The Association of British Insurers (ABI) has finally unveiled its new voluntary code of conduct for members dealing with RTA victims.
The representative body had promised last year to produce a re-drawn set of principles after civil just reforms placed more emphasis on third-party capture, where claimants are tied into settlements by their insurance company.
The ABI said its new code, signed by 15 leading insurance firms, will ensure the interests of customers with a personal injury claim are protected.
Under the code, insurers will:
- Ensure policyholders are made aware of their options when choosing a lawyer, including any links the insurer may have with them;
- Emphasise the customer’s right to choose their own legal representative;
- Not apply, or use firms who may apply, pressure such as cold-calling on customers to claim;
- Not share personal information with a third party if they have said they would not pursue a claim;
- Ensure that any third parties recommended to handle a claim will not increase legal costs for at-fault insurer.
Paul Evans, chairman of ABI’s general insurance council management committee, said: ‘Insurers campaigned over many years for much-needed reforms to the civil justice system, and remain committed to paying fair compensation to genuinely injured claimants as quickly as possible.
‘This code - which insurers initiated and drafted - helps to ensure that both the letter and the spirit of these reforms are embedded into the insurance industry’s everyday practice.’
The code was prompted by the government’s decision to slash fixed claimant costs for low-value RTA claims from £1,200 to £500 last April.
That increased the likelihood of claimants being left without legal representation, though the government shied away from raising the small claims court limit later that year – a move that would have taken lawyers out of the low-value process altogether.
When he made that decision, justice secretary Chris Grayling also pledged to end insurers’ practice of 'making offers to settle claims without requiring medical reports’.
The insurance lobby will hope this latest move will satisfy the government that it can self-police without the need for legislation.
The ABI added that its new code should 'strike the right balance’ between customers’ legal rights and their ability to file a claim within a system that does not encourage speculative and exaggerated claims.
John Spencer, vice-president of the Association of Personal Injury Lawyers, said the code is 'broadly welcome' in its aspiration.
'For instance, encouraging ABI members not to add unnecessary cost to the process is vital. However, it will not provide a substitute for the absolute imperative for the injured person to be independently represented. This fundamental requirement is missing from the code.'
Signatories to the new code are Admiral and its sister companies (Diamond, Elephant and Bell), Ageas, Allianz, Aviv, AXA, Co-operative Insurance, Covea Insurance, Direct Line Group, Ecclesiastical, Esure, LV, NFU Mutual, RSA, Skyfire Insurance Company Limited and Tradex Insurance Company.
The full code can be found at the ABI website.