The Third Party Capture Debate in the UK

Insurance firms in the UK increasing are their efforts to reduce the role of solicitors in settling personal injury claims.  One of the most contentious issues is the intensification of third party capture, which involves insurance companies contacting the third party (i.e. the victim of their client) with a claim against their policyholder and making a rapid offer to settle.  The objective is to stop the victim contacting a solicitor.   Solicitors argue that independent legal advice is essential because of the clear conflict of interest for insurance companies, which try to keep their compensation amounts as low as possible.
The practice of third party capture has been around for several years in the UK and has also started to appear in Ireland.  The Association of British Insurers is expected to publish soon a new voluntary code of conduct that specifies how to contact victims and in particular ensures that a victim’s right to independent legal advice is respected.   In the UK, insurance company activities are regulated by the Financial Services Authority and are not subject to the 2006 Compensation Act.  There have been calls for an administrative approach to injury compensation claims in the UK, with the systems in Ireland and New Zealand cited as examples. The Irish insurance successfully lobbied for the creation of the Injuries Board.  There was an immediate drop in the amount of compensation paid to victims – and a corresponding benefit of a drop in insurance premiums and increase in insurance company profits.  However, people are now more aware that they should use a solicitor with the Injuries Board for anything but the most simple personal injury claim.  The injury compensation payouts in Ireland have now returned to more regular levels the interests of victims are now usually represented by solicitors.  However, the Injuries Board has resulted in much faster processing of claims so its overall impact has been beneficial.