Tony Dempster Herbert Smith LLP, Partner

1. Claims Management • Tony Dempster • Herbert Smith LLP, Partner

2. Claims Management Introduction • EEWG: challenges presented by the new ELD regime • Purpose: • Enhance development of claims expertise needed to cope with challenges that ELD claims present • Initiate discussions with competent authorities to develop plans for co-operation: insurers will expect degree of control and influence in decision making process on remediation if expected to pay costs • Assist generally with the development of insurance products to provide effective cover for operators’ responsibilites under ELD

3. Claims Management CEA Paper on Enhancing Sustainable Insurance Solutions : Claims Management (Section 5) • New claims management skills likely to be required: • Insurers wealth of experience in handling claims, including highly complex and technical claims • Involved at a very early stage taking control of claims under existing civil liability regimes covering ‘traditional damage’ • Insurance industry less experience of the process under the rules of public/administrative law • ELD also introduces new liabilities and remedial measures of which key stakeholders involved (including the insurance industry) have very little experience • Insurers need to develop new expertise in handling claims associated with those liabilities

4. Claims Management • Matters to be considered: • Development of best practices for handling claims: benefit of environment but without excessive cost • What techniques exist to restore environmental damage in the most effective and cost efficient manner? • Exercise by insurers of control of claims: development of effective working relationships with competent authorities

5. Claims Management Call for close co-operation with the competent authority • Competent authority will either approve preventative or remedial action by responsible operator or require responsible operator to take necessary preventative or remedial measures • Insurers significant interest and wish to be involved in this decision process

6. Claims Management • Development of effective working relationships with the competent authorities to ensure insurers able to manage business properly and competent authorities comply with their responsibilities • More important in cases of cross-boarder damage involving more than one competent authority

7. Claims Management Claims handling : questionnaire for steps to be taken • Claims handling determined by scope and limits of insurance policy: • Scope of cover vs. liability of insured operator • Types of remediation covered • Limits/sub-limits including legal costs • Notification requirements on insured operator under policy

8. Claims Management • Questionnaire: assessment of environmental damage and appropriate steps (Annex 7.4) • Underwriting assessment: useful data for claims management: • Business/activities of insured • Environment of the insured sites • Emergency plans

9. Claims Management • Environmental damage/imminent threat • Type of activity : occupational/non-occupational • Causal link • Fault/negligence • Third party? • Initial assessment of environmental damage • Identification of applicable laws and competent authorities

10. Claims Management • What is possible by way of remediation? • Status report on measures initiated • Specialists • Gathering of relevant loss information • Determination of environmental damage • Assessment of significance of adverse effects/risk to human health • Establishment of baseline condition • Identification and choice of remedial options • Monitor outcome of preventative and remedial measures

11. Claims Management Future developments • Close collaboration between underwriters and claims managers • Collaboration between insurers and competent authorities to enhance development of claims experience THANK YOU FOR YOUR ATTENTION!

12. For more information www.cea.eu CEA aisbl Square de Meeûs 29 B-1000 Brussels Brussels 13 February 2008