An article in the Irish Times has warned accident victims to be wary of offers of compensation settlements from insurance companies.
The author of the article – Brian Byrne – provided an interesting analysis of injury compensation settlements, and reported a 22 percent increase in the value of compensation claims settled in the first 6 months of the year – up to €144 million from the same period in 2013.
Byrne´s analysis shows that, although the average compensation settlement of a personal injury claim made to the Injuries Board remained practically unchanged at €22,000, the number of claims increased significantly within the categories of claims handled by the independent body.
According to the figures from the Injuries Board ´s six-month report which were used to compile the article, motor liability claims increased by 24 percent, the number of public liability claims rose by 30 percent, and claims made against an employer for an injury at work were up 10 percent on 2013.
The large increases were attributed to a spike in claims made during last year which were resolved within the first six months of 2014. However, despite the higher number of claims being resolved through the Injuries Board process, Byrne warns accident victims to be wary of offers of compensation settlements from insurance companies.
According to the article, an estimated 40 percent of personal injury claims which could be resolved through the Injuries Board process claims are settled “behind closed doors”. He says that private agreements made between plaintiffs and insurance companies have the potential to result in a lack of competitiveness, higher insurance premiums, and the potential for false or exaggerated claims to be settled without a proper investigation of the claim.
However, the Irish Times article omits to comment on the growing trend for “third party capture” – an industry term for when an insurance company talks an injury victim into a compensation settlement lower than what they might have been entitled to in return for a fast settlement.
Offers of compensation settlements from insurance companies can result in financial hardship for the injured victim if they is accepted and subsequently too low to cover medical expenses and living costs. Meanwhile the insurance company may have made a significant saving in its financial liability and can enjoy higher profits.
One potential solution for this situation is to construct a register of settled personal injury claims based on figures coming from the government´s new “Recovery of Certain Benefits and Assistance Scheme”. As insurance companies now have to obtain a certificate of benefits from the Department of Social Protection before settlements of personal injury claims can be paid, it should be possible for the Department of Social Protection to record the value of the claim and start to compile a register.
In this way, there would be visibility of how much compensation each claim is settled for, so that concerns about a lack of competitiveness, higher insurance premiums, and the potential for false or exaggerated claims could be eliminated. Accident victims would also have a point of reference if they receive offers of compensation settlements from insurance companies.
While such a register does not exist, it is advisable for plaintiffs who receive offers of compensation settlements from insurance companies speak with a solicitor to ascertain whether the offer being made to them represents a fair and accurate settlement of their claim.