Procurement of Law Firms for a Legal Panel

icare Insurance for NSW (icare)
Refresh of Legal Panels

icare Insurance for NSW (icare) is a Public Financial Corporation governed by an independent Board of Directors that delivers insurance and care services to the people of NSW. icare is one of the largest insurers in Australia and insures over 310,000 NSW businesses and 193 Government Agencies. icare protects around 90% of public and private sector workers in NSW, which is approximately 4 million people. icare is a trusted risk advisor to the NSW Government, protecting over $193 billion of the state’s most iconic assets, including the Sydney Opera House and the Sydney Harbour Bridge as well as critical government infrastructure like schools and hospitals.

icare was established by the State Insurance and Care Governance Act 2015 in September 2015 as part of the 2015 Insurance and Regulation Reform Package consolidating the NSW insurance and care schemes. It is a dedicated insurance ecosystem supporting government entities, employers and individuals through a multitude of compensation schemes.

The context

As part of its services, icare manages the Treasury Managed Fund (TMF) on behalf of NSW Treasury. The TMF is a self-insurance scheme created by the NSW government to cover the State’s agencies risk by providing comprehensive protection. It delivers on the NSW Government’s responsibility to keep the people and property of the state safe, while providing a level of cover that is not available in the commercial market at an affordable cost. The Government can cover against any liability, injury, loss or damage that may be suffered by individuals who work for, and assets owned and run by its agencies. This provides the Government with confidence that these losses can be managed with controlled impact to the state budget.

The TMF provides cover for the 193 NSW agencies who are part of the scheme, who benefit from low contribution rates towards the cost of the TMF scheme that do not support a profit motive or capital requirements. icare operates a hybrid model of claims management, with the majority of claims services delivered by an outsourced partner, with the more significant, complex and sensitive claims overseen by a dedicated team within icare.

Law firms may be engaged to advise icare and the 193 agencies on the best strategy for resolving a claim. To ensure the procurement process for a Law Firm was effective and efficient, icare established separate panels of Law Firms, called Legal Panels.

The Workers Compensation Nominal Insurer Panel, TMF Workers Compensation Panel and the TMF General Insurance Panel (GI) were established in 2013 agreements and the contracts for each Law Firm under these panels lapsed as of January 1, 2021. As such, icare engaged Grosvenor Procurement Advisory (Grosvenor) to refresh these panels. The refresh of these panels included merging the two Workers Compensation panels into one.

The project

icare engaged Grosvenor to help procure the Law Firms under the following Legal Panels:

• Personal Injury (PI) Legal Services for workers compensation cases to cover the Workers Compensation Insurance Fund and the workers compensation portion of the TMF the Bush Fire Fighters and Emergency Rescue Workers Fund, and smaller closed portfolios.
• General Insurance (GI) Legal Services for other cases under the Treasury Managed Fund, Generators Fund, Construction Risk and Insurance Fund and the Pre-Managed Fund.

Grosvenor worked with icare over 18 months to support the end-to-end procurement process of these Legal Panels, which included the development of the Response for Proposal (RFP) documents management of the evaluation process, negotiation and execution of the contracts and debriefs to unsuccessful tenderers. Throughout the process, Grosvenor undertook:

• identification of panel requirements, including assessment of current demand and forecast of future demand and supply requirements
• assessment of current service delivery model and development new model
• commercial model development, including the financial models to obtain value for money
• development of performance management mechanisms, governance frameworks and panel management.

Extensive consultation was required throughout the whole process with NSW Government Agencies, claims managers and icare stakeholders. Both panels gained media attention, and therefore required a sensitive approach to management and delivery.

The outcome

Large scale consultation process with end users ensured that the services available under the panel were designed with the end user in mind

Consolidating the number of panellists simplified the panel management effort required and allowed larger volume discounts

The robust process undertaken ensured that decisions were defensible to the many incumbent legal services providers who were not appointed to the new panel. This was especially important given the recent media coverage of decisions taken at the agency, including decisions relating to the procurement of services.

Streamlined processes in how scheme agents and icare interact with law firms will ensure standardised engagements that lead to earliest resolution of claims. This objective went far beyond the typical scope of a sourcing process and embedded lasting improvements in all organisations involved.

 

At Grosvenor, we pride ourselves on offering clients tailored services to address your specific requirements, rather than taking a ‘one size fits all’ or a generic, ‘cookie cutter’ approach to our work.

This means that you, our clients, can expect us to:

• Continually refine objectives
• Seek clarity and consensus
• Avoid shortcuts and templates
• Adapt, be responsive and flexible
• Apply intellectual rigour at all levels
• Devise effective, practical and practicable measures to achieve outcomes.

Contact us for a free discussion.