The FSA’s intervention in third party capture cases may prompt a timely overhaul of personal injury claims, says Ellen Bennett
At first glance, the FSA’s decision to step into the third party capture row may seem a strange one. The regulator has capitulated to the pleas of lawyers and trade unions and agreed to review evidence of alleged bad practice among insurers who contact third parties directly in personal injury cases.
For those insurers, the case is clear cut. They are simply trying to take time and money out of the notoriously wasteful personal injury claims process. The majority of that time and money is being spent on lawyers, so it is hardly suprising that the lawyers are complaining.
Yet the lawyers claim to have hard evidence, and, anecdotally, such instances of bad practice are acknowledged, though they may not be widespread. This is not good for the industry’s image, and it flies in the face of the Treating Customers Fairly principles – even though third parties are not strictly speaking customers, insurers have duties to them if they have been injured by their policyholders.
If the FSA agrees with the lawyers, that there are multiple cases of bad practice in this area, then there will be added pressure for a quick and effective overhaul of personal injury claims. This would entirely remove the need for third party capture, and would thus be in the interests of everyone involved – insurers, lawyers, claimants and regulator alike.