This article was first published in Insurance Business UK

As a global phenomenon, COVID-19 invites an examination of the past, the present and the future to run alongside each other simultaneously. It’s a truth not lost on Stephen Kavanagh, Managing Director of Davies’ Casualty Claims division, whose team have wrestled with the past, present and future ramifications of COVID on their clients and business.

When the first lockdown happened, he said, there were a few immediate effects on Davies’ casualty division, including  a reduction in claims volumes due to the lockdown. Not being able to go out and visit factories and other places of work to investigate claims meant that virtual technologies were quickly adopted to change the way the wider team worked.

“In terms of COVID-related cases themselves,” he said. “In one sense there hasn’t been a huge amount of change. We, alongside solicitors and others, have provided advice to clients right from the start around making sensible, clearly communicated decisions that are in line with government advice, decisions backed by risk assessments that are updated as the situation evolved. And that’s still the case.”

What has changed, however, Kavanagh noted, is that there is a changing discussion around working from home. Prior to the first lockdown, there was a large contingent of people who were quite heavily office-based but, in the 18 months since, that has changed dramatically. With this shift comes new questions around the suitability of workspaces in the home and the equipment provided by employers – which is only going to become more of a question mark as the future of work becomes less a question and more an item on the agenda of corporations.

Exploring the question of COVID and existing claims, he highlighted the concern surrounding how, during lockdown, certain industries were operating at severely reduced capacity. As an example, he said, a worker in the offshore oil industry would claim they would have been earning X amount if it wasn’t for an accident, but would actually not be earning that figure at all considering that the industry was almost entirely shut down.

“So, there were issues around loss of employability claims,” he said, “even around people who are claiming for psychological injuries – how much of that has to do with the accident you had and how much of it has to do with [the psychological toll of COVID]? Even things like access to health care, access to NHS services for people who are in the rehab phase took on a slightly different dimension just because COVID changed things so completely.

“Also, I think the uncertainty around timescales really threw things. So, you’d have a case that was probably naturally ready to be concluded around say April 2020, but in April 2020 nobody knew how long the lockdowns were going to last or what would be happening. So you were in a situation where judgements had to be made on both sides about how far you’re willing to go to compromise, and that was another effect on the existing claims.”

It’s often the case that people look to the past for data that might predict the future – but given the sheer tumult of COVID, this seems unlikely to yield significant results. Looking to the future, Kavanagh outlined whether he expects to see a dramatic increase in COVID-related claims going forward and noted that while Davies has had quite a few notifications from various employers, it has yet to see many claims, something he does not expect to change any time soon.

Claimant solicitors are going to be well aware that they’ve got real evidential hurdles to overcome, just to establish causation in those cases, he said. It’s difficult for employees to prove that they caught COVID at work, rather than at home or in a local shop. Even if they can establish that they caught COVID at work, it’s not a strict liability situation – they still need to establish that their employer was negligent or didn’t take reasonable care. After all, claimant solicitors are not in the business of chasing lost causes.

Right back at the start of March 2020, there was a flood of solicitors businesses registered with COVID or coronavirus in the name, he said, so some firms were looking at this as a potential revenue stream – and he has seen some of the larger firms targeting specific sectors with advertising. Overall, however, there have been very few claims, despite the significant loss of life incurred by COVID.

“Of course, some families have lost their breadwinner as a result of COVID, other people have suffered long-term consequences by losing their jobs,” he said. “With those sorts of life changing effects it’s inevitable that we’re going to see an increase in claims. But I suppose the question is how much of an increase that will actually be. I suspect some claimant firms are probably casting around looking for those ‘good’ cases where they can establish a precedent and widen it from there.”

An increase in claims is inevitable when starting from such a low base, he said, but they’re likely to be either sector-specific or employer-specific. For the majority of cases, claimant solicitors are likely to take the view that they simply aren’t worth pursuing. Kavanagh also highlighted that the limitation on these cases is three years, so any claims dating from the first lockdown that will be seen will have to come to light within the next six to 18 months given the timeline involved.

“I suspect if there’s going to be an increase it will start within the next six to 18 months,” he said. “And then we’ll see where it goes from there, but if claimants solicitors get initial encouragement, then they will keep looking for more claims. But I think it will be under very specific circumstances and, at least initially, only for the very worst cases.”

For more information on casualty claims solutions, please contact Stephen Kavanagh, Managing Director via stephen.kavanagh@davies-group.com