A Code of Conduct for Negotiating Personal Injury Claims: Structuring the Shadow of Tort Law
TISCO Working Paper Series on Civil Law and Conflict Resolution Systems No. 001/2007
54 Pages Posted: 28 Mar 2007
Date Written: March 2007
Victims of road traffic accidents often have great difficulty in recovering damages through the tort system. They spend time, incur costs, and experience uncertainty and stress. Victims regularly complain about treatment that is not consistent with procedural justice values such as respect, voice, and neutrality. Secondary victimization of some sort is likely to occur. The insurance companies that are their opposing parties complain about high costs, uncertain outcomes, and unpleasant experiences in the claims-handling procedure because of its adversarial nature. From an economics perspective, these elements may be called the transaction costs of the tort system.
The aim of this paper was twofold. In the first place, it reports on a project carried out in the Netherlands to develop procedural rules for improving the process of negotiating personal injury claims. This has resulted in the Dutch Code of Conduct for Handling Personal Injury Claims. The process of development was an interactive one: key players in the field, coming together in expert meetings and contributing in other ways, identified the problem areas the Code would have to address, established the form of the Code (mainly best practices), the options for best practices, the preferred best practices that are now to be found in the code, and the mechanisms to induce compliance. The Code of Conduct and its development are supported by key stakeholders: the Dutch Ministry of Justice, organizations representing victims, organizations of insurers, and most (though not all) organizations representing professionals working in the field of personal injury.
Second aim of this paper was to evaluate how well the parties have done in this collaborative development process and its results. An evaluation may be conducted on the basis of various perspectives. In this paper, we chose the following perspectives: transaction costs; the needs of victims as derived from victimology research and procedural justice; negotiation theory; conflict resolution theory; and consensus building theory. The results indicate what parties did well and where there is room for improvement in future applications of this unique and promising process.
Keywords: negotiation, personal injury, procedural justice, consensus building, dispute resolution, tort
JEL Classification: D70, D74, K13, K40
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