Why All the Noise Over Deaf­ness Claims?

With oc­cu­pa­tional deaf­ness claims up as much as 50% over the past two years, Kin Ly looks at whether claims farm­ing are to blame and asks what the in­dus­try can do.

Insurance - - CII COLUMN -

The in­surance in­dus­try has seen a sharp rise in oc­cu­pa­tional deaf­ness claims over the past few years, a trend that looks likely to con­tinue with lead­ing in­sur­ers fore­cast­ing fur­ther in­creases for 2012. Three of the UK’s largest in­sur­ers – RSA, Zurich and Aviva – have said in­creases are a re­sult of claims farm­ing. In the last two years, RSA has seen a 50% in­crease in new noise in­duced hear­ing loss claims, and pre­dicts a fur­ther in­crease for 2012, while Zurich has pro­jected a fur­ther 25% rise for this year – a trend it wit­nessed in 2011 when it saw deaf­ness claims in­crease by 25% on 2010. Ad­di­tion­ally, Aviva also saw a 25% growth in such claims in the past two years.

Claims Farm­ing

In­sur­ers say the rise is pre­dom­i­nately a re­sult of claims farm­ing and mar­ket­ing ef­forts used to en­cour­age com­pen­sa­tion claims. While ev­i­dence of deaf­ness claims farm­ing in par­tic­u­lar is thin on the ground, gen­eral re­ports of farm­ing sug­gest it is preva­lent among the in­dus­try as a whole, with re­ports of face-to-face cold call­ing and text mes­sages, as well as mar­ket­ing ef­forts in the form of TV and ra­dio ad­ver­tis­ing.

Com­pared with other dis­eases, oc­cu­pa­tional deaf­ness claims have one of high­est re­pu­di­a­tion rates. Ac­cord­ing to RSA, 50% of the in­surer’s deaf­ness claims were de­clined, which it says could be linked to claims farm­ing bring­ing in il­le­git­i­mate claims. Where dam­ages are agreed, RSA typ­i­cally pay over 60% of the over­all set­tle­ment to the claimant’s so­lic­i­tor.

Zurich also noted a sim­i­lar trend, re­ject­ing higher num­bers of deaf­ness claims. Mike Klaiber, claims disease man­ager at Zurich, says, “The qual­ity of deaf­ness claims re­ceived is gen­er­ally poor, for ex­am­ple, le­gal li­a­bil­ity is not of­ten at­tach­ing. This sug­gests that be­cause of the na­ture of claims farm­ing, many deaf­ness claims tend to be spec­u­la­tive.”

He adds, “There ap­pears to be lim­ited fil­ter­ing, which has re­sulted in claims be­ing in­ti­mated

with­out much ex­am­i­na­tions of the mer­its. Anec­do­tally, this ap­pears to be a trend wit­nessed across the in­surance mar­ket and not just at Zurich.”

Chang­ing Claims Land­scape

With this rise, the in­surance in­dus­try is now re­ceiv­ing more claims from those work­ing in light to medium en­gi­neer­ing in­dus­tries, as well as from those work­ing in heavy en­gi­neer­ing en­vi­ron­ments.

The change in land­scape sug­gests work­ers in light to medium en­gi­neer­ing en­vi­ron­ments could be tar­geted by claims farm­ers, says Faye Glasspool, di­rec­tor of UK legacy at RSA: “We’re re­ceiv­ing claims from sec­tors that are us­ing light ma­chin­ery as well as your typ­i­cal noisy heavy con­struc­tion en­vi­ron­ments that have gen­er­ally been the pro­duc­ers of claims in the past. Medium to heavy en­gi­neer­ing em­ploy­ees have been tar­geted al­ready and now it seems that smaller pol­icy hold­ers from light en­gi­neer­ing jobs are be­ing aimed at.”

Zurich has also ex­pe­ri­enced this change first hand, re­ceiv­ing claims from a num­ber of peo­ple work­ing in light in­dus­tries in­clud­ing store­men and painters and dec­o­ra­tors. While the in­surance in­dus­try gen­er­ally be­lieves claims farm­ing are one of the con­tribut­ing fac­tors to deaf­ness claims growth, the Claims Stan­dards Coun­cil – a trade as­so­ci­a­tion that rep­re­sents claims man­age­ment busi­nesses – dis­agrees and says the growth is down to union cam­paigns and ed­u­ca­tion.

Andy Wig­more, pol­icy di­rec­tor at the coun­cil, says: “I have not noted any prolific ad­ver­tis­ing or claims farm­ing with re­gards to deaf­ness claims – it is very easy to see who does what be­cause reg­u­la­tion is quite tough, par­tic­u­larly around ad­ver­tis­ing. The rise is down to the unions and their abil­ity to ed­u­cate the mem­bers more so than claims farm­ing.”

Of the 1,000 claims man­age­ment com­pa­nies that the Claims Coun­cil Stan­dard mon­i­tors, not one has put for­ward a deaf­ness claim no­ti­fi­ca­tion, Mr Wig­more con­firms.

What Can the In­dus­try Do?

De­spite dis­crep­an­cies in the de­bate over whether farm­ing has contributed to the rise in deaf­ness claims, there ap­pears to be a real is­sue around the use of mar­ket­ing meth­ods to source po­ten­tial claimants.

The in­surance in­dus­try stresses it is com­mit­ted to paying out com­pen­sa­tion where it is owed, but needs to clamp down on farm­ing. Ms Glasspool sug­gests in­sur­ers need to raise aware­ness of claims farm­ing and the po­ten­tial ef­fects it has on the in­dus­try. She also pro­poses that the So­lic­i­tors Reg­u­la­tory Author­ity should look at some of the al­le­ga­tions made, and the in­surance in­dus­try as a whole needs to take a firmer line.

Farm­ing has been an is­sue for some time, where ag­gres­sive mar­ket­ing has re­sulted in high num­bers of whiplash claims over the years. What is clear is that the in­dus­try has ex­pe­ri­enced an in­crease in deaf­ness claims as high as 50% in the last two years, with some in­sur­ers pro­ject­ing fur­ther rises. With­out a se­ri­ous clamp down on farm­ing, deaf­ness claims could soon be­come the new whiplash. i 1. The med­i­cal ex­am­i­na­tion: the claimant is un­able to jus­tify that they have a hear­ing loss sus­tained as a re­sult of their work­ing en­vi­ron­ment. 2. Lim­i­ta­tion: an in­di­vid­ual has three years to make a claim af­ter be­ing made aware of any loss in hear­ing or other hear­ing in­juries as a re­sult of their work­ing en­vi­ron­ment. How­ever, it is now dif­fi­cult for claimants to say they were not aware of the op­por­tu­nity to claim af­ter union cam­paigns of the 1980s and 1990s. 3. Prov­ing li­a­bil­ity: it is dif­fi­cult to prove the em­ployer is li­able for any hear­ing in­jury sus­tained.

Deaf­ness claims

Deaf­ness claims are gen­er­ally de­clined on three com­mon grounds:

Case study: Baker v. Quantum Cloth­ing and oth­ers

Zurich de­fended a high pro­file de­ci­sion of the Supreme Court in April 2011, re­lated to the test case Baker vs Quantum Cloth­ing and oth­ers.

The test case con­cerns the li­a­bil­ity of em­ploy­ers in the knit­ting in­dus­try of Der­byshire and Not­ting­ham for hear­ing loss shown by em­ploy­ees dur­ing the years prior to 1 Jan­uary 1990 – the date when the Noise at Work Reg­u­la­tions 1989 came into force.

Seven test cases were put for­ward, of which six were dis­missed as there was no ev­i­dence of noise-in­duced hear­ing loss (NIHL).

One claimant, Mrs Baker, did have NIHL aris­ing from ex­po­sure to noise be­tween 8589 deci­bels dur­ing her time at Quantum be­tween 1971-1989.

How­ever, the court ruled that Quantum had not breached its du­ties at com­mon law or un­der sec­tion 29 of the Fac­to­ries Act 1961 to keep the work­place safe.

By a ma­jor­ity of 3:2, the Supreme Court ruled that em­ploy­ers were not li­able for in­jury caused by ex­po­sure to noise of less than 90 deci­bels be­fore 1 Jan­uary 1990.

In re­sponse, Mr Klaiber says: “The de­ci­sion re­in­forces the his­toric stan­dard for noise thresh­old at which em­ploy­ers are held li­able for any hear­ing loss and that this should not change ret­ro­spec­tively in the light of bet­ter present day knowl­edge.”

The ar­ti­cle is re­pro­duced with the per­mis­sion of the Char­tered In­surance In­sti­tute and it first ap­peared in the Aug/Sept 2012 edi­tion of The Jour­nal.

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