North East Solicitors Take Their Concerns Over Personal Injury Insurance Claim to Lord Neuberger, Master of the Rolls

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In yet another case of an insurance giant apparently ignoring the judicial guidelines for handling personal injury cases, Lord Neuberger considers the details of a case involving a retired North East grandmother.

Stephen Gowland of ILS Solicitors

Stephen Gowland ILS Solicitors

In this case, a major insurer showed scant regard for both the claimant and its own guidelines

At a time when Master of the Rolls, Lord Neuburger, is hitting the headlines for his review of super injunctions, he’s also been considering the implications of a personal injury insurance settlement brought to his attention in a face-to-face meeting with North East solicitor and Legal Executive, Stephen Gowland.

The solicitor had recently negotiated a hard-won settlement against one of the UK's largest insurers that involved a retired grandmother and, in the process, uncovered some questionable aspects of insurance industry practice. His concern at what he found sent Stephen on a crusade to bring awareness of 'third party capture' issues to the general public and, following a conversation with the Master of the Rolls, Lord Neuberger requested further details in writing.

It's worth noting that the very explicit guidelines being misused in this case, the Judicial Studies Board Guidelines, have a foreword written by Lord Neuberger himself.

The settlement was in favour of a Mrs Gloria Mould who suffered an injury due to a defective pedal bin in 2008. She contacted her insurer who she felt able to trust, as an initial phone call seemed very positive. They assured her that they could deal with the claim, and there was no need to seek legal advice.

Subsequently, the insurer sent Mrs Mould for a medical and, in October 2009, she received a letter from the industry giant offering ₤3500 for the injury and ₤500 for care. Surprisingly, there was no explanation of how the amount was calculated and, importantly, no recommendation to seek the advice of a solicitor or any independent advisor. It was at this point that a friend suggested that Mrs Mould speak to Stephen at ILS Solicitors.

He recalls his thoughts at the time, “Frankly, I was very surprised at the processes used by the insurer in handling the claim. These seemed completely at odds with the personal injury compensation guidelines and appeared to be designed to minimize the amount of any settlement. In fact, the insurer had made an offer based on the compensation guideline for a significantly less severe injury than the one recorded in their own medical report”.

Stephen continues, “Once we’d reviewed the medical report and the judicial guidelines, we calculated Mrs Mould's claim to be worth approximately ₤6-8000 for the injury alone and a substantial additional amount to cover the care she’d received.” Stephen could see, “that this was an attempt by the insurer to substantially reduce the level of compensation in a case involving a retired grandmother with little knowledge of insurance claims”.

Following Stephen taking on the case, the insurer increased their offer to ₤6540 and then to ₤7000 for the injury, but would not agree to the claim for care. They argued that their own report, later found to be lacking in thoroughness, didn’t substantiate any claim for care. So Stephen’s firm commissioned a new report that led to an increase in the offer to ₤12750, on which the claim was settled.

Stephen’s clear view, as a solicitor and Legal Executive, is that the final payment, more than three times the original offer, is simply what should have been offered to Mrs Mould in the first place based on the real value of the claim as laid down in the JSB Guidelines.

Having voiced his concerns to other members of the legal profession, Stephen eventually spoke to Lord Neuberger, one of the nation’s most senior judges, who was clearly concerned at the actions of a major insurer.

Stephen commented on his meeting earlier this year, “there was a welcome recognition that this case was probably not an isolated one and that these sharp practices may be common amongst even large insurers who supposedly operate to agreed procedures. The Master of the Rolls, in asking for further details of the case, was also sensitive to the fact that these cases potentially deny ordinary people like Mrs Mould, thousands of Pounds to which they’re entitled.”

He added, “Following my highlighting of this case with Lord Neuberger, the Master of the Rolls has written and advised me that the Financial Services Authority is reviewing this issue of what is formally called ‘third party capture’. We can only hope that this will lead to further action and, through voluntary or statutory processes, a ‘cleaning-up’ of the insurance industry in the way that it deals with claims."

In the meantime, Stephen believes that more awareness of this risk when making a claim will result in more people receiving the correct amount of compensation. He concludes, “At present, people have to be aware that if an insurance company offers to deal with them directly regarding a claim, or invites them to deal with one of the insurers solicitors, they're at risk of missing out on the proper compensation due to them. There are vulnerable people out there and they have to be advised against succumbing to this. Seek the advice of a local, independent solicitor who will look out for your interests.”

Given the details of this case, let’s hope that, however complicated the super injunction issue is, Lord Neuberger can find time fairly soon to make sure that the FSA addresses an issue that affects the ‘person on the street’, rather than celebrities.

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