Insurers Must Stop Trying to Settle Claims With Unfair "low-ball" Offers

LONDON, August 30, 2012 /PRNewswire/ --

A leading personal injury lawyer has blasted the insurance industry for regularly trying to settle claims directly with injured victims for inappropriately low and unfair amounts.

Karl Tonks, an equity partner with Fentons Solicitors LLP, said the practice of defendants and insurers contacting victims and trying to settle claims early for significantly less than their true worth - in many cases before they have even sought legal or medical advice - should be a cause for great concern.

"As a national personal injury firm we handle thousands of claims for people across the country every year," said. "We have noticed a worrying increase in the number of clients who tell us they have been approached by the defendants with what appears to be a very low offer within a few days of their injury. In many of these cases the defendant has subsequently sought specialist legal advice and gone on to receive several times the amount of compensation they were first offered. But it begs the worrying question as to how many other victims are accepting these 'low-ball' offers and being massively under-compensated for their injuries?"

Karl, who is also president of the not-for-profit group APIL (Association of Personal Injury Lawyers), said that at a time when accident victims and their solicitors were consistently being blamed by insurers over the spiralling cost of premiums, insurers need to look closely at their own actions. "It seems massively hypocritical to be constantly pointing the finger at claimants and their lawyers, when they are simultaneously trying to deny those same policyholders the right to a fair level of compensation when an injured person makes an honest, justifiable claim," he said. "People who take out an insurance policy should be able to have faith that when they are unfortunate enough to need to make a claim, the level of compensation will be calculated with their best interests in mind, and not simply the lowest amount that their insurer can get away with."

Following the reforms made to the way personal injury claims will be handled under the controversial Legal Aid, Sentencing and Punishment of Offenders (LASPO) Bill - which will come into force next year - Karl said he expects more and more cases to be settled earlier.

"The purpose of the reforms was supposedly to speed up the process of making a legal claim whilst reducing the amount it costs to do so," he said. "The reason for the need to do this was laid squarely at the door of accident victims and personal injury lawyers, with allegations of spurious claims and massive success fees making headlines.

"But I would ask the same insurance industry luminaries that are quick to censure lawyers to examine their own practices," he said. "Perhaps they should ask just how many claims they are settling before a victim has discussed their injury with a lawyer and been referred to a medical expert to assess their immediate and, crucially, their future needs."

He said that Fentons Solicitors was seeing a growing number of clients who might have settled their case earlier, but thankfully sought legal advice after they were offered what seemed like suspiciously low amounts of damages.

"In one recent case, a client was contacted by the defendant's insurer and was offered £500 to settle her claim in full," he said. "After engaging the services of a specialist lawyer, she settled her case for more than £37,000.

"The woman, who was in her 40s, was seriously injured in a car accident," Karl said. "She had to undergo surgery on her injured knee and still suffers pain in the joint, but the defendant's insurer tried to settle her claim early, offering her just £500 in a full and final settlement. This was risible given the circumstances and the effect the injuries had on the client, significantly her ability to work.

"The other motorist avoided criminal charges by agreeing to undergo a driver training course, and he and his insurers forced us as her solicitors to waste valuable time and resources preparing for a full trial on liability - only to then admit liability once we were at the Court," he said. "The claim finally settled for £37,500."

"Whilst we understand the desire to expedite the personal injury claims process, it absolutely must not be at the expense of the injured party," said Karl. "All too often the victim is being bombarded with these low-ball offers in an attempt to dispose of their case quickly and cheaply, without giving the proper consideration to the impact of their injury.

"The insurance industry is quoted as saying that the system for personal injury claims is dysfunctional, and it is right. Not only does the system allow insurers to contest claims until the eve of an expensive trial, causing significant costs to be incurred unnecessarily and making an innocently injured person wait unreasonably long for the compensation they may desperately need, but it evidently also allows insurers to attempt to settle claims for low amounts before victims have even been examined by doctors.

"For those same insurers to have the audacity to say that the process is too expensive and takes too long, whilst simultaneously trying to circumvent the process by low-balling genuine injured victims, is not just dysfunctional, it's also disingenuous."

Karl said that the examples he cites are just the latest cases at his own firm where insurance companies have made every effort to avoid paying appropriate compensation to those who are genuinely injured.

"Whilst insurers continue to blame compensation claims for driving up premiums every year, they make derisory offers to genuine victims like these clients," he said. "They are quick to suggest that lawyers are the underlying problem, but it would appear that victims of injury who choose not to seek proper legal advice actually run a significant risk of being ripped off."

Karl Tonks is an equity partner with Fentons Solicitors LLP, one of the UK's leading personal injury firms. He is also president of APIL (Association of Personal Injury Lawyers).

SOURCE Fentons Solicitors LLP