FSA review of Third Party Capture for Accident Victims
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Issued 11 January 2010
The Financial Services Authority (FSA) has updated its website with
guidelines on third party capture, whereby injured accident victims are
contacted by the insurers of the driver who was at fault in a road traffic
accident or sometimes an employer if an employee was injured at work. It is not
illegal for insurers to do this, however, accident victims must remember the
insurers are not working for them.
The FSA’s guidelines are summarised below:-
• Injured accident victims do not have to accept any services or
compensation offer;
• Injured accident victims do not need to make an instant decision;
• Accident victims should consider undergoing a medical examination to
reveal the full extent of their injuries;
• Most offers of compensation will be offered on a full and final
settlement basis, which means you cannot ask for more compensation if your
injuries are more serious than they seemed at first;
• If the insurer refers an accident victim to a solicitor, they may be paid
for the referral. Accident victims can see a solicitor of their own choice
instead;
• Accident victims may get their compensation quicker by settling directly
with the insurer however the level of compensation may be lower than
compensation negotiated by a solicitor;
• Accident victims have the right to seek independent legal advice.
These guidelines were updated after a review into third party capture by the
FSA. Third party capture is mainly used in road traffic accidents but can be
used in employer liability cases. The key findings of the review were:-
• Concerns were raised that accident victims may not receive fair and
reasonable treatment and compensation;
• Third party capture is, as all insurance claims, regulated by the
Financial Services and Markets Act 2000 so an insurer’s conduct must comply
with the FSA’s Principles for Businesses;
• Third party capture only related to a small proportion of claims;
• Most insurers had processes to safeguard vulnerable accident victims such
as children or accident victims with complex injuries;
• The data was inconclusive as to whether accident victims would have won
higher compensation if they had legal representation;
• Standards of record keeping varied.
The FSA concluded that third party capture does not necessarily cause
detriment but there is a risk accident victims may settle without considering
all their options. Insurers should still make fair and adequate offers of
compensation and accident victims should be fully informed of their rights,
including the right to independent legal advice. The Association of British
Insurers (ABI) is planning to publish a code of practice for insurers dealing
with third party claims in early 2010.
We strongly recommend accident victims to seek independent legal advice as
soon as possible to avoid the risk of being under-compensated. If you have been
injured in an accident that was not your fault, please contact Vickki Ridgway on
0116 212 1000.
Lawson-West specialise in commercial, business and employment law. Our team
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