Solicitor’s fees and fraudulent claims have long been the subject of scrutiny by the government in relation to its campaigns to reduce motor insurance premiums. As we wait for more news about the government’s proposed personal injury reforms, I wanted to shine a light on one of the real reasons, in my opinion, that motor insurance premiums are so high.
In a recent case involving a road traffic accident, the actions of the insurance company and its legal department resulted in a much higher compensation payment than was necessary, or was originally sought. The defendant collided with our client’s car at speed and the insurers rightly admitted liability at an early stage. Our client suffered significant injuries and was unable to work for around 12 months. After that period, we submitted a settlement proposal to the insurers with two medical reports and details of the client’s losses, including lost earnings. The client wanted a quick end to the matter and made a modest settlement offer of less than the full value of the claim.
The insurers’ response was to reject this and rely on their own offer which was 20% of the client’s offer, leaving her with no choice but to issue court proceedings to obtain the full value of her claim.
Nearly 18 months later, the insurers have now settled the claim, less than a week before it was due to be heard by a County Court Judge.
The insurer has settled for nearly £40,000 more than the client was prepared to accept over 14 months previously. Together with the legal fees, this insurance company will be paying more than £50,000 more than it needed to in settlement.
This isn’t the first time I have witnessed the actions of insurance companies and their solicitors drastically increasing the amount they have had to pay out. But who loses out? I would suggest it is the policyholders who have these unnecessary costs, as incurred by their insurers, passed down to them.
Taking examples like the above into account and the statistics surrounding fraudulent claims (research apparently shows that only around 0.25% of whiplash claims [1 in 400] have been shown to have some element of dishonesty) I would urge the government to reconsider their proposed reforms. Those that will suffer are the millions of people involved in accidents that will not be able to claim the compensation they deserve.
We are proud to support the Access to Justice Campaign which is fighting against the proposed PI reforms. To find out more about this, visit: www.accesstojusticeactiongroup.co.uk.
0 Comments