Could you please explain the advantages and disadvantages of an early settlement with an insurance company?
An early offer to settle a personal injury claim* is often referred to as third party capture. It is a term used to describe a situation when a potential claimant who has suffered a personal injury due to the negligence of another party, is directly approached by the negligent party’s insurance company with an unsolicited offer of compensation. These approaches are usually made soon after the time of the accident and subsequent injury when the potential claimant is likely to be at their most vulnerable.
An offer of compensation from the negligent party’s insurance company may or may not be an adequate amount in respect of the injury the potential plaintiff has suffered and so, they should always seek professional advice from a personal injury solicitor. Unless a full evaluation of the injury has been conducted, and an assessment on the effect it has had on the potential claimants’ quality of life been carried out, determining the amount of compensation the victim is entitled to is almost impossible.
Although there is no evidence to imply that insurance companies consider their own profits before the wellbeing of the potential plaintiff whose injuries were caused by their policyholders negligence, and that their offer may be worse than one obtained by application to the Injuries Board or through a solicitor’s negotiations, third party capture is often subject to negative connotations.
It is, therefore, important to have to have an offer of compensation from an insurance company evaluated by a legal professional. If the potential plaintiff agrees to a compensation settlement from the insurance company, which indeed proves later to be an insufficient amount to cover his or her medical expenses or support his or her family, it is impossible to return to the insurers to ask for more. That said, some positive aspects can emerge from third party capture in personal injury compensation claims.
The liability of the insurance company’s policyholder has effectively been recognised as a consequence of the approach. Any application for assessment of the potential plaintiff’s personal injury claim made to the Injuries Board should subsequently advance in speed.
The accident victim’s solicitor will then be in a position to directly enter into settlement negotiations with the negligent party’s insurance company which, in many cases, leads to the settlement of a personal injury claim much quicker than it would via the Injuries Board.
For catastrophic injury cases the victim’s solicitor can apply for interim payments of compensation if not all consequences of his or her injuries are established, or if there is a need for immediate finances to cover medical attention, until when his or her compensation claim is completely and adequately resolved. However, interim payments are rarely provided.
There is always a risk that the plaintiff could be under-compensated by an inappropriate offer of compensation so it is always in the potential plaintiff’s best interest to understand what is third party capture and seek expert legal advice at the first opportunity possible. If the potential plaintiff does receive an offer from an insurance company they should, in every circumstance, make sure that it is properly evaluated by a solicitor.