The Insurance Act 2015 has failed to halt the growth in insurance disputes reaching the courts, with litigation volumes rising over the past decade, according to data from Mactavish. In the ten years since the Act came into force, insurance-related cases have increased by 180%.

Mactavish argues that the industry’s response to major events, including the Covid-19 pandemic, Russia’s invasion of Ukraine, and climate-related losses, has contributed to more claims being contested, with policyholders turning to the courts to resolve disputes. The view that insurers are treating higher value claims less favourably than those of a lower value is borne out in a series of cases that arose following Covid lockdowns and Russia’s invasion of Ukraine, it says. In both cases, claims amounting to billions of pounds were rejected by insurers only to be later approved by the courts.

Covid-related business interruption claims and Russian aviation war risk claims led to a spike in legal activity between 2022 and 2024. However, the underlying trend has remained constant with case volumes increasing throughout the 10 years leading up to the introduction of IA15 and the 10 years since the Act became law.

Bruce Hepburn, CEO of Mactavish, said: “The common denominator in too many cases is not around any of the technical aspects of the insurance claim, such as disclosure or notification, it is about cost. To put it simply, the higher the claim, the more likely it is to be challenged.

“Insurance claims end up in court for many reasons -- some legitimate, others less so. Sometimes claims genuinely require judicial intervention, however, all too often we see litigation being used as a point of leverage -- a negotiating tool used to drive down the value of a settlement -- rather than a legitimate means of resolving cases.”

The Insurance Act 2015 aimed to address imbalances in the claims process, including the use of technicalities to decline claims. While the report notes improvements in disclosure during underwriting, it concludes the legislation has fallen short in speeding up claims and improving contract clarity.

The report findings are based on the Mactavish Claims Litigation Index, which tracks insurance litigation in the High Court of England and Wales using recorded legal filings.

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