Insurer slammed for advising claimants to cancel ATE policies

This article was published on: 02/22/13

David Byrne of Scott Rees & Co in red background

Scott Rees & Co solicitors, a personal injury firm in Skelmersdale, have labelled Sabre Insurance Company Limited’s bid to encourage a retained client to cancel their agreement with them as “unacceptable” and accused the firm of showing a complete disregard to the best interests of the client.

The firm and their client received a copy of the same letter on the 10th January 2013, in which an offer of an increase of 10% in general damages was made directly to the client, on the grounds that they cancelled their Conditional Fee Agreement with Scott Rees & Co and an After-the-Event insurance (ATE insurance) policy to protect clients in the event of any adverse costs against them.

The letter focuses on the SIMMONS V CASTLE decision to uplift general damages by 10% after the implementation date of the Jackson Reforms on the 1st April, saying that the letter is written as a reminder of the terms of the regulation before making the offer, subject to liability.

David Byrne (pictured), Scott Rees Partner and Merseyside Regional co-ordinator of the Motor Accident Solicitors Society has reacted angrily to the approach, stating that it was a deliberate attempt to force the client to cancel their contract with the solicitor by producing a sugar coated counter offer that was not as good as it would seem in order to benefit Sabre themselves.

He said: “The offer made in the letter is not competitive and offers no real advantage to the client but it may save Sabre paying the uplift on our costs, the client’s damages and will release them from the cost of the ATE policy.

“The offer was also subject to availability which would mean that if the claimant accepted this offer and then liability was not accepted the client might not be able to obtain the ATE funding or, would only be able to obtain it at an inflated rate, which we have no doubt Sabre would dispute the client’s right to recover the ATE fee at the inflated rate.

“All in all, the offer submitted in this letter stands only to benefit the insurance firm and would be highly damaging to the client. How this firm can go around making offers to client before any medical evidence of the injury is ascertained is beyond me.

“This is a typical example of the dirty tricks the insurance industry is prepared to play in order to line their own pockets and ultimately the one who ends up suffering the most is the client.”

In response to the letter Sabre refused to apologise for contacting the client and denied that it was an attempt to correspond directly with the claimant, claiming that they were simply providing them with a copy of the correspondence of the law firm.

Scott Rees are now considering whether or not to follow Elite Insurance’s lead. Elite, who are one of the country’s largest after-the-event insurers, also received a letter of this nature and reported Sabre to the Financial Services Authority.