Evolving Conflict Resolution in the Insurance Industry

At the AIE 2024, Donald Dinnie, Director at Norton Rose Fulbright, provided insights into the transformation of conflict resolution within the insurance industry. Drawing a contrast between early humanoid conflict management, humorously likened to "clubbing," and today's sophisticated systems, Dinnie traced the industry's evolution towards alternative dispute resolution (ADR) mechanisms. These modern methods, including mediation and arbitration, have become crucial as traditional court systems struggle with significant delays, often pushing trial dates several years out.

Dinnie emphasised the importance of proper documentation and the early collection of witness statements to support the integrity of the dispute resolution process. Given the potential for memory lapses over time, he stressed the necessity of securing objective evidence early on. The new ombud rules introduced have brought a transformative change, enhancing the ombud's ability to make adverse findings against insurers for improper claim handling. This development serves as a wake-up call for insurers to ensure they handle claims with the utmost professionalism and fairness.

The statistics show that around 70% of claims are resolved in favour of insurers, indicating their diligent approach to the process. Dinnie also highlighted the increased use of waterfall clauses in policies, allowing for structured escalation from discussions to mediation and, if necessary, arbitration. This approach helps resolve disputes more efficiently than court litigation. He noted that even in jurisdictions with commercial courts, there is a trend towards using written witness statements, reflecting the industry's adaptation to the realities of modern dispute resolution. Dinnie's insights provided valuable food for thought on how the industry continues to adapt and improve its dispute resolution practices.

Highlights

• Evolution of Conflict Resolution: Dinnie humorously compared early conflict resolution methods to "clubbing," highlighting the progression to modern ADR methods.

• Efficiency of ADR: Emphasis on the increasing reliance on mediation and arbitration to avoid the significant delays in court systems.

• Importance of Documentation: Stress on the need for proper documentation and early witness statements to maintain the integrity of the dispute resolution process.

• New Ombud Rules: Introduction of new rules allowing ombuds to make adverse findings against insurers, enhancing accountability.

• Increased Use of Waterfall Clauses: Discussion on the growing use of clauses in policies that allow for structured escalation from discussions to mediation and arbitration.