The Association of Personal Injury Lawyers (APIL) is warning consumers about what has become known as ‘third party capture’, a practice which involves an insurance company settling a claim directly with a personal injury victim of a policyholder, without the victim receiving independent legal advice.
The war of words from the APIL comes in reaction to what it sees as the latest attempt by the insurance industry to encourage the practice, the Association of British Insurers (ABI) having just launched a voluntary code of practice for insurers which it describes as ‘third-party assistance’.
The new Third Party Assistant Claimant Guide from the Association of British Insurers (ABI) describes how an offer of compensation can be made for personal injury and may include compensation for other losses associated with the injury.
While the insurer is advised to also remind you of your right to seek independent legal advice the amount of compensation is assessed according to the information you have given the insurer together with any details provided by a medical professional. The insurer is then advised to provide details of the offer of compensation in writing.
The ABI code states that claimants should be informed of their right to seek independent legal advice and initial contact with victims should be by telephone, text message, email or letter and should not involve unsolicited visits to claimant homes or hospital beds.
All compensation offers should be fair and reasonable, the guide states. The code also says that insurers should strongly recommend that a claimant seek independent legal advice when dealing with minors; where there are issues over fault; where the claimant has a limited understanding of English; where the injury requires more than one medical report or is complex; where there are possible fraud issues; and where there are causation issues.
However, the Association of Personal Injury Lawyers (APIL) is condemning the practice saying the detailed ABI guide for claimants fails to point out that the victim incurs no costs if they instruct an independent solicitor. The APIL feels the advice guide is not in the interest of the injured and is no substitute for independent legal advice.
The APIL has long been concerned about a growing trend for the insurer of the person who caused the injury to make direct contact with the victim, offering to settle the compensation claim direct. The process it describes as third party capture is described in the new ABI guide as third party assistance.
The APIL has sent evidence to the Financial Services Authority to illustrate occasions which it believes shows insurers have attempted to under-settle claims in such circumstances.
“The insurance industry is now euphemistically calling this third party assistance, says Muiris Lyons, president of the APIL.
“But what many people won’t realise or remember, often because they are shocked and vulnerable at the time, is that insurers’ primary duty is to their shareholders, not the injured person. This obviously puts them in direct conflict with the victim.
“What the document fails to point out, is that no costs are incurred by the claimant if he is represented by an independent solicitor, that the interest to the insurer in dealing with people in this way is very clear, and that the valuation of an injury claim can, and often is, subject to proper, informed, scrutiny when a claimant is independently represented.”
One of the APIL’s key concerns is that most people know nothing about the compensation system which makes it difficult for them to judge whether or not the compensation they are being offered is fair or correct.
“An injured person needs access to independent advice about such key aspects of the case as medical reports, rehabilitation, and the level of compensation to be expected….injured people deserve proper, independent support,” says Lyons.
More details about the APIL’s position on insurers’ third party assistance – or capture – depending on your point of view, can be found at the association’s website: www.apil.org.uk. The ABI compensation guide can be downloaded at its website: www.abi.org.uk
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