Re: insurers. I have worked on the other side (doing the exact same thing) for an insurer. We always had our claims estimates maxed "just incase." I'm sure the actuarials hated it but we needed to make sure we didn't get blind-sided if a claim suddenly blew out. When an insurer admits negligence in one of these cases it really is a blank cheque.
"This is how insurance companies estimate claims outstanding which is just negative WIP." Sorry, not really. We contract out of maximum cost provisions so we can charge people whatever we want, and the insurers have no idea what we charge. The insurer looks at the cost of the claim as a whole, but they cannot have regard to our WIP because they don't know what it is.
"I mean do law companies have a reason such as those information will give their competitors an edge or something like that so that's why they can't disclose?" To be honest, it sounds like you know a hell of a lot more about accounting than I do. I can't really confirm or deny a lot of what you have written, but I can answer this question.
1. Yes, it would give competitors an edge to know what each other charge;
2. Yes, they guard information such as how much a case settles for and how much is deducted in fees/disbursements for that reason;
3. As of 1 October 2015 the State Insurance Regulatory Authority (SIRA) was set up and now every case we settle, both the insurer and the law firm have to report on the following:
i. Settlement amount;
ii. Deductions;
iii. Estimated amount due to claimant.
4. The insurers fill in their paperwork separately to us, so they are still in the dark about how much different firms charge;
5. Presently, this is just an information gathering exercise. No laws are going to be changed and no firms are going to be asked to refund excessive fees charged; but
6. For anyone working in and/or investing in personal injury (in particular CTP reliant firms, both plaintiff and defendant) watch this space - if the NSW government regulates fees and/or claims this could have a huge impact on how much money we make;
7. Although that doesn't sound like good news, any change is likely to take years to come into effect the way our legal and legislative system works.
I hope this has been of some benefit to you! Cheers.
SHJ Price at posting:
67.0¢ Sentiment: Hold Disclosure: Held
(20min delay)