Third-party capture

Third-party capture involves insurers contacting the victims of accidents direct and settling claims before the potential claimants have received independent legal advice. As always, there are two schools of thought. Insurers point to what they regard as the increasingly disproportionate amount of legal costs to the amount of compensation recovered (‘40p in legal fees for every £1 paid in compensation’) and the commercial necessity to avoid these where possible by dealing with claimants direct; claimant lawyers object to what they describe as a cynical practice which deprives victims of independent legal advice resulting in them settling claims for substantially less than the amount to which they are entitled. The Association of Personal Injury Lawyers (APIL) has sent to the Financial Services Authority (FSA) details of six cases which they say demonstrate their concerns, and Unite has sent details of a further seven such cases. An example is an employee who was originally offered £25,000 in full and final settlement who, on subsequently consulting solicitors, was advised that his claim could be worth up to 10 times that amount. Insurers owe no duty to victims and both APIL and the Motor Accident Solicitors Society (MASS) are campaigning for third-party capture to be brought within the reach of the Compensation Act. They argue that the FSA regulations are geared to the way insurance companies act in relation to their clients and not to third parties. Insurers say that they seek to identify those claims which they believe to be straightforward where liability may not be in dispute and the injuries are relatively minor. In those cases victims receive payment quickly without the delay of instructing a solicitor.