Accepting compensation direct from an insurer.

Stories of insurers approaching clients directly and bypassing personal injury solicitors have appeared in the news recently. The practice is often called ‘third-party capture’, and can be damaging for clients who are unaware of its risks.

Injured people may accept offers of compensation from insurance companies before seeking the advice of a solicitor or another suitably qualified professional. It is essential however, to use a solicitor or a legal executive when submitting a personal injury claim to ensure that you receive full compensation for injuries and losses.

The settlements in third party capture claims are typically lower than that which a lawyer would reach, often significantly so. A case in 2008 for example, was reported of an injured person who was offered a full and final settlement of £4,000 by insurers Zurich. They instead hired legal advice and the claim settled for £35,000.

There is a clear conflict of interests between the claimant and the insurer; it is in the insurers’ interest to give the claimant a low settlement.

An insurer may give a ‘pre-medical’ offer for example, before the claimant has received medical advice, particularly when it is a claim where the injuries appear minor. The settlement could be offered in the early stages of the claimant’s recovery, when the full extent or impact of the injuries is not yet known. This would also not allow time to consider future losses such as care and loss of earnings.

The speedy nature of the settlements may appeal to an injured person, especially if they are earning a low wage or if they are unable to work for a period due to their injury, but claimants may be rushed into accepting a settlement.  There is a time limit of three years to issue a personal injury claim, so it is important not to be pressured into accepting a low settlement within a few days. Additionally, the injured person’s legal right to compensation is waivered if they accept a settlement.

In some situations, claimants may be told that they don’t have a strong case, where a solicitor would advise them that they do. The injured person may be unaware of the full value of their claim without a solicitor’s advice, particularly if they are contacted within a few days of the injury and they are still in shock after an accident.

Crucially, lawyers have a regulatory duty to act in the best interests of their clients, but insurers do not have the same duty towards those that have been injured.

Anthony McCarthy, Director Solicitor at Macks, says “Third party capture is wrong and is denying too many injured people proper legal advice and appropriate compensation. It should be outlawed.”

Source: The Guardian

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