Insurance companies which capture third-party personal injury claimants before they have consulted a solicitor should be regulated like claims management companies, the chairman of the Motor Accident Solicitors Society (MASS) insisted last week.


Addressing the MASS annual conference in Manchester, Tony Goff spoke out strongly against the 'undesirable' practice of third-party capture, arguing that insurers should have to abide by the 'same level of transparency' as claims managers now do.



'Liability insurers should never have been exempted from the provisions of the Compensation Act,' he said. 'It was a mistake and the government should, in my opinion, acknowledge that error and remedy the mistake as soon as possible.



'The Financial Services Authority (FSA) has neither the will nor the power, let alone the desire and resources, to police liability insurers as they go about their routine of acting as claims farmers and capturing third-party claims.'



Kevin Rousell, head of claims management regulation at the Ministry of Justice, told the Gazette that insurers engaging in third-party capture come under the FSA's jurisdiction, and 'there is no justification for double regulation'. He added: 'However, we continue to work with the FSA and other regulators to ensure appropriate safeguards are in place in for consumers wherever they enter the claims system and whoever handles their claim.'



In August, the FSA called for evidence about third-party capture after several groups raised concerns, and a spokesman denied that it was uninterested in the issue. 'We clearly stated, during the development of the Compensation Act 2006, our willingness to consider any evidence that suggests impropriety on the part of our authorised firms,' he said. 'We also confirmed our willingness to consider via our normal procedures whether there is a case for additional rules.



'We are now looking at the material the groups concerned have provided to us and are considering whether there is sufficient evidence to suggest that some firms may be treating third parties in a way that conflicts with our Principles of Business.'



Trade union legal consultant John Usher, who provided a lot of evidence to the FSA, told delegates in Manchester that insurers acting in this way faced an 'obvious conflict' that any solicitor would recognise and refuse to act in.



Nick Gunter, head of technical claims at Fortis Insurance, told the conference that in the first nine months of 2007, his company captured and handled 1,600 claims with no claimant solicitor involvement. They settled in 37 days on average, he said, and as far as he was aware, none was undersettled or attracted a complaint.



Mr Usher suggested there had been no complaints because people are not aware of what they are entitled to.



Neil Rose