Amsterdam Interdisciplinary Centre for Law and Health

1. 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

2. The Netherlands • Pop. 16,5 mil. • Land 33,883 km2 • 487 inh. per km2 - most densely populated country in Europe • Roads 135.470 km

3. 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

4. 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

5. 100 90 80 70 60 50 Unsettled cases (%) 40 30 20 10 0 0 1 2 3 4 5 >5 Process duration (years) PI cases in The Netherlands 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.

6. Schematic outline assessment loss of income Hypothetical income without accident Yearly damages to be capitalised Income Income with accident Accident Assessment Normal age of retirement Time

7. PI claims settlement process Earning cap.assessment & rehab. Assessment of damages Medical assessment Establishment of liability

9. 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)

11. 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

12. Discrepancy in PI claims settlement process This discrepancy is all the more problematic because of the following: Failure to fulfilnon-pecuniary needs Impedes recovery Promotes Secondary victimisation Secondary gain Fulfilment ofnon-pecuniary needs Promotes Emotional recoveryProcedural justice Promotes recovery And this while recovery should take precedence over compensation!

13. Discrepancy in PI claims settlement process “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

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

15. 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)

16. 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)

17. Reform initiatives – and role of IGER therein • 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 • 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 • 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 • 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 • Medical injuries=> project on the implementation of existing research insights in taking care of victims of medical injuries • Promotion and instruction, promotion and instruction, promotion and instruction

18. The dispute resolution process continuum (After King et al. 2009) Negotiation Conciliation ` Litigation Mediation Arbitration more adversarial less adversarial

19. Ad hoc limited judicial intervention in out of court settlement Negotiation Conciliation Litigation Mediation Arbitration The judge ‘cutting knots’ and steering settlement process

20. 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

21. 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

22. Promoting emotional recovery Properties 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

23. Promoting emotional recovery ‘Acknowledgement’ by agents Apologies by wrongdoer

24. Elements of apology by wrongdoer • Acknowledgment of responsibility for wrongdoing and its conseqenses • Expression of compassion • Undertaking of action: compensation and prevention

25. Elements of ‘acknowledgement’ by wrongdoer’s agents: • Acknowledgment of responsibility for wrongdoing and its conseqenses • Expression of compassion • Undertaking of action: compensation and prevention

26. ‘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