New code for third-party capture revealed by ABI
Industry News : 25 February 2014
A new voluntary code of conduct for members dealing with RTA victims has been revealed by The Association of British Insurers (ABI).
Last year the representative body had promised to develop a re-drawn set of principles after civil just reforms placed greater emphasis on third-party capture, where insurance companies tie claimants into settlements.
The new code, signed by leading insurance firms, promises to protect the interests of customers with a personal injury claim.
Under the code, insurers will:
• Ensure policyholders have their options made aware to them when choosing a lawyer, including any connections the insurer may have with them;
• Assert the right had by the customer in choosing their own legal representative;
• Refrain from applying, or using firms who could apply pressure on customers to claim;
• Refrain from sharing personal data with third parties if claimants have said that they would not like to pursue a claim;
• Ensure that any third parties will not increase legal costs for at-fault insurer.
Chairman of ABIs general insurance council management committee, Paul Evans, said; “Insurers campaigned over many years for much-needed reforms to the civil justice system, and remain committed to paying fair compensation to genuinely injured claimants as quickly as possible. This code - which insurers initiated and drafted - helps to ensure that both the letter and the spirit of these reforms are embedded into the insurance industry’s everyday practice.”
The decision of the government last April to cut fixed claimant costs for low-value RTA claims prompted the code due to the increased likelihood of claimants being left without legal representation. Later that year, the government shied away from raising the small claims court limit– a change which would have taken lawyers out of the low-value process altogether.
When he made that decision, justice secretary Chris Grayling also pledged to end insurers’ practice of 'making offers to settle claims without requiring medical reports’.
When talking about it’s new code, the ABI said that it should 'strike the right balance’ between customers’ legal rights and their ability to file a claim within a system that does not encourage speculative and exaggerated claims.
Vice-president of the Association of Personal Injury Lawyers, John Spencer, said the code is 'broadly welcome' in its aspiration. 'For instance, encouraging ABI members not to add unnecessary cost to the process is vital. However, it will not provide a substitute for the absolute imperative for the injured person to be independently represented. This fundamental requirement is missing from the code.'
Signatories to the new code are Admiral and its sister companies (Diamond, Elephant and Bell), Ageas, Allianz, Aviv, AXA, Co-operative Insurance, Covea Insurance, Direct Line Group, Ecclesiastical, Esure, LV, NFU Mutual, RSA, Skyfire Insurance Company Limited and Tradex Insurance Company.
