded in
an organisation the risk management process should be part of normal operations
management”
• Monitoring and review – “Monitoring and review should be dynamic so that as risk
levels change, an organisation’s approach to managing the risk can too”
*Highways Infrastructure Asset Management Guidance Document

12. Developing and implementing the
risk-based approach
• We can expect greater scrutiny of the regime in place –
something we rarely see at present
• Justification of the regime:
 The policy
 Master statement of senior highway engineer detailing
how the policy was established using the risk based
approach – persuasive evidence

13. Network hierarchy

14. Network hierarchy
• Is there an opportunity/appetite to refine or
simplify the current hierarchy?
• Is the current hierarchy fit for purpose?
• Consider the system of review - a dynamic
hierarchy is envisaged

15. Safety inspections
• Section B.5: Inspection, Assessment & Recording

16. Safety inspections – frequency
• Revert to risk based approach – consider if there is there an opportunity to
reduce inspection frequency
• Review – as the characteristics of a highways changes/there are
developments which improve safety, so to will the inspection frequency

17. Defect identification

18. Defect identification

19. Defect identification
• A shift from interventions levels > investigatory levels
(assessment of risk)
• Greater scrutiny of the Highway Inspector’s decision
making – potential to leave the inspector and authority
vulnerable
• Evaluation of risk by reference to the risk assessment
process – provides an opportunity to justify the decision

20. Competency and training

21. Competency and training
• Training prior to implementation
• Ensure competency of contractors
• Practical guidance for inspectors and risk managers
– mock trial to ‘stress test’ procedures?

22. Noise Induced Hearing Loss
6th September 2016
Mark Hart
Senior Actuary, UK ReservingCentre of Excellence

23. Agenda
 What are Noise Induced Hearing
from?
Loss Claims and where do they come
 A bit of history
 Some recent experience
 A few thoughts about the future
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24. What are Noise Induced Hearing Loss (NIHL)
Claims?
 Hearing loss arisingfrom prolonged exposure to high noise levels
almost always in the work placeand therefore impact Employers’
Liability policies
 Claims generally noticed as age related hearing loss sets in
– Averageage of claimant 60 - 65
– Current claims predominantly from 1960s to early 1990s exposures
 Dates employersdeemed to be aware vary by industry – key date of
knowledge is 1963 with a raft of legislation since then.
 UK Insurance industry is currentlypaying around £80m per year
based on workingparty data, of whichthe major component remains
claimant solicitor fees (c.3/4!)
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25. Noise Levels
10 dB - rustle of leaf
20 dB - normal hearing threshold
30 dB - whisper
40 dB - residentialarea at night
50 dB - normalspeechat 1meter
60 dB - busy office
70 dB - loud radio at home
80 dB - street traffic
90 dB - weaving mill or heavy vehicle
100 dB - circular saw or sheet metal shop
110 dB - rock drill
120 dB - propellerengine
130 dB - pneumatic riveting
140 dB - jet engineat 25 meters
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Noise level in dB(A) 80-85 85-90 90-95 95-100 100-110 >110
Number of workers exposed 1,097,000 696,800 273,000 124,000 37,100 4,200
Adjusted 1 band for hearing protection 1,619,600 419,900 138,900 45,790 7,490 420
Adjusted 2 bands for hearing protection 1,224,316 343,663 117,997 38,595 6,303 353
Adjusted 3 bands for hearing protection 1,197,193 336,168 116,937 38,532 6,303 353

26. Prevalence by Occupation
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Occupation
Moderate or worse hearing
difficulty
Sever hearing
difficulty only
Other transport & machinery operatives 16.3
%
2.4
%Construction 11.5
%
5.0
%Material moving & storing 10.7
%
5.4
%Repetitive assembly and inspection 10.5
%
2.6
%Metal processing 8.9
%
2.7
%Other processing 6.6
%
2.6
%Electrical processing 4.9
%
2.0
%Managerial 4.2
%
1.7
%Clerical 3.8
%
2.7
%Selling 3.1
%
1.0
%All occupations 5.0
%
1.9
%

27. The History
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28. Average Cost Per Claim
7,000
6,000
5,000
4,000
3,000
2,000
1,000
-
Average paid including nils by SY Average paid excluding nils by SY
Average legal fees of £10,400per claim!
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29. Legal Aid, Sentencing and Punishment of
Offenders Act 2012 & MOJ Portal
 Resulted in a number of changes including:
–
–
–
Sentencing for first offenders
Restricted the availabilityof legal aid in some cases
Increased powers of deportation of foreign criminalsonce their sentence has been served
Created a new offence of ‘squatting’.
–
 Vehicleused to enact changes to the funding arrangements for third party injury claims.
–
–
–
–
No longer able to recoversuccess fees fromlosing party
Qualified One Way Costs Shifting (QOCS) introduced
ATE premiumless recoverable
Banningof referralfees
MOJ Portal




Introductionof fixed fees for claims in the portal
Increaseof 10% in General Damages
Subset of claims
Didn’treally bite for disease
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30. Recent Experience
Monthly Notifications
12,000
10,000
8,000
6,000
2015 Q4
4,000
2,000
-
05 September 2016
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EL/PL Portal
LASPO
Claimant Solicitor Activity

31. Low qualityof claims
Development of Nil Rate by Notification Year
100%
90%
80%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
70%
60%
50%
40%
30%
20%
10%
0%
1 2 3 4 5 6 7 8 9 10111213141516171819202122232425262728293031323334353637383940414243
Development Quarter
05 September 2016
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32. Settlement Rate
Proportion Closed
100%
90%
80%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
70%
60%
50%
40%
30%
20%
10%
0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41
42 43
Development Quarter
05 September 2016
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33. The Future?
 LASPO & MOJ portal adjustedto be more relevant
 Settlement packs and schemesset up
 Changesto the guidelines for audiology tests
 Introduction of repeat audiograms
 MedCo for NIHL
Some hot topics:
 Implication of de minimis and latent
 Claimant solicitors struggling
hearing loss
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34. Summary
 After significantincreasesthe picture appears to be stabilising
 The increases seen historicallyare not as bad as suggested by the
number of notificationsalone – the nil rate is key, but doesn’t solve
everything
 While some big players are feeling the pressure, reforms have not
gripped NIHL claims in the sameway as some other claim types and
further thought is required.
 Many initiatives in discussion/onthe horizon but a number of known
issues too – the future remains highlyuncertain.
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35. Questions?
Email: mark.hart@uk.zurich.com
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