The Law Society has launched a new advertising campaign – ‘Don’t get mugged by an insurer - use a solicitor’ – to highlight that injury victims should obtain independent legal advice on the value of their claim before accepting offers made by insurers.
The practice of ‘third party capture’ has developed in recent years as insurers try to avoid incurring the legal fees of those injured by their policyholders. In a number of cases, when the insurer’s policy holder reports an accident for which they are at fault, the insurer contacts the injured third party and offers to deal with their claim directly before they instruct their own solicitors.
According to the Law Society, research obtained from the Financial Services Authority under a freedom of information challenge revealed that personal injury claimants who turned down an insurer’s initial offer, and took legal advice from a solicitor, went on to receive three times more compensation on average.
Philippa Luscombe, head of Penningtons' specialist personal injury team, said: “We have been approached by a number of individuals over the last few years who have either quickly settled a claim directly with insurers and then found that their injuries turned out to be more serious than they thought, or have been made an offer by insurers and don’t know how to assess it.
"Whilst in some cases insurers take a sensible approach, and in fact will tell the injured party to get independent advice on the offer made, others rush the injured party into a settlement, portraying it as the ‘normal’ way of doing things. In our experience of being consulted to advise on offers like this, most have been made on limited evidence; then after full investigation of the injuries and their effects, settlement has been achieved at a higher level. However, there is little that can be done to help someone who has already settled their claim. It is worrying to think how many people are unknowingly under-settling their cases through this route.”
Costs of personal injury claims are a hot topic and most agree that they need to be kept under control. “However,” says Philippa, “there is no excuse for insurers trying to cut costs in a way that is simply aimed at paying an injured party the lowest sum that they will accept, knowing that in many cases this will be an under-settlement.”
The importance of individuals getting independent specialist legal advice is the message put forward by the Law Society and it is hoped that it will result in a better understanding of this practice and the options open to injured claimants.