Proclaim understands that conflicting interests can sometimes arise across our diverse client base. Although such situations are rare, we have internal procedures in place to manage the issues involved and ensure our clients’ interests remain paramount.
Having regard to our service model, conflicts generally arise in two types of situations:
1. Where our interests may be inconsistent with a client’s interests
2. Where our client’s interests are inconsistent with another client’s interests.
These typically arise: Where we act for two or more clients in respect of the same claim. In these cases we use a cooperative claim model (outlined below) to protect all parties’ respective interests.Where we are nominated as claim agent for an insurer for over-excess claims, and also manage the under-excess claims for a corporate entity or insured. In the vast majority of these cases the interests of the insurer and the insured will coincide. However, in rare cases where those interests diverge, we follow our conflict protocol outlined below. RISKS and why we need to manage conflict. In the cases where we are engaged by 2 or more clients in the same claim – the risks presented by conflict are:
- That we will not act in the best interests of one or other of the parties to the claim – our duty of loyalty
- That information in the possession of one party may be compromised – our duty of confidentiality
- A perception that a large client will get looked after better – our duty to not put our interests before that of our clients
- That our interests in gaining two fees from the one claim are at odds with the interests of our clients – our duty to not put our interests before our clients
Our conflict management policy
In the event that there is a potential conflict of interest our protocol is as follows:
- clearly identify the client or clients
- determine whether a conflict of interest exists
- decide whether the representation may be undertaken despite the existence of a conflict, i.e., whether the client’s consent could be an appropriate cure
- if so, consult with the clients affected under paragraph (a) [any clients affected by a concurrent conflict of interest] and obtain their informed consent, confirmed in writing
- if client consent is not forthcoming, withdraw from acting for the second or subsequent parties with a conflict to the first party we represented. In cases where conflict can be managed under minimum protocols include:
- Separate Account Manager for each client
- Preservation of confidential information by ensuring it is quarantined from other Account Manager
- Observation of cooperative protocols
- If two clients are co-defendants – can this situation be managed under our conflicts policy?
If both parties consent, the claim can be managed under our cooperative model, with separate Account Managers representing separate interests and safeguards regarding the confidentiality of information. Please see the explanation of our model in the Appendix to this document.
- If one client is a defendant and one a third party joined by that defendant – can this situation be managed under our conflict policy?
In this case the conflict may be more difficult to reconcile and we will need to consult with the third party client to gauge whether the conflict can be managed.
- If one client is a defendant and another client a third party joined by another defendant – can this situation be managed under our conflict policy?
This is somewhat different to the previous scenario as the client thirds party has not been joined by our other client. It may well be possible to manage the conflict presented by this situation. If one client is a plaintiff and one client a defendant – can this situation ever be managed under a conflict policy
Conflicts between our clients: claim co-operation model
Claims may involve multiple parties – such as a property owner, managing agent, cleaner, security, sub-contractor etc. In these situations, the various parties involved face heavy cost exposures if small claims escalate unnecessarily because of lack of co-operation between parties who are all potentially liable for the loss. When costs for each party average 30% or more of liability in issue, having 3 parties to the litigation can mean – if they don’t approach litigation sensibly – that costs collectively can outweigh the amount in issue. For claims worth less than, say, $100,000, we consider it far more economical for multiple parties to cooperate by sharing information and agreeing their respective contributions as soon as possible. This, in turn, allows the parties to adopt a unified strategy in settlement negotiations with a claimant, and often leads to better outcomes, with significant savings. Where we act for more than one client in relation to the same claim, we ensure that separate account managers are appointed to act for each client. However, to ensure that potential conflicts are minimised, we encourage our clients agree a basic framework for contribution for smaller claims based on typical scenarios and support proactive settlements based on agreed contribution. Where conflicts cannot be reconciled, we need to involve the insurer or their representative to take over conduct of the action.
Conflict between an insured and insurer
There are occasions when we are nominated as claim agent for an insurer for over excess claims, and also manage the under excess claims for the insured. In the vast majority of cases the interests of insured and insurer coincide and we are able to continue acting for both clients with the common purpose of getting the best possible result in the claim. To this end, we have two distinct units in our company: the Corporate Unit (managing the under excess claims directly for the company) and the Insurance Unit (managing claims on behalf of insurers). Within each unit, specific Insureds and Insurers are allocated their own account manager, who acts for their particular client’s best interest.If the insurer asks us to continue managing the claim (i.e. the majority of situations where there appears to be no indemnity/coverage issues and it is in the best interests of the claim to be managed seamlessly) then the insured and the insurer can either agree:a. That the Corporate account manager continue to manage the claim for both insured and insurer; or b. That the over excess claim file be sent to our Insurance unit for handling by an Insurance account manager for the insurer, whilst the insured’s Corporate account manager handling the under excess claim continues to act to for the insured.Even under option a, it is important to remember there may still be rare cases where the interests of an insured and their insurer subsequently diverge during the ordinary course of a claim. An example of this is when new information is discovered that causes an insurer to review, or perhaps even withdraw, policy coverage. When these situations arise, the insurer can elect to either:
- Seek independent advice from its own solicitors; or
- Ask an account manager in our Insurance Unit for coverage advice and/or to assume management of the claim on the insurer’s behalf.
The Corporate account manager will notify the insured of the developments and continue to act to protect the insured’s interests in the claim and in respect of any coverage decisions.We have strict and robust internal protocols in place to ensure that your files are protected and account managers are not allowed to look at any files that are not theirs.
Internal proclaim office information exchange protocols
While we favour cooperation between prospective contributors, however, that co operation does not extend to free access to another party’s file on the same claim. Our corporate insured clients and/or their insurers for whom we may act, should feel confident that all information provided to us will only ever be used in their best interests and will not be disclosed to potential contributors or defendants without their prior approval. In the interests of providing guidelines for the sharing of information between account managers, we have the following “Information Exchange Protocols”. The purpose of these Protocols is to minimize the potential for a conflict of interests between Proclaim Clients (insureds and/or insurers):
- The Protocols assume that there are two account managers our office whose Clients are involved as potential contributors or defendants in the same claim.
- Account managers will not access each others’ files (including unfiled documents or correspondence) on the same claim.
- In the event that an account manager requires information, a status update or other claim documents that may reside on the other account manager’s file, the account manager in need will approach their colleague with a formal request.
- The account manager from whom the information or documents are sought will decide whether or not his/her Client’s best interests are served by disclosing the information or documents. The account manager may elect to disclose part of the information or documents sought or alternatively provide a summary of its content.
- If an account manager determines that it would not be in his/her Client’s best interests to disclose the requested information or documents, the decision should be promptly conveyed to the account manager who made the request.
- If in doubt about the potential for conflict over the disclosure of information or documents, account managers are to refer to their Clients for specific instructions and/or approval. If litigation is imminent or underway, disclosure principles will also influence account managers’ decision-making on information exchange.
Note:- Conflict issues involving friends or family Where a team member is assigned a claim where they know the claimant, either as a friend or family member, there is the potential for a conflict of interest to arise. In those cases it is better for both the team member and the claimant to have the claim assigned to another team member who does not know the claimant. This avoids any potential difficulties if there is an awkward coverage or liability position that needs to be taken, and it also ensures the claimant that the claim is being treated with total impartiality. The procedure in the event a team member knows a claimant as either friend or family is as follows:
- The team member handling the claim will bring the claim to the attention of his or her Manager and explain to the claimant that they will be unable to manage the claim and that another team member will manage the claim.
- The Manager will reassign the claim to a team member who does not know the claimant who will take over conduct of the claim.
- If the Manager has initially taken conduct of the claim, they will be required to advise their Manager of the potential conflict and ensure their Manager agrees to proposed transfer strategy. All claims, which are transferred in this regard, will be recorded in a Conflict Register.
Conflict issues prohibiting proclaim acting for you
Finally, we acknowledge that there will still be occasional conflict situations that cannot be overcome or adequately addressed using the various protocols set out above. An obvious example would be a situation in which we act for an insurer in denying a claim for coverage, but a subsequent claim is then made against the broker for professional negligence. In this kind of situation, we consider it would be inappropriate for Proclaim to act in relation to the broker’s PI claim, given our previous conduct in relation to the underlying claim.Our early recognition and honest assessment of any conflict issues that are serious enough to prohibit Proclaim from acting in good faith on behalf of all relevant parties, ensure that our clients’ interests always remain at the forefront of our commercial approach.