A recent case involving Royal Sun Alliance revealed some of the practices adopted by insurers in dealing with motor accident claims. It is important that claimants are aware of insurers’ ethical standards before deciding how to report and manage a car or bike accident claim.
On 2 September 2011 Royal Sun Alliance Insurance were heavily criticized by His Honour Judge Platt.
The case involved a simple transaction when RSA attempted to recharge the cost of repairing an innocent policyholder’s car to the at fault driver’s insurance company.
These extracts are quoted verbatim from the Judgement:
“Behind this simple story lies a giant struggle which has been going on for many months between RSA on the one hand and a number of defendant insurers over a method of business which is seen on the part of RSA as perfectly legitimate and by a number of defendant insurers as involving methods of business which fall somewhere between very sharp practise and outright fraud.
“While the sums in each individual case are very modest it is clear that across the industry millions of pounds are at stake.
“To this must be added very serious complaints about failure on the part of RSA to comply with pre-action protocols and orders for disclosure which…… are properly to be taken into account when considering the issue of costs.
“The effect of the arrangement which RSA has sought to implement is at best to pass on to the defendant's insurers some part of the administration expenses incurred by RSA in dealing with the claim thereby inflating the total repair costs.
“Other and less innocent explanations are not necessarily to be rejected out of hand.
“It is also worth noting that this scheme could only be effective and profitable to RSA so long as RSA were able to conceal from other insurers what they were doing.
“This would seem to explain the quite extraordinary lengths to which RSA through its solicitors …. have been prepared to go in order to conceal the true position …..in answer to proper requests for disclosure from defendant insurers.
"I believe there is a possible and legitimate explanation for this VAT discrepancy but it involves some asumptions as to the complex VAT regulattions which is certainly not within the experience of most judges in the county court.
“It also involves arriving at a conclusion ……. which is wholly at odds with the position which has been argued by the claimant's solicitors.
“The court is left with the clear and unhappy impression that …. RSA and its solicitors ……. remain in a mindset where the obligation to make proper disclosure is some kind of optional extra. Such an attitude stands in sharp contrast to the lofty statement of principle which appears on the RSA website:
"RSA Business principles: Integrity
We will act with openness, fairness, integrity, and diligence. We will always adhere to the applicable laws, regulations and standards in the places that we do business."
“The court can only express its disapproval of the behaviour of RSA in terms of costs.”
The full text of the Judgement is in the public domain and can be accessed by googling 1UC62538.
Vamco Ltd is experienced in handling all types of road accident claim and specializes in recovery of costs and compensation from third party motor insurers. Vamco will provide advice free of charge on the merits of any motor insurance claim.