The Financial Services Authority (FSA) has updated its website with guidelines on third party capture, whereby injured accident victims are contacted by the insurers of the driver who was at fault in a road traffic accident or sometimes an employer if an employee was injured at work. It is not illegal for insurers to do this, however, accident victims must remember the insurers are not working for them.
The FSA’s guidelines are summarised below:-
• Injured accident victims do not have to accept any services or compensation offer;
• Injured accident victims do not need to make an instant decision;
• Accident victims should consider undergoing a medical examination to reveal the full extent of their injuries;
• Most offers of compensation will be offered on a full and final settlement basis, which means you cannot ask for more compensation if your injuries are more serious than they seemed at first;
• If the insurer refers an accident victim to a solicitor, they may be paid for the referral. Accident victims can see a solicitor of their own choice instead;
• Accident victims may get their compensation quicker by settling directly with the insurer however the level of compensation may be lower than compensation negotiated by a solicitor;
• Accident victims have the right to seek independent legal advice.
• Injured accident victims do not need to make an instant decision;
• Accident victims should consider undergoing a medical examination to reveal the full extent of their injuries;
• Most offers of compensation will be offered on a full and final settlement basis, which means you cannot ask for more compensation if your injuries are more serious than they seemed at first;
• If the insurer refers an accident victim to a solicitor, they may be paid for the referral. Accident victims can see a solicitor of their own choice instead;
• Accident victims may get their compensation quicker by settling directly with the insurer however the level of compensation may be lower than compensation negotiated by a solicitor;
• Accident victims have the right to seek independent legal advice.
These guidelines were updated after a review into third party capture by the FSA. Third party capture is mainly used in road traffic accidents but can be used in employer liability cases. The key findings of the review were:-
• Concerns were raised that accident victims may not receive fair and reasonable treatment and compensation;
• Third party capture is, as all insurance claims, regulated by the Financial Services and Markets Act 2000 so an insurer’s conduct must comply with the FSA’s Principles for Businesses;
• Third party capture only related to a small proportion of claims;
• Most insurers had processes to safeguard vulnerable accident victims such as children or accident victims with complex injuries;
• The data was inconclusive as to whether accident victims would have won higher compensation if they had legal representation;
• Standards of record keeping varied.
• Third party capture is, as all insurance claims, regulated by the Financial Services and Markets Act 2000 so an insurer’s conduct must comply with the FSA’s Principles for Businesses;
• Third party capture only related to a small proportion of claims;
• Most insurers had processes to safeguard vulnerable accident victims such as children or accident victims with complex injuries;
• The data was inconclusive as to whether accident victims would have won higher compensation if they had legal representation;
• Standards of record keeping varied.
The FSA concluded that third party capture does not necessarily cause detriment but there is a risk accident victims may settle without considering all their options. Insurers should still make fair and adequate offers of compensation and accident victims should be fully informed of their rights, including the right to independent legal advice. The Association of British Insurers (ABI) is planning to publish a code of practice for insurers dealing with third party claims in early 2010.
Lawson-West would strongly recommend accident victims to seek independent legal advice as soon as possible to avoid the risk of being under-compensated. If you have been injured in an accident that was not your fault, please contact Vickki Ridgway on 0116 212 1000 now or complete one of the on-line forms.
