The Value of Expertise in Claims and Technology

A fascinating and recently reported claims case shows why London market carriers value their Experts so highly, but it can be a dangerous job for some of them. The case also demonstrates the huge importance to claims practitioners of maintaining and managing electronic archives containing full and un-redacted information on losses.

It was reported that the UK High Court struck out a claim brought against 10 Lloyd’s insurers by a Greek ship-owner in a dispute over the loss of the Brillante Virtuoso in 2011. In a judgment handed down on the 10th May Mr Justice Flaux said the story given by ship-owner Marios Iliopoulos was a “complete fabrication” and that he had deliberately misled the court.

The ship caught fire in 2011 near Aden having reportedly come under fire from Somali Pirates. Experts found no evidence of attack from pirates or damage from RPGs or small arms from outside, but there was damage from inside. Instead, the insurers brought a counterclaim against Iliopoulos’s company, Suez Fortune Investments, which accused it of a “massive conspiracy” and of deliberately scuttling its own ship.

A British marine shipping surveyor and consultant Captain David Mockett was brought in to investigate the incident and he believed that the attack on Brillante Virtuoso was carried out by a criminal gang as part of an insurance fraud. He was killed by a car bomb in Yemen shortly afterwards.

According to a BBC report from 2012: “Anti-terrorism police said Capt Mockett “obviously upset somebody” when he became suspicious about a claim on a tanker supposedly attacked by pirates. The Plymouth coroner recorded a verdict of unlawful killing.

Insurance Insider reports that the case centred on an electronic archive containing full and un-redacted information on the loss of the ship, which the claimant had failed to produce to the court despite a court order. Iliopoulos said the archive had changed hands several times with other parties, and therefore he was unable to provide it to the court or the defendant’s lawyers.

Flaux said he did not believe the claimant’s story of the “to-ing and fro-ing” of the archive. “In my judgment, Mr Iliopoulos was always unwilling to hand over the archive, irrespective of whether there was a court order.” he said in the judgment.

As ever, information and claims data are central to court cases and this particular story highlights that message. As the Lloyd’s website explains, risks around the business written within Lloyd’s are specialist and complex in nature. These inherent features of the business naturally lead to the use of and reliance on expert judgement.

Expert judgement employed by all manner of professionals within the Lloyd’s market has become a key feature of the way that Lloyd’s manages its risk through underwriting, reserving and capital provisioning.

Claims technology companies play a key role in helping Managing Agents to document and maintain each and every piece of judgement so that it can be evidenced. Moreover, it is clear that Write Back functionality allowing Managing Agents to interact fully with the market’s central claims is now an essential service for claims managers with important responsibilities which include keeping Lloyd’s expert judgements up to date.