22 jul 2020
If it sounds too good to be true…the SRA issue warning to firms around cavity wall insulation claims
The Solicitors Regulatory Authority (SRA) has issued a notice to solicitors who “... have not been adhering to our Standards and Regulations when it comes to handling claims about cavity wall insulation”.
My colleagues Ruth De Asha and Stephanie Diaz-Smith had considered the growing cavity wall insulation (CWI) problem in September last year in their post on claims migration and farming.
Ruth and Stephanie drew parallels between claims behaviours in other sectors, such as travel sickness and personal injury claims, and considered the SRA notice issued in respect to travel sickness claims. Their analysis prophetically concluded:
In addition, many of the same issues identified by the SRA in respect of travel sickness claims, and referenced in their warning, are present in CWI claims ... Is CWI the new whiplash/crash for cash/PPI/deafness/travel sickness/etc. (insert or delete as required)? Yes, it unfortunately could be.
They also noted that "claims farming and a perceived necessity are driving claims management companies and law firms into a migration into new areas of claim and legal work that feels greater in both scope and scale than we have seen before. CWI is just one of many emerging areas of farmed claims. As such it is necessary for those of us working in and for insurers and insureds who face these claims to be vigilant and ready for claim surges across different types of claim so that the usual problems (such as managing volume and fraud) can be properly managed".
It is well worth going back to their post and considering what the SRA said then to those that they regulate.
This latest warning from the SRA continues along those themes and appears to confirm our experiences.
"We expect firms to make sure that they follow the standards expected of them and in particular:
- Not to bring any claim unless there is a sound basis for it.
- Be careful to verify the source of any referral. This will help law firms make sure that the claim did not come from cold calling or other poor practices".
Additional related posts on our Fundamentally Honest blog are also useful to consider when thinking about the meaning and impact of this SRA notice. You may find it interesting and helpful to go back over our four part series on Claims Farming and four part The Future Fraud series, particularly Part 4: Industrialisation of claims.
It is evident here that solicitors representing claimants have a responsibility that cannot simply be 'farmed' out. Too often farmed claims coming from claims management company referrals sources are packaged and presented with claimant, evidence and expert as an all-inclusive deal. Due diligence and professional standards cannot be outsourced and I am always reminded by what my mother told me: “if it sounds too good to be true, then it probably is son”.