In the immediate aftermath of Claims Direct announcing it was in Administrative Receivership, a few things became clear very quickly. Firstly, those that could escape quickly, ran. This was true from the very top with senior managers abandoning ship within hours of the announcement (including my boss). Everyone else seemed stunned into a spooky calm, waiting for instruction. I have to admit that Deloitte moved very quickly to try and calm the unease, though they could do little in reality for most of the staff who knew the axe would be falling sooner rather than later.
I remember finding out that not only was the recent conference invoice in a pile of “creditors” there were some pretty huge unpaid invoices from the previous few years which reflected the devil-may-care attitude of the company and the champagne lifestyle that they had enjoyed even when doubts must have been creeping in about how long the gravy train would be in motion. A particularly notable example was for a conference they held in Las Vegas. I mean, really? A conference in Las Vegas?! It was a thing of legend within the office, most of the managers had gone and a decent amount of everyday employees too. No expense was spared. This gives you a little indication of the sheer arrogance and attitude towards image that this company had in its prime.
But now the vultures were circling. The media had a field day and, in light of the ominous stories that had been run in previous weeks, felt vindicated and a little smug. The Sun had been running a particularly high profile campaign branding the firm “Shames Direct” and printing many case studies featuring ‘victims’ of the system who had won their claims but not won any money.
Let’s rewind to clarify what the nature of the disease within the midst of the Claims Direct model was. I actually wrote a paper on this exact issue as part of my MBA (it scored me an A grade for my Operations Management module as it happens). The rot had been caused by a backlash from the insurance industry which had taken a few years to form itself into a united and coherent group against the likes of the ‘ambulance chasing’ PI firms. Claims Direct was simply the biggest, most long standing and well known target and so became the natural focus of their ire.
Basically, Claims Direct forced their clients to take out an insurance premium to cover them in case their claim was unsuccessful (hence the ‘no win no fee’ tagline). The cost of this premium was around the £1,250 mark. The average demographic for people trying to make a claim meant that paying out for an insurance premium up front was beyond them, therefore the cost of this premium was covered by a loan that was built into the claim and if the case was successful it would be covered by the settlement. This model relied on Claims Direct only taking on cases it was certain would win.
The problem was that often a case took 2-3 years to settle and for that entire time the loan for the insurance premium would be accruing interest. By the time settlement came there was often £2,500-3k owing on the loan which would be deducted from any amount due to the client. With many cases being for minor whiplash injuries it was not unusual for settlement to barely cover the amount owing and in some cases the claimant would actually end up in debt with no settlement to show. These were the cases that The Sun sensationalised and which shone a very bright light on to the practices of the company and which, in turn, fed the negative publicity machine.
The insurance industry ended up in a test case against Claims Direct, stating that the cost of the insurance premium should not be recoverable in a personal injury claim. After an elongated battle which went right up to the High Court, the final decision was that only half of the cost of the premium (and none of the interest for any associated loan) was recoverable. This amount was capped at £613.50.
So, Claims Direct was vilified in the press, detested by our clients and staffed by 25 remaining people who now had the task of running the remaining claims in the system (around 100k) to conclusion. It was this volume of claims which explains the 3 years it took to wind the company down.
Deloitte’s main problem was how to keep the remaining staff engaged when they were being yelled at quite continuously by pissed off clients who, now the cat was out of the bag about the receivership, felt validated in aiming their anger at anyone associated with the company. On top of this, the news that we would all, at some point, be losing our jobs was a tad unsettling (though less so for me who had been on a short term contract to begin with).
In hindsight, I understand why some of the utterly crazy behaviour that ensued happened – it was a coping mechanism for the situation we were in. As the original group of remaining staff dwindled down to 12 of us, the office stopped resembling a place of work with professional values and started resembling a dysfunctional family trying to simply co-exist without imploding.
Of the final 12, only 3 of us were female. The dynamic in the remaining group since the day the original axe fell had been predominantly male (around 8/20 females), but for the final few years, as a much smaller team, the imbalance was far more noticeable and at times problematic.
I distinctly remember falling out big style with one of the guys (who incidentally became a very good friend) due to being hit in the head by a football while I was on the phone with a client. Playing sport in the office was entirely normal and in no way discouraged by our (wonderful) Deloitte rep on his weekly visits. Unfortunately, kicking a football round – not just passing but HOOFING the ball violently against walls and people – made for a bit of a toxic atmosphere for those not enjoying this physical release. I can understand how funny this was for the lads at the time but it was severely frustrating for me. I had to learn to care less about the job and just think about the pay cheques.
And, talking of pay cheques, they were the main way that they kept us on board for as long as they did - quarterly bonus cheques to be exact. It literally came as a cheque separate to salary and was a great little sweetener.
The culture of the team became very laddish. This was not always a bad thing, it certainly made for a gang mentality which, when things were going well, was pretty fun. The problem was that people were not always going to co-exist convivially in this kind of environment and even though we officially had a senior manager in charge (female) and an appointed Deloitte overseer, it generally felt like a free for all.
At times, things were actually borderline crazy and many a “can you believe it?” discussion was had between us three girls, who were generally not involved in but witness to the most shocking of events. A debrief following nights out as a team was not uncommon and because Deloitte were determined to keep us as engaged as possible, the (part funded) nights out were pretty regular. On occasion I think we all wished there was some kind of HR mechanism to address matters but all we had was a contact at Deloitte offering advice by proxy and disciplinary matters were generally left for us to sort out in house.
A number of incidents require a mammoth leap of imagination to believe.
There were physical altercations between members of staff. On one memorable occasion our IT guy ran over (literally) another member of staff. The other staff member was on the bonnet of his car and for the life of me I cannot remember what they even fell out about now, but let’s just say that large quantities of alcohol were involved.
Human excrement was a feature of a number of “practical jokes” and notably somebody did actually find a specimen on their desk at one point. I am not even joking.
Early in the receivership, there was a very large pile of files in one corner of the office space. By fairly large I mean you could have hidden a couple of small hatchbacks in it without knowing. It was nearly to the ceiling and probably a MAJOR fire hazard. I think, from memory, these were archived paper files which needed securely disposing of because they contained personal information including addresses and medical records of clients. The pile just grew and grew over a number of weeks while we waited for secure shredding bins to arrive, and on a number of occasions various employees would run the length of the office and dive into it, causing papers to slide everywhere and the mess to increase. It was marginally amusing to watch though. For the first 5 times at least.
We watched the whole of the memorable Ashes 2005 series in the office, with a TV running all day to allow us to keep up with the action which was definitely a perk. Likewise we had the TV running when the 7/7 bombings happened, which was far more upsetting and weird.
It was not uncommon for pub lunches to drag on into the afternoon and one of our team used to regularly sleep, in his chair, at his desk, during his lunch break. I admired his ability to kick back and doze off. I also saw him startled awake on a number of occasions by his rambunctious colleagues which was often very amusing.
Office furniture started to be divided up and shared out towards the end as the Receivers had no use for such low value assets and we knew the offices would be stripped and everything thrown away after we closed the doors for the final time. It was a strange feeling of realisation as the amount of empty space in the office around us grew. This did, of course, make for easier games of cricket.’
To be continued…