Being Made To Settle For Less

Accident victims are vulnerable after the event not just in the physical sense but also mentally. One of the negatives of the mental aspect is that these victims are often quietly pressurised into accepting payouts before they can obtain legal advice. This seems to be a worrying new trend and it has got the attention of the Financial Services Authority (FSA).

Indeed the FSA has just recently been given a dossier of evidence against unscrupulous insurers by Trade unions and claimant lawyers. Their concern regards the behaviour of said insurers who deal directly with accident victims and the allegations that they are putting pressure on victims to waive their right to compensation or to settle claims for a lesser amount that they actually should.

This pressure and behaviour is known in the industry as ‘third-party capture’ whereby insurers try to settle the claims of injured people before they had the chance to take independent legal advice. The trade union, Unite, included a case in the dossier where where insurance company Zurich offered £4,000 in 'full and final settlement', only for the case to be settled last November for £35,000.

Also in the dossier are findings by The Association of Personal Injury Lawyers' (Apil) and amongst their more worrying cases is one in particular- where a claim on behalf of bereaved parents who lost their three children in a road traffic accident was settled last year for £60,00 but was originally offered to be settled by Quinn Direct for £21,000.

Unite and Apil are but only two companies that have expressed concern in the dossier about insurance company representatives’ cold-calling 'third-party' victims after an accident. In some cases, the representatives go a step further and even visit an accident victim’s house in the aftermath of a car crash. Insurance companies however will rebut the allegations by claiming that their services are designed to be proactive which would mean getting in contact with potential claimants as soon as possible after an accident. Clearly however, going one step beyond and urging settlement as soon as possible without thorough legal advice is unacceptable.

In light of the dossier, the FSA will have to decide if accident victims are truly losing out and the evidence seems to suggest that they are. Unite in particular has provided cases where victims do not know the true value of the claims and that they are being told they do not have a good case when in fact they do.

The entire investigation may prove to be a vicious circle with the insurance industry raising its hands to practicing ‘third-party capture’ on a frequent basis, but only as part of a logical business model. In their defense, the pro-active response is simply a way to address escalating costs of processing claims. They are in effect bypassing the expensive intermediary-the lawyer.

Saurav is an author of several articles pertaining to No Win No Fee, Compensation Claims, Personal Injury Claims and other legal articles.