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The following section addresses funding issues applicable in July 2022; however, significant changes are likely to be implemented in April 2023. To ensure you stay informed, please visit the website and download updated materials.
142. Every litigant must secure funding for their claim as lawyers and medical professionals expect compensation for their services, which can be costly. To provide context, the Court publishes payment rates for solicitors and individuals employed in solicitor’s firms, categorized by geographic location and seniority levels referred to as “grades.” At the onset of your engagement with the solicitor, they will provide written notification regarding their payment rates.
143. In broad terms, there are currently two primary funding methods for claims. Firstly, there is “Before the Event” insurance (BTE), where the “event” refers to your accident. This insurance fund covers the costs of your own lawyers as well as the defendant’s lawyers in the event that you lose the case. It is also commonly known as “legal expense insurance” (LEI).
144. Secondly, there is a “no win–no fee” agreement, also known as a Conditional Fee Agreement (CFA), with the condition being the success of your claim. The CFA is paired with insurance called “After the Event” (ATE) insurance, which is designed to cover the defendant’s costs in case your claim is unsuccessful.
145. Both types of coverage are accompanied by specific terms outlined in a “policy” document, and each has its own financial limitations.
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BTE INSURANCE IN MORE DETAIL:
146. BTE cover refers to legal cover that is commonly included in your household or motor insurance policy. Typically, the limit for BTE cover is £50,000, which is usually sufficient for moderate-sized claims. The premium for your motor/home policy includes the cost of BTE cover.
In terms of fault or liability in a claim, the insurer typically continues to cover your legal and expert costs, as well as the costs of the defendant, as long as a barrister or solicitor certifies that the chances of winning are reasonable. This certification may vary depending on the policy, ranging from “over 51%” to “over 60%”, and the figures may differ for the liability and valuation aspects of the claim.
148. Concerning the valuation of your claim, also known as “quantum” in legal terms, the BTE insurance provider generally continues to support your claim until the defendant presents an offer that you are unlikely to surpass in a trial. It is usually your solicitor or barrister who advises the insurer on the prospects of surpassing any offer as the claim progresses. This aspect is of utmost importance and is further discussed in section 22.
157. It is extremely uncommon for the individual (usually a driver) or organization (often your employer) responsible for your injury to personally bear the cost of your compensation.
158. The requirements of mandatory insurance dictate that as soon as a claim is reported to the insurance company, they assume the position of the defendant and take charge of the defense against the claim.
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159. While this is usually the case, there are exceptional circumstances in which insurers choose not to provide coverage (“indemnity”) due to a breach of the insurance contract by their client. Additionally, there are specific situations in which compensation is provided by a different legal entity, such as:
(a) The Criminal Injuries Compensation Authority (CICA), which handles cases involving injuries resulting from criminal acts (refer to the website for further information).
(b) The Motor Insurer’s Bureau (MIB), an organization that deals with claims related to road traffic accidents where the responsible driver is either uninsured or cannot be identified (refer to the website for more details).
HOW SHOULD THE INJURED PERSON VIEW THE INSURER?
160. It may seem obvious, but it is worth emphasizing that the insurer is not the party responsible for causing your injury. The role of the insurer, along with the solicitor or barrister they may engage to defend against the claim, is to challenge the fault or liability aspect of your claim and attempt to limit the amount of compensation awarded to you. Thus, while the insurer is your inevitable “adversary” in this process, it is crucial to maintain a professional relationship with them in order to facilitate the best possible resolution of your claim.
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AGGRAVATING FACTORS FOR INSURERS AND THEIR IMPACT
162. Insurers are greatly aggravated by inflated claims and late additions to a claim, as these actions can undermine an otherwise fair offer made by the insurer. Additionally, insurers have a strong determination, as they should, to prevent fraudulent claims from succeeding.
CLAIMANTS ENGAGING IN ENTIRELY DISHONEST PRACTICES
163. There exist a small number of claimants who bring forth completely false claims, fabricating accidents that never occurred or orchestrating deliberate incidents. In some cases, friends or family members falsely assert that they were injured in a genuine accident, despite not being present at the scene. Both types of claimants are rightfully exposed to severe criminal penalties, including imprisonment.
DISHONESTY WITHIN A VALID CLAIM
164. Insurers also have the responsibility to identify and address dishonest or exaggerated claims, even in cases where there is a genuine injury. It is unjust for insurers to be compelled to provide compensation for claims that have been invented or grossly overstated.
165. Given that the system is adversarial in nature, a certain degree of tension between the parties involved is inevitable. A claimant who has a poor work history prior to the accident will face significant challenges in convincing the insurer or the judge that they would have sustained continuous employment or attained repeated promotions had it not been for the accident. Claims made on such grounds are highly likely to prompt the defendant to thoroughly investigate the claimant’s work history, delving into personnel records and scrutinizing relevant records from the Department of Work and Pensions (DWP) to assess the claimant’s capabilities and limitations. Additionally, surveillance video footage may be obtained to further evaluate the claimant’s situation.
166. Once again, it is crucial to emphasize that the burden of proof falls upon the claimant. To substantiate their claims, the claimant must provide sensible and credible evidence, whether from their own testimony, former colleagues, or other individuals capable of providing persuasive evidence.
A NEW CLAIM MADE AT THE END OF THE PROCESS
167. The insurer may become frustrated when confronted with a claim that initially appears modest but suddenly, at the eleventh hour, after frenzied efforts on the claimant’s part, culminates in a final Schedule of Loss. This document, which outlines the details of your claim (refer to section 17), reveals a much higher value than previously presented and may even introduce new claims that were never previously mentioned.
168. Such a substantial alteration can disrupt the insurer’s ability to adjust the financial provision, known as the ‘reserve,’ in a timely manner to facilitate a settlement offer. It may also cause the insurer to become obstinate and engage in a protracted battle over the claim, despite the likelihood of a reasonable settlement.
169. An adjusted reserve may also necessitate approval from a higher-ranking individual, inevitably leading to irritation, resistance, and delay.
MAINTAINING THE RELATIONSHIP DESPITE YOUR DIFFERENCES
170. Though not immediately apparent, your objectives and those of the insurer often align more closely than expected:
(a) Maximizing the prospects of the injured party’s return to work and their ability to earn as much income as possible, thereby minimizing the insurer’s exposure to future loss claims.
(b) Resolving the claim.
(c) Doing so as expeditiously as feasible to limit legal and ancillary expenses (e.g., After-the-Event insurance premiums, which can be exorbitant and escalate during the claim process).
171. Of course, in certain cases, representatives on both sides can clash, leading to entrenched positions. The claimant may perceive the insurer’s refusal of an interim payment as an unfair attempt to wear them down, while the insurer might believe that the claimant’s side is fabricating or prolonging claims to manipulate costs.
172. In most instances, cases proceed more smoothly when litigants maintain a firm yet respectful rapport. This is always preferable because when parties become embroiled in disputes, they often need to seek resolution through the court system, and the outcome becomes less predictable.
The primary and most vital aspect is to interact with the insurer in a scrupulously honest manner. Remember, suspicions breed resistance. It is crucial to reiterate that if you inform an expert that you can only walk a maximum of 100 meters, but over time, you manage to walk a mile—especially if the defendant possesses footage documenting this—their opinion of you may be tainted, perceiving you as someone inclined to exaggerate every aspect of your claim. As a consequence, they will approach your solicitor and claim with skepticism. Do not allow a single careless inaccuracy to permeate your entire claim.
174. It is common for the defendant to withhold any surveillance footage they may have obtained (typically in larger cases) until a relatively late stage in the proceedings. Normally, this occurs after you have signed your witness statement and/or an updated Schedule of Loss, both of which document the limitations and losses you are asserting and have affirmed as true.
175. It is worth noting that both insurers and the courts appreciate claimants who prioritize a return to work. Naturally, you should not rush to return before you are physically and emotionally prepared, and you may not be capable of resuming work on a full-time or gradual basis. However, as a general rule, genuinely attempting to reintegrate into the workforce sends a strong message that you are actively striving to minimize the impact of the accident on your life.