Clients are often anxious about bringing claims, especially against a friend or family member in road traffic accidents, or employers in workplace accidents.
The reality is that most claimants bring cases against insured defendants, so it is the insurance company that pays out.
Some classes of insurance are compulsory. Motor insurance and employer’s liability insurance are both required by law, so if injured by a motorist, a claimant would be unlucky for there not to be insurance in place.
For those cases where there isn’t an insurance policy, or the injured person doesn’t know who injured them (e.g. in a hit and run) then we have the Motor Insurers Bureau which exists to compensate victims of uninsured and untraced drivers.
Work accident claims
Although slightly more tricky work accident claims are also normally fine. Problems arise for workers injured off site, as it will then depend on the level of control the employer had in terms of controlling the risks.
Other problems occur with definitions of ‘employees’ and industrial disease claims, which can often manifest themselves many years after the employment has ended, when employers may be defunct or have changed hands (TUPE) many times.
Public liability claims
Problems arise most commonly with public liability claims where insurance is not compulsory. Even where businesses are prudent enough to take out insurance, to keep costs down, there are often large “excesses” (an amount paid by the policy holder before the insurer steps in).
For some defendants this can be tens of thousands of pounds, which is no use at all if they then become insolvent. This most commonly occurs in pubs, clubs and restaurants and often means perfectly valid claims have to be abandoned because there is no prospect of recovery.
Very large entities will often ‘self-insure’ –again, not great if they then go under, Thomas Cook being the most recent example. ATOL will step in to repatriate and cover lost holidays, but ongoing compensation claims have been stopped in their tracks.
Medical negligence claims
Victims of medical negligence are not safe either. The NHS is self-insured, and good for the money, but many doctors and dentists are not covered and take out their own insurance. Unfortunately, if the insurer decides there has been a breach of their policy terms, they will often withdraw cover leaving the medic uninsured. Now doctors can be good for the money anyway, but not always.
Finally, what if the insurer goes out of business? Well, then we have the Financial Services Compensation Scheme – FSCS – which will pay most, but not all of any claim.
Author: Diane Parker, personal injury solicitor