Response to insurance industry road traffic accident claims proposal
Why "Cutting out the middle man" means cutting out fairness and access to Justice
Digby Brown have responded to proposals from insurer Aviva that call for a radical change to the way road traffic insurance claims are dealt with in the UK, arguing they mean insurers both operating and administrating a claims system, an unfair situation which would deny thousands of road traffic accident victims access to justice and proper compensation.
The Aviva proposals call for a change in the law to compel all road traffic accident victims to notify insurers (whose drivers are responsible for the accident and injury) first, in order to allow those insurers to deal with the claims directly, and without the involvement of “middle men”, including lawyers. The insurer claims this would save the industry money and mean lower motor insurance premiums.
Responding, Brian Castle, Digby Brown Partner, said:
“At first glance, these proposals sound attractive. After all, who doesn’t want lower car insurance premiums? It’s when we look at the detail of the proposals that the major flaw and injustice at their heart becomes obvious.
“Central to Aviva’s proposal is the assumption that you can trust an insurer to be impartial and just in ensuring fair and proper compensation is paid to injured car accident victims and their families. Well, actually you can’t. Aviva and other insurers have a fundamental conflict in seeking to maximise shareholder profits and settling liability claims at the lowest figure they can. That cannot square with properly looking after the interests of the injured party to ensure they obtain proper redress.
“At Digby Brown we have seen a long and continuing list of examples where insurers have tried to settle claims directly with injured parties and have either deliberately or negligently sought to under-settle these claims for a fraction of their proper worth. We have statistics, collated over several years and involving thousands of Scottish cases, that tell us that where we have had to litigate on behalf injured clients, we receive more than three times the average settlement figure in damages compared to the settlement offered by an insurance company prior to litigation. That reaffirms our view that insurers cannot be trusted to deal such with claims themselves.
“An award of compensation is designed to put an accident victim back into the pre-accident position and is made of up components such as repayment for loss of earnings; costs of past and continuing care, as well as an award for injury. It is important that an accident victim is properly advised by a solicitor acting in their best interest and fighting their corner. It seems the insurers want the benefit of a captive market - taking out a road traffic insurance policy is compulsory in law for all of us - without meeting the costs, from their profits, a system with proper safeguards involves.
“Where insurers are concerned about the escalating costs of claims, perhaps they would do well to engage with road traffic accident victims and their solicitors and make genuine efforts to settle cases at their proper value earlier in the process. They could also commit to avoid the increasingly prevalent industry practice of making offers to injured claimants before medical reports have been commissioned, a practice which cannot pretend to assess the proper value of a claim and which also makes it easier for fraudulent claims to proceed, something all of us wish to eradicate. They cannot, however, be permitted to operate and administer a claims system themselves without significant detriment to road traffic accident victims injured through the fault of others. “
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