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Recent reports suggest that in cases involving road or workplace accidents, it is becoming increasingly common for insurance companies to make direct contact with the victim by telephone, email or text message, sometimes within hours of the accident, in order to quickly secure a deal to settle the case.
Campaign groups are now voicing serious concerns that insurance companies are pressuring injured people to settle their claims before good independent advice has been taken.
This practice is often referred to as "third party capture" and it has been condemned by both the Association of Personal Injury Lawyers (APIL) and the road safety charity, BRAKE, who point out that an insurance company is predominantly answerable to its profit-seeking shareholders and not to the injured victim who requires compensation.
A recent independent study by the Financial Services Authority (FSA) has also examined the practice and found that "...there is a risk in some cases that third parties may settle directly with an insurer without considering all of their options". The FSA report goes on to recommend that an injured party should always be allowed access to independent legal advice.
Canter Levin & Berg Partner and Law Options' head of Personal Injury, Claire Jansz, shares these concerns. She says:
"This is a worrying trend. Insurance companies will argue that they are simply trying to settle the case quickly but, in my experience, the injured person is often unprepared and ill-equipped to properly consider a settlement offer. The risk is that, without proper guidance, they may end up selling themselves short. We see this happen time and time again.
"For instance, a long-standing client recently mentioned in passing that she had been offered £1000 by an insurance company in settlement of an injury claim. She had not previously taken any legal advice and felt that she was being bullied to accept the offer. We saw that the claim had been significantly undervalued and so we took the case on. Within a few weeks the insurance company had agreed to settle for £1600. This was all achieved without any cost to the client."
Campaigners will continue to lobby for better regulation of insurance companies but, for the injured claimant, the message is clear: Be aware of your right to seek free independent legal advice.
If you think you may have a claim, please do not hesitate to contact us on 0844 875 62 00. Alternatively, complete our online enquiry form.