HOUSTON—If you or someone close to you has been injured in an accident, you know how physically and emotionally traumatic the experience can be. It stands to reason then, that accident victims should be given time to recover and fully understand the ramifications of the accident before they are expected to negotiate personal injury compensation.

Unfortunately, insurance companies have begun to employ a settlement method called “third party capture” with alarming frequency, despite mounting criticism from consumers, legal experts and injury watchdogs. The practice involves contacting injured victims of accidents—people who would potentially make a claim for personal injury compensation—directly, and offering them a settlement before they have taken legal advice. These offers are often far less than the amount of compensation the victim could have received if he or she had first consulted with an injury claims specialist.

Insurers defend the method, which they refer to as “third party assistance”, as a means of reducing unnecessary legal costs and enabling claimants to receive compensation more quickly than if they contact a legal representative. Consumer and claimant groups, however, argue that the practice puts undue pressure on victims to accept lower settlements, and to settle without considering all of their options.

In December 2009, the Financial Services Authority (FSA) concluded that third party capture was not inherently detrimental to claimants, but that there was a risk, in some cases, that they would settle for less than what they were entitled to. The findings, published in a fact sheet, reminded insurers of their obligations to make sure unrepresented claimants were fully informed of their rights—including their right to independent legal advice—and that their interests were properly safeguarded.

In response to the FSA’s release, the Association of British Insurers (ABI) published a voluntary code of practice on “third party assistance” and a consumer guide. Under the code, unsolicited personal visits are banned, and insurers are only allowed to contact unrepresented claimants for the first time by telephone, text, email or letter. Phone calls are to be followed up in writing, and texts are limited to one message asking the claimant to call back. If there is no response, no further texts are to be sent. The code also states that at each stage of the process, insurers must remind claimants of their right to seek independent legal advice and of the other options for pursuing their claim, such as through the court.

In June 2010, the Association of Personal Injury Lawyers (APIL) responded with a warning to consumers to “Beware of the ‘wolf in sheep’s clothing’,” referring to the ABI’s insurance guide. “[We have] been long concerned about a growing trend for the insurer of the person who caused the injury to make direct contact with the victim, offering to settle the compensation claim direct,” the APIL said in a press release. “We have sent evidence to the FSA to illustrate occasions when insurers have quite clearly attempted to under-settle claims in these circumstances…[and] have also heard about quite shameful pressure to settle being brought to bear on vulnerable and injured people.”

One of APIL’s key concerns is that most people know nothing about the compensation system, which makes it difficult for them to judge whether or not the compensation they are being offered is fair or correct. They also express concern about the part of this approach that involves people being “cold-called” by insurers, when they are at their most vulnerable.

The APIL recommends that injured parties seek independent advice about such key aspects of their case as medical reports, rehabilitation, and the level of compensation to be expected. What is cited in the ABI’s guide as an “unnecessary” legal cost might make all the difference in putting someone’s life back on track after being sidelined by a needless injury.

If you or someone you know has been the victim of an accident and require independent legal advice to receive the compensation you deserve, contact the experienced team at Sullo & Sullo, LLP. Our lawyers understand how difficult it can be to recover from the emotional, physical and financial setbacks of a personal injury and are here to help. Call us at 713.839.9026 for a free legal consultation today.