Road Traffic Accidents Beware of the capture net
Third party capture schemes are still a hot topic which is leading to discordance between Claimant and Defendant companies in the Personal Injury industry.
Typically, these schemes are put in place by insurers in relation to road traffic accident cases and the aim is to directly contact the potential claimant with a view to minimising the duration of the usual claim process.
Third party insurers will argue that it is beneficial to the claimant to expedite their claim and as an additional advantage they are able to avoid unnecessary costs incurred in dealing with a claim via a third party solicitor.
Concerns have been raised that this type of scheme deprives the claimant of the opportunity to obtain independent legal advice and therefore leaves them at risk to under-settling their claim.
APIL (Association of Personal Injury Lawyers) and MASS (Motor Accident Solicitors’ Society) together with the trade union Unite have been involved in a recent bid to the FSA (Financial Services Authority) to take action in respect of what is a perceived “loophole” in the Compensation Act which allows insurers to approach potential claimants without accountability.
A significant risk that this approach poses to potential claimants is that, as the insurance company approaching them is not their own insurance company, no duty of care is in place. As an unfortunate consequence, no recourse to the Financial Ombudsman is relevant and essentially the claimant has no one to complain to if anything should go wrong.
The FSA responded by requesting evidence that claimants are at risk and this has been established by six recent cases forwarded by APIL, in addition to seven cases raised by Unite.
Some of the cases reviewed involved non-English speaking claimants which inevitably put them at a disadvantage as no advice was provided to them in their native tongue.
Tactics used by third party capture teams involved persuasion towards under-settlement of claims and in some cases legal advice that was inaccurate. They argue that the intervention of a legal representative is overvalued and costly and has resulted in a lack of faith from both insurers and claimants. They point out that potential claimants are quick to embrace their proactive approach – what they do not always recognise is the need for explanation and advice of complex legal issues.
The FSA have recently confirmed that they are “…continuing to investigate the extent of the alleged customer detriment” and that they intend to research how third party insurers treat claims and are considering how best to go about this.
In the meantime, it is felt by many in the claimant industry that potential claimants remain at risk.
To protect yourself against any such risk, ensure that you obtain independent legal advice and where necessary have a third party representing your interests.