Beware of Early Offers of Settlement from Insurance Companies

N.B. – Our clients’ confidentiality is of cardinal importance to us. This article has been drafted so as to preserve our client’s anonymity and has been expressly approved by her prior to its publication arising out of her desire to warn others of the unfairness she witnessed in the claims process.

A case that I concluded on behalf of a client recently brought into sharp focus, yet again, the extremely devious nature of offers of early settlement made by insurance companies.

My client was badly injured in a two-car collision in which she was completely faultless. After she had gotten over the initial shock of this very traumatic episode and was on her way to recovery she instructed me to pursue a claim for compensation in respect of the significant personal injuries * which she had suffered.

After carrying out all necessary investigations and compiling the appropriate medical evidence, we submitted an application for assessment to the Personal Injuries Assessment Board (PIAB, generally known as the Injuries Board) on her behalf.

Devious Low Early Offer

At this stage, I was approached by a claims handler acting for the other driver’s insurance company who offered to settle my client’s claim for a sum of €11,500. I immediately advised my client that this offer was way too low in my view and thankfully she wasn’t duped by the insurance company’s ostensible efforts to ‘sort this whole thing out as quickly as possible with the minimum of fuss so that everyone can just get back to getting on with their lives’ (which is the type of language claims handlers typically use when dealing directly with injury victims). She rejected the offer and instructed me to proceed with her Injuries Board application.

Injuries Board Assessment

Fast forward eleven months and, hey presto, the Injuries Board issued an assessment in favour of my client, valuing her general damages for pain and suffering at €25,000, and allowing her all of her vouched medical and other expenses on top of this figure.

Did the insurance company reject the Injuries Board’s assessment on the basis that it was far too high based on their own valuation of the claim? Not on your Nelly! They paid out the full amount assessed by the PIAB without so much as a peep of protest out of them.

Sadly, as any solicitor specialising in personal injuries * will tell you, and as an independent report commissioned by the Central Bank in 2010 has proven, this was not an isolated incident, with insurance companies routinely and systematically making unacceptably low offers of settlement to unwitting claimants early on in the claims process.

Unrepresented Claimants Get Duped

Many of those injured parties who decide to go the Injuries Board process alone without legal representation (as both the Injuries Board and the insurance lobby actively encourage them to do) will quite understandably take insurance companies at their word and will assume that offers are being made in good faith and that they represent the true value of the claim. Had my client been one of those unwitting individuals she would have accepted a sum equal to 46% of what the Injuries Board ultimately assessed in her favour.

This is just one more gleaming example of the extreme inequality of arms and inherent unfairness which the Injuries Board process represents for ordinary individuals who have suffered injuries through no fault of their own. Anyone who is presently pursuing a claim for compensation should heed it carefully.

In contentious business, a legal practitioner shall not charge any amount in respect of legal costs expressed as a percentage or proportion of any damages (or other moneys) that may become payable to his or her client or purport to set out the legal costs to be charged to a junior counsel as a specified percentage or proportion of the legal costs paid to a senior counsel. A legal practitioner shall not without the prior written agreement of his or her client deduct or appropriate any amount in respect of legal costs from the amount of any damages or moneys that become payable to the client in respect of legal services that the legal practitioner provided to the client.

John McCarthy specialises in personal injury and medical negligence claims. His practice focuses on high-value compensation cases. John qualified as a solicitor in 2003 and holds a diploma in civil litigation. This specialist qualification in the area of personal injury and medical negligence litigation, is awarded by the Law Society of Ireland.