I have a problem with trust.

A few weeks ago, a director from the Association of British Insurers (ABI) said at a conference run by the Association of Personal Injury Lawyers (APIL), the following: it is in everyone’s interests to have a low cost system.

Like most people, I really do want to believe that I am being told the truth by people who speak on behalf of powerful institutions, like insurance companies. But their words and their actions frequently conflict.

My firm was recently instructed to deal with a serious road traffic accident claim for a teenage girl. She was a passenger in a car. The driver lost control and drove into a tree. The girl suffered a fractured spine along with complicated internal injuries. The responsible insurance company is now, perhaps appropriately, in administration!

The insurance company’s rep contacted the girl’s mother by mobile telephone, met her in a local café, and sent her text messages. He made an offer to settle the girl’s claim to the mother of £8,000. He said it would be good to get it all wrapped up early. He made no mention of how he had come to this figure, or whether it might be sensible for the girl’s mother to seek some legal advice on the level of compensation that a Court would award her daughter.

Another tactic used by the insurance company’s rep was to try to induce the mother to agree settlement by saying they’d pay her expenses immediately, including her loss of earnings, if they could agree settlement of the whole claim – she’d not worked for a month (or so) because she’d had to look after her daughter.

No mention was made at any time by the insurance company’s rep that her daughter may have complications for the rest of her life, nor that Court rules state that the settlement of the claim of a person who is a minor (under 18), MUST be approved by a Judge.

The girl’s mother did not accept the offer. When we were instructed, it was clear that the girl would be entitled to damages of probably well over £100,000.

I do not suggest that all people who work in powerful institutions behave like this. This is a dramatic example of very poor behaviour. But my point remains. Would the bosses of the insurance company have complained if the claim had been settled for £8,000? Of course not! This is because there is a conflict between the interests of financial institutions and those of the private individual.

Large companies are bound to consider the benefit to their shareholders ahead of others. When they say they act in the best interests of everyone, this should be treated as nothing more than spin. The job of the spokesman is not to tell the truth, it is to sell his message.

Who knows, maybe independent lawyers have a role to represent private individuals against the misleading statements and actions of large companies and large institutions!

Article posted on Wednesday, February, 9th, 2011 at 3:28 pm

Have your say!