Cheaper personal injury claims?

Recent articles in the Law Gazette have expressed concern about the practice of “third-party capture” where insurers approach accident victims directly in an attempt to agree damages without the involvement of claimant solicitors. Claimant lawyers argue that insurers try to settle these claims below their true value and that without their involvement justice will not be done.

On a related issue, I recently came across an article by David Marshall that produced a number of statistics in support of the view that an increase in the small claims track limit would be a bad thing as less people would be willing to bring claims without legal assistance. One of those statistics was from a MORI poll that produced the finding that “73% of respondents said that they would be unlikely to be able to value a personal injury claim without a solicitor”. What jumped out at me from that poll was not the fact that 73% of the public thought they would not be able to value an injury but that presumably 27% of the public thought they would. One in four members of the public think they are a walking Kemp & Kemp! Even I would have to concede there may be a certain amount of naivety here, but I may be underestimating the intellect of the great British public.

Claimant solicitors naturally try to paint this as all an or nothing issue. Either a solicitor is involved in the claims process from start to finish, in which case the client can expect to receive proper compensation, or the poor client is left entirely to the merciless clutches of the evil insurer who will under-settle the claim.  

Third-party capture cases are, by their nature, cases where liability is not in dispute and the insurer wants to settle as cheaply as possible (at least so far as the legal costs side is concerned). Let's assume in this situation that a medical report is obtained from an independent medical expert (at the insurer's expense). The Claimant completes a standardised form containing information of any financial losses and produces evidence in support. Assuming the medical expert does not recommend further investigation, at that stage the insurer makes an offer in settlement. The Claimant then takes the evidence gathered to date to a solicitor and asks whether the offer made is reasonable. No more than a very short written advice would be needed. If an insurer has offered £2,000, a Claimant will not want to know more than whether this falls within a reasonable range of what might be allowed at court. A client will not require a detailed “legal” advice quoting numerous authorities in support. How much would this cost? £100? £150? If solicitors did not think they could provide a short advice for that price I am sure the junior Bar would.

If the advice is that the offer is too low then the Claimant can be told what an appropriate settlement range would be an go back to the insurer with a counter-offer. If agreement cannot be reached then it would be reasonable at that stage for solicitors to become fully involved. Obviously, serious injuries would have to be dealt with in a different way, but the idea that the current system is the only way that claimants can recover an appropriate level of damages in low-value claims, where there is no dispute as to liability, is simply untrue.  (Even under the new claims process for low-value RTAs, solicitors will still recover costs of £1,200 for cases where there is no liability dispute and quantum is agreed without a hearing.) 

You're unlikely to hear APIL making similar proposals for reducing legal costs.