Three million people are injured in accidents every year. A significant number of these accident victims are being tempted into accepting minimal offers from insurers before instructing legal representation and before the full extent of their injuries is known.
These offers can often seem like large sums of money to accident victims and the prospect of having it in their bank account sooner rather than later can be attractive, especially during difficult economic times. Also, some accident victims would prefer to accept an early offer rather than go through the actual personal injury claims process which can take a number of years. However, these offers will often not be enough to cover all of the accident victim’s future medical treatment costs, their loss of earnings and future needs. Insurers have been known to make offers before even knowing the type of injuries that have been sustained let alone the full extent of the injuries, or the ongoing difficulties that the person will continue to suffer.
In addition, numerous early offers are being made by insurers before accident victims have even had the chance to instruct a suitably qualified lawyer to provide advice on the potential value of their claim. According to the Financial Services Authority, accident victims that turn down an insurer’s initial offer and consult a lawyer receive on average two to three times more compensation. It is therefore hardly surprising that insurers try to settle claims before the victims are fully aware of the amount of compensation that they are entitled to and before legal costs start accruing.
Always instruct a lawyer
The Law Society and the Association of Personal Injury Lawyers (APIL) have campaigned extensively to try and make accident victims aware that their interests are best served by instructing a qualified professional to handle their claim.
The Association of British Insurers (ABI) has referred to the practice of insurers contacting accident victims directly as “third party claims assistance”. Far from being a way of assisting accident victims and ensuring that they get the best deal, this insurer contact is made with the sole aim of inducing the unsuspecting victim into settling their claim before instructing a lawyer. It is insurers’ aim to pay accident victims as little as possible. Therefore, it will always be wise for accident victims to seek appropriate legal advice on the appropriateness of any offers.
A recent example
Only recently, I attended the home of a young man who was involved in a very serious road traffic accident a few months ago. He told me that, shortly after the accident, he had been approached directly by the third party’s insurer. The individual had sustained multiple injuries to his legs caused by the negligent driving of the third party. The extensive injuries that the individual suffered are likely to severely restrict his ability to walk in future, and possibly for the rest of his life.
During the meeting, I was informed that representatives from the third party insurance company had attended the address of the individual just days after the accident had occurred. They managed to persuade his partner to provide them with his mobile phone number. Shortly afterwards, they contacted the individual whilst he was still in a hospital bed recovering from a major operation and whilst he was taking a significant amount of strong medication. The insurer offered him a sum, which would sound like a huge amount of money to most people, however, the figure would certainly not have covered all his future financial losses, particularly his future treatment and care costs. Fortunately, the young man rejected the offer and instead sought specialist legal advice from Bolt Burdon Kemp.
There’s no going back
In the above example, the accident victim made a wise decision. However, I am sure that there are numerous accident victims out there who have been enticed into accepting low early offers. This unfortunately means that claims are being settled in the absence of expert medical opinion and before the full extent of the injuries is known. This would be somewhat less tragic if accident victims could ask for more money at a later date, but that is not the case. Once a claim has concluded in full and final settlement, no more compensation can be sought in the future.
Fortunately, this kind of under-settlement is very unlikely to occur in cases where the accident victim is under the age of 18. This is because settlements in child claims must be approved by a judge to ensure that the settlement figure is in the child’s best interests. Adults, however, who have mental capacity to deal with their own affairs, do not have the same protection at the conclusion of their claims. So once an offer is accepted, the victim will be bound to it.
I find it deplorable that insurers engage in making insultingly low offers before accident victims have obtained legal advice, especially whilst trying to draw everyone’s attention to this so-called “compensation culture”. It appears that offers are frequently being made quicker than claims are being started.