The connection between an RTA in the UK and Wall Street
I read this morning on linkedIn a posed suggesting that some RTA insurers are refusing to accept or deal with new claims if they presented 4-5 months after the accident. It is unclear what grounds they are acting in such a manner considering the Limitation Act 1980 which allows for 3 years before claims need to be issued at court and the Pre-Action protocol and the overriding objective of CPR, both of which aim to “Deal(ing) with a case justly and at proportionate cost”.
It goes without saying that such a behaviour encourages the opposite of this aim and I in reply to the post suggested that if and when such a matter does go to court, the claimant should request indemnity costs from the Defendant, assuming it is successful. This is also allowed under the Pre-action Protocol as it states therein “The Civil Procedure Rules 1998 enable the court to impose costs sanctions where it is not followed”
So why are they acting like this. Well, one main theory is that they insurers are playing the “numbers game” whereby they hope that if a case is rejected at the outset, the Claimant will just turn around, tail between its legs and walk away. I have no idea if this tactic works but in the medical negligence “game” claims are litigated on the basis of evidence. If the case is strong and backed by expert evidence, then it will be pursued, no matter what. I do not envisage a situation where the NHSR (which is the body that deals with claimants against hospitals and GP’s) will just reject a claim because is was not presented within the allowed time frame with the underlying strategy or seeing whether it will just disappear….
This situation also resonates with me this week after seeing what reddit users have done on wall street. To those who have not been following this story, I will try and explain: - Hedge funds regularly place bets against certain companies on the stock market. Sometime they place a bet that a company will not do well and if this happens, they make money. So, a group of individual traders, using widely available platforms, started buying this company’s share making the share price go up, rather than down. This caused significant losses to the Hedge funds and they pressured the platforms to shut down in order to minimise their losses.
In a loose but similar way, the Hedge funds behaviour resembles the Insurance companies trying to exert pressure in order to ensure that their profits stay healthy. This began a few years ago with the new PI claims process which was devastating to claimant solicitors’ firm slashing their costs by a whooping 65% in 2013. Well, this new tactic by insures is not different but this time they are putting pressure on the equivalent of the individual traders being Claimant solicitors, and in the same way that Reddit users fought back, Claimant solicitors should not back down and pursue the insurers, hitting them where is hurts – in the pocket.