28 Sep 2008

Id News

ROGER FOORD examines the need for ‘registered email’ to keep lawyers at bay

The London insurance market is taking email as a strategic part of its business more and more. This might or might not be a sensible or in some areas desired thing but both casual and business email is now used as part of everybody’s life and it is quite easy to get blasé about its use. In London it has become universally used because brokers and underwriters do not have to be too technically literate, IT departments are not involved and it is also part of their normal personal life.

Text messages and emails are already part of the language in any ‘family or divorce’ court, because people are using them without proper caution and thus finding that authorities can look historically at telephonic information. This has also been the case with misuse of the internet by sex offenders. Nothing seems to be untraceable.

The London insurance market is using more and more emails for contracts, changes to the contract, endorsements and claims information. At the same time these emails are automatically likely to be accepted as part of any agreement between the client/broker and the London underwriter.

One has to presume therefore that litigation, for example a disputed claim after contract changes having been made using email, will give rise to the requirement for the insurance legal profession to get involved.

It might not be well-known but both Outlook and other email systems are easy to amend, even after ‘sending’. If an underwriter denies having received an email and the broker sends it again, the ability to change the detail of the second email is easy and it is left to the ‘judge’ in such a case to decide which is the correct version. In the US this usually results in the judge rejecting both documents.

If in the UK a broker sends a registered package to an underwriter or several underwriters then the only legal position is that the package has been received, not that the content has been seen.

To be responsible, therefore, the market in London, which is taking on endorsements with email at a fast pace, needs to ensure that electronic systems are not just introduced willy-nilly but with the added security of thought through and well advised use.

The London market reform group need to get to grips with this issue at an early stage before the ‘e’ horse has bolted and the legal profession come riding down Lime Street.

In the US the insurance industry has come up with a solution (RPost) whereby email is registered. This gives them a completely different status from normal emails and includes within the email undisputable IT evidence of both the content of the original message and also all other relevant and essential data such as time and date sent. This information is irrefutable and unchangeable.

To send such an undisputable bit of information to the several underwriters on the ‘slip’ is also cost effective as it does away with having to send several registered postal items for one ‘email’ to them all.

If the London market, because of the continued push for electronic documents, starts to increase its reliance on email then this crucial issue needs to be addressed as a matter of urgency. Currently Aon and Willis’ in London have taken the RPost initiative. But this is not an individual broker or underwriter issue, but a market requirement.

As the cost is so low, implementation is simple ( no more than 30 minutes on a bad day!) , it is one issue which should be addressed, understood, agreed as essential for all market email transactions and made compulsory.

Lawyers have always made a good living out of the short comings and disputes, in terms of small print, of the London and global market and the proof and content of a registered piece of postage has been often been part of the case for or against a claims payment.

At a stroke ‘registered’ email can prove beyond doubt the existence of contract change and whether the London market wants or doesn’t want electronic trading, this simple piece of technology needs market support.

This is a crucial requirement for the London market at this moment in time and with the technology direction being pursued.