improving pi claims resolution in the netherlands amsterdam interdisciplinary centre for law and...

Improving PI claims resolution in The Netherlands

Amsterdam Interdisciplinary Centre for Law and Health

ISCRR Melbourne May 4th 2010

The case of the Dutch PI claims settlement reforms:trying to make an adversarial system more user friendly


The Netherlands

• Accidents per year:

Med. treatmt.

Fatal

Road 260.000 + 750

Workplace

160.000 + 80

• Pop. 16,5 mil.• Land 33,883 km2 • 487 inh. per km2 - most densely

populated country in Europe • Roads 135.470 km


Hybrid system Dutch style

• Statutory system of compensation of loss of income in case of disability to work

• Cause of disability irrelevant

• Benefits limited to income support

• Many other restrictions in eligibility, duration and level of protection (max 70%)

• ILO are investigating compliance with ILO conventions


Hybrid system Dutch style

• Tort system, with its principle of full compensation:

– Always amounts to a very substantive addition of compensation

– Often constitutes the only source of compensation (e.g. non-employees, other loss than loss of income)

• Tort system is the focus of the present efforts for reform

• With some minor exceptions, IGER’s involvement and research is limited to the tort system


About 50.000 new cases each year, only a few percent are brought before the courts

About 60% is settled within one year, 80% within two years, and 95% within three years. About 2,5% remains unsettled for more than five years.

PI cases in The Netherlands

0

10

20

30

40

50

60

70

80

90

100

0 1 2 3 4 5 >5

Process duration (years)

Un

sett

led

cas

es (

%)


Schematische weergave bepaling omvang arbeidsvermogensschade

Tijdsverloop

Inkomen

Ongeval Medische Beoordeling/Afwikkeling

Normale einddatumwerkzaam leven

Te kapitaliserenjaarschades

Hypothetisch Inkomen zonder ongeval

Hypothetisch inkomenMet ongeval

X X X

Income

Accident Assessment Time

Income with accident

Hypotheticalincome without accident

Normal ageof retirement

Yearly damages to be capitalised

Schematic outline assessment loss of income


PI claims settlement process

Assessment of damages

Earning cap.assessment

& rehab.

Medicalassessment

Establishmentof liability


Non-pecuniary needs of PI victims and their relatives

1. ‘Acknowledgment’

A. Specifically by the opposing party that he was at fault that he realizes the consequences for the victim by offering apologies by his making the situation as bearable as possible

B. By the opposing party, the outside world and the victim’s own social environment of what has happened to the victim by being taken seriously that not the victim, but the opposing party is responsible that the opposing party is liable

C. By the receipt of financial compensation

2. Wanting to know what precisely happened3. Calling the opposing party to account4. Not wanting to suffer for someone else’s error5. Wanting to obtain justice6. Wanting to prevent the same thing from happening to someone else


Psychological aspects PI claims settlement process• Secondary victimisation

• Secondary gain

[state of the art identification of methodological flaws in existing empirical evidence of adverse health outcomes of PI compensation processes: Genevieve Grant & David M Studdert, Melbourne Law School – see 33 MULR(3) 2009]

• Need for ‘emotional recovery’

• Procedural Justice (PJ)


Positive potential of adversarial tort system with regard to non-pecuniary needs

1. Adversary procedure2. Formal nature (especially of court proceedings)3. Institutional legal rituals (both in- and out of court) - the right to be heard - the hearing of both sides of any argument - the right to confront adverse witnesses and experts - the right to call one’s own witnesses and experts

• maximize the opportunity to confront the wrongdoer• maximize the opportunity to tell one’s own story• maximize the opportunity to participate• maximize the victim’s personal opportunity of exerting influence on the outcome• grant the victim dignity and respect• express the importance that society attaches to the case• increase confidence in the correctness of the outcome


Discrepancy in PI claims settlement process

The virtually exclusive focus on

financial compensation

The great importance victims

attach to needs of a non-

pecuniary nature


This discrepancy is all the more problematic because of the following:

Failure to fulfilnon-pecuniary needs

PromotesSecondary victimisation

Secondary gainImpedes recovery

Fulfilment ofnon-pecuniary needs

PromotesEmotional recoveryProcedural justice

Promotes recovery

And this while recovery should take precedence over compensation!



“A compensation regime that does not take reasonable steps to address the therapeutic needs of the claimants is one that cannot achieve its professed restitutionary goals. As is made clear in this study, money alone cannot heal.”


Feldthusen et al. 2000


Frame of reference for reform: pos & neg aspects PI process

Positive aspects Negative aspects

Being provided with adequate information (in terms of content, comprehensibility, dosing and timing)

The feeling of not being provided or being insufficiently provided with information

Participation in and control over the settlement process

The feeling of having no control over the settlement process

Opportunity to tell one’s own storyWrongdoer/opposing party avoids direct contact

concerning emotional dimension

Being able to confront the wrongdoerUnnecessary polarization of the relationships

between the parties

Respectful and dignified approach

The feeling of not being taken seriously, of being mistrusted and not being believed. The necessity of undergoing repeated medical examinations

Friendliness, openness and justification by the opposing party of his conduct in the interaction

Perception of the opposing party as impersonal, cold, cynical, and solely bent on minimizing the compensation as much as possible

Confidence in the impartiality of the decision when a third party has to decide the dispute

The feeling of also losing out in court to the omnipotence of the insurance company


Merits of conclusion on ‘positive potential’

• ‘Yes we can’=> inspiration for improvement within existing tort system

• Reform agenda => determinants of PJ part of the objectives of reform• Identification of a legal obligation to reform => recovery takes

precedence over compensation• Full realisation of potential? => probably not very realistic

• Not: real indication that other systems (no-fault, first-party ins.) would have less ‘potential’ for promoting PJ=> no empirical proof (and not plausible – e.g. more manageability)


Reform initiatives – and role of IGER therein 1. Self regulation (e.g. Codes of Conduct, professional standards, protocols)

=> CoC Handling PI claims: developing / promoting tools to implement change (online dossier, claim resolution plan, various tools med. assessment phase)=> CoC medical injuries: participating in drafting & implementation process=> developing professional standard of insurance physicians

2. Legislation => introduction of ad hoc limited judicial intervention in out of court settlement of PI claims - instigation of bill & instruction of judges on out of court settlement process=> bill on emotional loss of secondary victims – rejected in last moment by senate

3. Improvement of settlement process=> promoting personal contact – developing tools & training claim handlers=> promoting emotional recovery - research on and promotion of apologies & other means of addressing moral and emotional harm=> identifying & promoting legal obligations and remedies obliging insurers to respect non-pec. needs=> instigating / supporting improvement of services (legal and other) provided to PI victims

4. Victim empowerment=> RCT with interactive info- and support website (employing e-health insights and methods in PI claims settlement)=> collecting and disseminating quality- and other info on providers of legal services

5. Medical injuries => project on the implementation of existing research insights in taking care of victims of medical injuries

6. Promotion and instruction, promotion and instruction, promotion and instruction


The dispute resolution process continuum

Negotiation Conciliation ` Litigation

Mediation Arbitration

more adversarial

less adversarial

(After King et al. 2009)


Ad hoc limited judicial intervention in out of court settlement

Negotiation Conciliation Litigation

Mediation Arbitration

The judge ‘cutting knots’ and steering settlement process


Promoting personal contact• Pilot by several Dutch administrative bodies concerning

procedure of handling administrative complaints and petitions• Personnel to take up direct contact with citizen as soon as

possible by means of telephone call, before putting complaint / petition further through formal administrative procedure

• Results of this rather modest intervention:

• 40 to 60% of complaints / petitions were informally settled in one way or another and withdrawn from formal procedure

• Eventually some departments could be scaled down in size to such extent that retraining program for personnel had to be initiated


Promoting emotional recovery

• Empirical research: suffering a wrong disrupts moral and emotional balance between wrongdoer (WD) and victim (V)

• V experiences moral and emotional injustice

• Need for ‘emotional recovery’ as well as financial recovery

• V needs WD (and his agents – e.g. insurer) to take responsibility for accident and its consequences


Promoting emotional recoveryProperties of PI claims settlement process:

• V has to make claim, take initiative, suffer the burden of proof• Insurer appears to be able to allow himself a passive attitude

=> carries across implicit message that not wrongdoer/insurer but V is responsible for solving problem of damage caused

• WD doesn’t pay compensation himself, generally no direct communication between WD and V, WD often not even aware of consequences for V => V experiences that WD does not take responsibility

• Out of court settlement – no decision by judge => no formal establishment of moral responsibility of WD for accident

• Also no symbolic acknowledgement of moral responsibility of WD by insurer

• ‘Taboo trade-off’: PI cannot really be compensated by money


Apologies by wrongdoer

‘Acknowledgement’ by agents

Promoting emotional recovery


Elements of apology by wrongdoer

• Acknowledgment of responsibility for wrongdoing and its conseqenses

• Expression of compassion

• Undertaking of action: compensation and prevention


Elements of ‘acknowledgement’ by wrongdoer’s agents:

• Acknowledgment of responsibility for wrongdoing and its conseqenses

• Expression of compassion

• Undertaking of action: compensation and prevention


‘Acknowledgement’ not only in words but also in practice

• Insurer/agent must take and keep initiative in resolution process• Behaviour of insurer/agent should carry across implicit message

that insurer/agent and not victim is the ‘owner’ of the problem that mistake was made and damage was caused, which now has to be managed, assessed and compensated

• Resolution process should favour determinants of Procedural Justice:– Information– Involvement– Voice– Consultation– Respect

improving pi claims resolution in the netherlands amsterdam interdisciplinary centre for law and...

Documents