Article by Warren Mallard

Weathering the Storm

We always appreciate articles sent to us by Warren Mallard of Lyonswood Investigations & Forensic Group because he is one man who consistently stands up for the cause of professional private investigators. And because he's not afraid of stating his views, a quality that is not so common amongst private investigators. Thank you Warren for your contribution.

At the risk of sounding like a prophet of doom, I fear that in these times of recession and unemployment and the reliance by the majority of the investigation industry upon insurance work that many will fall by the wayside. I recall only too well when the NSW Premier the Honourable Robert Carr took a parting swipe at the legal profession that he openly despised and brought about changes to the Common Law barriers related to Workers' Compensation claims. These changes made it all but impossible for injured parties to jump over the minimum whole of body prerequisite to lodging a common law claims by lifting that hurdle to 15%. The effects these changes had upon those engaged in the personal injury investigation and legal professions was gigantic.

To some extent the market place levelled out and those who were prepared to tow the insurance company line and comply with their stringent and unreasonable changes to charge out points, kilometres etc have survived simply because the number of competitors in the investigation industry was greatly reduced which allowed the insurers to divide and conquer and because many investigation companies had no idea how to diversify within their own industry and had become totally reliant upon insurers. Such reliance is fatal particularly when times get tough. Its called 'Eggs In One Basket'.

The insurers did exactly the same to the panel beating industry however the difference between that industry and our industry is that the panel beating industry were larger in numbers , united and managed to defeat the insurers to a large extent. This battle between the insurers and panel beaters still rages as I type. Although the panel beaters won an increase in hourly rates, some insurers reassessed the times it takes for the provision of each process and like the lord who giveth, they also tooketh away.

The most dangerous aspect I see with only working for insurers (apart from eggs in one basket) is the way in which insurers make money. There are two main income earners for insurers, premium and investments. I need not explain what has happened to their investment portfolios. Just look at their own share prices. On the aspect of premium, when a recession hits, many of those hit by it just don't insure or take risks that reduce their premium. It's a bitter pill for insurers to swallow to make cost cuts internally and thus they bring out the razors and slash their outsourcing. Its early days and the full effects of this recession and the imminent cost cutting by insurers have not yet hit.

Our already greatly decimated numbers brought on in NSW by a series of events not the least of which is the current economic climate and legislative changes, will be even further depleted down the track when premium and disaster losses are eventually assessed.

Sadly, although the work in this state has declined across the board, I am still approached every day by at least two people who have recently completed Cert 111 under the CAPI Act. I know that those offering this training service also have to eat, but the feed- back I am receiving from the course attendees is that they are being told by the people who own and teach the courses that there is plenty of work in the industry and this is plainly not the case when the number of investigators in this state has declined from around 5000 to just over 1000.

So, we have a declining number in practicing investigators in this state because of the decline in the work and an increasing number of investigation- course wanabees and are at the same time faced with an economic disaster. It's an ugly mix and one that does not sit well with me, particularly the giving of false hope to those who have shown commitment in spending their hard earned cash to enter this industry at such a difficult time. I have listened to many case histories lately where those who were in the industry and making a reasonable living are now doing other things.

The investigation industry will survive but only if its reliance upon the one type of work (insurance related investigation) is expanded to areas that are now becoming more and more evident that with the demise of the NSW Police and the lack of law enforcement resources, have revealed a whole new raft of potential niches into which the energetic and flexible investigator can build a new and vibrant investigation industry that the public will in time gain confidence and trust in and accept as a real and competent force of men and women who can bring about for them resolution to their disputes and problems. It's far more interesting work and broadens the skills of investigators and makes them better more rounded investigators who are across a range of skill sets. Insurers will also benefit as these investigators will in time become better at what they do and more aware of the different forms that fraud can take. This broader skill base will not come about unless the investigation course components are broadened and general literacy tests are a pre requisite to course entrance.

I wish all in the investigation industry well and sincerely hope that the loss of skilled investigators is minimised so that the breeding stock is not lost to the drought.