The rise in litigation is not due to a single cause. It is the result of several economic, technological and social factors acting simultaneously.<\/p>\n
Firstly, inflation has a direct impact on the amount of compensation awarded. The rising cost of medical services, repairs, long-term care, expert reports and professional fees increases the final cost of claims. This is particularly significant in civil liability cases, where some proceedings can drag on for years.<\/p>\n
In addition to economic inflation, there is what is known as \u2018social inflation\u2019 \u2013 a term used to describe the rise in compensation awards above the general rate of price inflation. This phenomenon is linked to greater sensitivity to harm, higher expectations regarding the conduct of companies and professionals, and a growing willingness to take legal action.<\/p>\n
There is also a trend towards greater professionalisation of claims. Those who have suffered harm have greater access to information, specialist advice and mechanisms for funding litigation. Furthermore, social media enables a dispute that was initially limited in scope to gain widespread public attention in a very short space of time. Consequently, a claim may take on economic and reputational dimensions far greater than initially anticipated.<\/p>\n
Digitalisation has created opportunities for businesses, but also new sources of liability. A computer error, a service interruption or a faulty automated decision can affect a large number of users simultaneously.<\/p>\n
The use of artificial intelligence systems also raises particularly complex legal issues. In the event of damage, it can be difficult to determine who is liable: the system developer, the company marketing it, the professional using it or the entity making the final decision.<\/p>\n
These situations have a direct impact on civil liability insurance. The insurer must determine whether the risk is covered, which policy applies, whether there is a concurrence of insurance cover and whether it is appropriate to take action against other liable parties.<\/p>\n
At the same time, there are areas of overlap between different types of insurance, such as professional indemnity, product liability, cyber risk and directors\u2019 and officers\u2019 liability. If these exposures are not correctly identified when taking out the policy, unforeseen coverage issues or disputes over the interpretation of its clauses may arise.<\/p>\n
Technological transformation is also changing the nature of evidence. In many proceedings, emails, computer records, automated decisions and internal protocols are crucial in establishing whether the insured acted with due diligence. Consequently, the proper retention of information can make the difference between a strong defence and an unfavourable position in court.<\/p>\n
The insurer\u2019s initial response must take place before the loss occurs. Underwriting can no longer be based solely on data such as the insured\u2019s business activity, turnover or claims history.<\/p>\n
Two companies operating in the same sector may present very different risk profiles. An organisation with internal protocols, oversight mechanisms, document traceability and incident response plans offers, in principle, a different level of exposure to one that relies on informal procedures or suppliers it does not adequately control.<\/p>\n
For this reason, underwriting questionnaires must include questions relating to the use of artificial intelligence, reliance on technology providers, outsourcing, data protection, document retention and internal claims management procedures.<\/p>\n
In the case of more complex risks, the insured\u2019s responses should be verified against documentation or through technical interviews. It is not merely a matter of knowing whether protocols exist, but of verifying whether they are actually applied and whether they are suitable for the business carried out.<\/p>\n
The wording of the policy is also of fundamental importance. Definitions, exclusions, excesses, limits, sub-limits and rules on the aggregation of claims must clearly reflect the risk that the insurer has decided to assume. An ambiguous clause can give rise to a coverage dispute and increase the legal costs of a claim that was already complex in its own right.<\/p>\n
Furthermore, the insurer must analyse potential concentrations within its portfolio. Several insured companies may rely on the same supplier, use the same technology system or be exposed to a common event. An individual analysis of each policy may not reveal this aggregate risk.<\/p>\n
The changing nature of litigation also affects the reserves or provisions set aside to cover the cost of claims. In civil liability cases, the initial valuation may vary considerably as proceedings progress.<\/p>\n
Actuarial models based on historical experience remain necessary, but they may react too slowly when there is a significant change in judicial criteria, negotiation strategies or the cost of damages.<\/p>\n
For this reason, the reserve should be constructed by combining actuarial, legal and operational information. From the earliest stages, it is advisable to assess the competent jurisdiction, the quality of the evidence, the number of potential claimants, the existence of other liable parties, the possibility of related claims and the foreseeable cost of defence.<\/p>\n
Cases with the potential for high severity require periodic reviews by multidisciplinary teams. It is also advisable to analyse the differences between initial reserves and the final cost of claims. This exercise enables the identification of potential systematic deviations and allows these lessons to be applied to underwriting and pricing.<\/p>\n
Legal defence should not begin once a claim has already been filed. For the insurer, early intervention allows for the preservation of evidence, the coordination of expert reports, the assessment of potential liability and the identification, from the outset, of cases involving greater financial or reputational exposure.<\/p>\n
This initial assessment facilitates a more accurate estimate of provisions and enables a decision to be made on whether to negotiate or pursue the defence through the courts. The aim is not merely to reduce fees, but to control the total cost of the claim, taking into account potential compensation, the duration of the proceedings and their implications for the portfolio.<\/p>\n
Underwriting, provisions and legal defence cannot operate as isolated areas. Each claim provides useful information on new exposures, shortcomings in the policyholder\u2019s controls or clauses that give rise to interpretative conflicts.<\/p>\n
When this knowledge is shared with the underwriting, actuarial and reinsurance departments, the insurer can review its questionnaires, rates, limits and conditions of cover before a trend leads to a significant deterioration in the claims experience.<\/p>\n
Coordination with law firms specialising in insurance<\/a>, such as Belzuz Abogados S.L.P.<\/strong><\/a>, also makes it possible to anticipate changes in case law and identify emerging risks. In this way, legal defence ceases to be a response limited to individual cases and becomes part of an overarching strategy aimed at controlling claim severity, improving decision-making and preserving the technical balance of the portfolio.<\/p>\n","protected":false},"featured_media":18937,"template":"","categories":[514],"area-de-practica":[225],"publicaciones":[494],"idioma-publicacion":[71],"areas-practica-publicacciones":[],"class_list":["post-21997","publicacion","type-publicacion","status-publish","has-post-thumbnail","hentry","category-sin-categorizar","area-de-practica-insurance-law","publicaciones-alvaro-tojo-ledo","idioma-publicacion-ingles"],"acf":[],"_links":{"self":[{"href":"https:\/\/belzuz.com\/en\/wp-json\/wp\/v2\/publicacion\/21997","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/belzuz.com\/en\/wp-json\/wp\/v2\/publicacion"}],"about":[{"href":"https:\/\/belzuz.com\/en\/wp-json\/wp\/v2\/types\/publicacion"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/belzuz.com\/en\/wp-json\/wp\/v2\/media\/18937"}],"wp:attachment":[{"href":"https:\/\/belzuz.com\/en\/wp-json\/wp\/v2\/media?parent=21997"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/belzuz.com\/en\/wp-json\/wp\/v2\/categories?post=21997"},{"taxonomy":"area-de-practica","embeddable":true,"href":"https:\/\/belzuz.com\/en\/wp-json\/wp\/v2\/area-de-practica?post=21997"},{"taxonomy":"publicaciones","embeddable":true,"href":"https:\/\/belzuz.com\/en\/wp-json\/wp\/v2\/publicaciones?post=21997"},{"taxonomy":"idioma-publicacion","embeddable":true,"href":"https:\/\/belzuz.com\/en\/wp-json\/wp\/v2\/idioma-publicacion?post=21997"},{"taxonomy":"areas-practica-publicacciones","embeddable":true,"href":"https:\/\/belzuz.com\/en\/wp-json\/wp\/v2\/areas-practica-publicacciones?post=21997"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}