Which public liability areas are seeing rising claims and why?
Which public liability areas are seeing rising claims and why? | Insurance Business Australia
Legal Insights
Which public liability areas are seeing rising claims and why?
Claim farming is one driver, says Clyde & Co expert
Legal Insights
By
Daniel Wood
In 2024, Luke O’Kane (pictured above), a legal expert in public liability claims and regulatory investigations, is being promoted to partner at global insurance law firm Clyde & Co.
In a media release announcing his promotion, O’Kane said his area of speciality “is continuously seeing rising market demands.”
The Clyde & Co lawyer, who leads a team of seven, acts for insurers in cases including complex personal injury, general liability, historical sexual abuse, property damage and professional indemnity claims.
What’s driving all these claims?
Insurance Business asked O’Kane to explain what’s driving this rising demand?
“We are continuing to experience a significant increase in the number of claims being made across the entire casualty space,” he said. “While some of these may be motivated by acute, societal pressures, others are being driven by our changing perception and understanding of past behaviours.”
O’Kane said more Australians are becoming comfortable with using the legal process to pursue justice when they are victims of alleged wrongs.
“The availability and willingness of plaintiff law firms is increasing access to courts in ways never before seen,” he said.
Sexual abuse claims are still high
O’Kane said one example of a public liability area that has seen “considerable growth in the number of claims across the country” is cases of historical sexual abuse.
This Royal Commission, announced by the government in 2012, delivered a final report in 2017. The inquiry involved more than 8,000 private sessions with survivors and delivered numerous recommendations. One focus of the recommendations – for example Recommendation 12.6 – significantly increased the risk management obligations of institutions involved in caring for children.
“There can be no doubt that the Royal Commission was an important tool in the empowerment of survivors,” said O’Kane.
Claim farming
However, he said there is a downside to the otherwise very positive work of the Commission.
“An unfortunate consequence has been the rise of either unmeritorious claims or claims which are made due to the increasing role of claims farmers in the area,” said O’Kane. “I am sure that governments across the country are closely monitoring the growth of claims in this area and considering all possible avenues to ensure that valid claimants continue to receive appropriate compensation.”
Disability challenges
Disability care is another public liability area where O’Kane and his team have handled complex and challenging cases. He said this is a relatively new litigation area and suggested these early cases are setting important legal precedents.
One recent case, he said, involved Federal Court actions on behalf of a large disability care provider in defence of regulatory proceedings brought on behalf of the National Disability Insurance Scheme Quality and Safeguards Commission (NDIS Commission).
“The proceedings were commenced following the fatality of a service user in care and were the first regulatory prosecution to be brought following an alleged breach of the NDIS Act,” said O’Kane. “Given the infancy of proceedings in this area, we were able to materially contribute to the sentencing principles that the Court will look to implement as well as set a precedent when it comes to determining penalties and fines for alleged breaches of the NDIS Act.”
In December, the NDIS Commission started civil penalty proceedings against Aurora Community Care (Aurora), in relation to the death of a 38-year-old man who was an NDIS participant.
Another driving force behind the increasing number of disability care cases, O’Kane said, is “the increasing public scrutiny on the role and cost of the NDIS.” As a result, O’Kane said “it is very likely that this case [involving Aurora] will be critical to the establishment of regulatory proceedings into the future.”
2024’s insurance law challenges and AI
2024 is shaping up to be a big year and, he said, with the increasing number of claims, clients are applying “greater pressure” to ensure their claims are managed “as efficiently and cost-effectively as possible.”
O’Kane said artificial intelligence (AI) is helping his firm meet this challenge.
“We are constantly looking for ways to utilise our existing knowledge and experience to achieve the best possible outcome for our insurer clients,” he said. “While in the past this has been limited to the knowledge of practitioners, Clyde & Co has been at the forefront of combining market leading legal intelligence with artificial intelligence and process automation.”
O’Kane said partnering with companies including AI technology providers and cloud suppliers has helped improve service with “tangible” results, including lowering costs for clients.
How do you see the challenges in the public liability space? Please tell us below
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