Road traffic accident claims – don't miss out on legal expenses benefits


Recent articles in the press suggest that insurers are seeking to advertise their efforts to cut insurance premiums by claiming to eliminate the need for legal fees.

In the current climate insurers are naturally keen to retain existing customers and attract new ones but the suggestion that legal fees can be dispensed with, in the event of a claim, can be misleading.

One of the well used tactics of insurance companies for reducing costs is the third party capture scheme, which involves contacting the third party involved in the accident to try and settle their claim speedily, and usually before they have time to instruct a solicitor to act for them. A range of services may be offered such as vehicle repairs, replacement hire vehicles and most importantly, cash in settlement of any personal injury and other losses.

Whilst the premise of this scheme is to deal with claims quickly and efficiently, the approach is not protective of the innocent party and in many cases does not allow them time to obtain legal advice or assistance from which they would benefit.

In addition the third party is without recourse if a complaint should arise, because the insurance company they are approached by is not their insurer, and no contract exists between them. This constitutes a loophole which has been addressed by The Association of Personal Injury Lawyers (or APIL) in a campaign to the Financial Services Authority (FSA).

Insurers’ suggestion that legal costs are disproportionate is an urban myth. Since the 1998 Civil Procedure Rules were brought into force in conjunction with the pre-action protocols, the vast majority of road traffic accident claims are dealt with under the Predictive Costs Regime which caps legal costs to a minimum and only on occasions where claims cannot be settled out of Court are costs inflated higher than the said regime allows for.

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