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The under-settlement of compensation claims.

21st May 2014

Last year saw significant changes to the way in which victims of accidents (car accidents, accidents at work etc.) who were injured, were able to access legal representation. After years of lobbying by insurance companies the government banned the payment of referral fees to “claims management” companies. These companies and even some motor insurance companies had generated huge incomes from ‘selling’ claims to the highest bidder. Whilst many law firms operating in this way provided an excellent service some had operations akin to a factory production line with profit as their main motivation.

Often such firms relied on under qualified staff with inadequate supervision who were unable or unwilling to meet clients face-to-face. There have been many examples of such staff failing to understand medical reports and not realizing how serious an injury is. This has led to claims being settled for a fraction of their true value. In one case a claim that was settled for £16,000 eventually resulted in a payout of £700,000 from a solicitor’s insurance company.

Whilst only a small minority of claims are under settled the impact on the victims of such negligence can be huge. High value claims are not considered to be a ‘lottery win’ for claimants but are intended not only to compensate for ‘pain and suffering’, but also to compensate for future loss of earnings and on-going care costs. In addition seriously injured claimants may need specially adapted accommodation (wheel chair access, wet rooms etc.) It is the solicitor’s task to ensure that a claimant is seen by appropriate medical experts and that all avenues are explored before settling the claim.

In the unlikely event that a claim is under settled all is not lost! Whereas a claim for personal injuries must be started within 3 years of the date of the accident, a claim for professional negligence can be commenced at any time within 6 years of the date of the negligence (the date of the under settlement).

If you feel you have had a person injury claim under-settled in the past 6 years it’s important to contact a local, personal injury specialist to discuss it.

George Ide
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