When you’ve been injured in an accident that wasn’t your fault, and you’re thinking about claiming compensation, one of the first hurdles you may encounter is an early settlement offer from the other party’s insurance company.
At first glance, this might seem like a lucky break. You’ve only just started the claims process, and there’s already money on the table. It’s tempting to accept the offer and move on – but is it wise?
The answer depends on what kind of offer is being made. Some initial offers are quick attempts to settle your claim for a low amount. Others, such as Part 36 or Calderbank offers, carry significant legal weight and should be considered carefully with the assistance of a legal expert, typically a personal injury solicitor.
It’s important to understand the distinction between the two types of offer.
The Problem with Early, Unsubstantiated Offers
It’s common practice for insurers to make early settlement offers soon after an accident at work, a slip, trip, and fall accident, or anytime when the injuries initially appear to be minor. These offers, known as pre-medical offers (or ‘pre-med offers’, for short) are sometimes made before any medical evidence has been obtained and without a proper assessment of your losses.
Why do they do this?
Because insurance companies are businesses. Their primary goal is to resolve claims as cost-effectively as possible. The quicker they can close your case, the better it is for their profit margin.
But the issue with these early offers is this: once you accept, there’s no going back. Even if your injuries turn out to be more serious or longer lasting than initially thought, you won’t be able to reopen your claim for additional compensation. That’s why early offers, especially those made without obtaining any or much medical evidence, should generally be approached with extreme caution.
*It should be noted that the Civil Liability Act 2018, implemented in May 2021 through the Whiplash Injury Regulations 2021, effectively banned the use of pre-medical offers in low-value Road Traffic Accident (RTA) claims involving whiplash injuries, under the Official Injury Claim (OIC) portal * So, note that the ban applies to certain categories of RTA claims, not all.
How Do You Find Out What Your Claim Is Worth?
To make an informed decision on whether to accept an offer from an insurance company at any stage during the court process, you need to understand how the value of your injury claim is arrived at by those advising you. This requires assessing:
- The nature and severity of your injuries
- The length of time your injuries are likely to affect your daily life or ability to work.
- The cost of medical treatment, rehabilitation, adaptation of property or motor vehicles and future care costs, to mention but a few of the items of loss that could be involved in your claim
- Out-of-pocket expenses and financial losses (e.g., lost earnings, travel costs)
At Mooneerams, our award-winning team of personal injury lawyers work with medical experts who will carry out a medical examination and then provide a detailed picture of your injuries and prognosis in the form of a medical report.
We also study the same guides followed by Judges in court in the form of The Judicial College Guidelines for the Assessment of General Damages in Personal Injury Cases (known as the Judicial College Guidelines). This book provides ‘bands of compensation’ for almost every conceivable type of injury.
Only then is it possible for us, as your lawyers and the defendant’s insurers and solicitors, to be able to assess what your claim is likely to be worth.
The importance of having a personal injury solicitor on your side
Hiring a knowledgeable personal injury solicitor early on, before you start a claim, gives you the best chance of securing a good settlement of your compensation claim. Your solicitor will guide you through the legal process and ensure no element of your claim is overlooked. They will steer your claim towards a court hearing in the knowledge that it’s likely that the defendant’s insurers or solicitors will make an offer of settlement.
This brings us to a more formal type of offer: Part 36 and Calderbank offers.
What are Part 36 and Calderbank Offers?
Not all “first offers” are made before or at the beginning of the court process. In many cases, insurers will wait until after medical evidence has been obtained and documentation in support of other losses have been collated to start making offers to settle the claim.
When the first offer in the claim comes, it could be in the form of a Part 36 (of the Civil Procedure Rules) offer or as a Calderbank offer (a form of “without prejudice save as to costs” settlement offer).
Why should these types of offers be given more serious consideration than an early first offer?
These types of offers come with potential legal costs consequences.
If the claimant rejects a Part 36 or Calderbank offer and then fails to beat that offer at trial—meaning the court awards the same or less than what was originally offered—the claimant may be ordered to pay some of the defendant’s legal costs from the date the offer was made. This can significantly reduce, or even eliminate, the compensation you receive.
So, while a typical early offer might be dismissed without much concern, a Part 36 or Calderbank offer cannot and should not be ignored.
More reasons for getting expert Legal Advice
Working out whether a formal offer from the defendants is reasonable requires a good deal of experience, sound judgment, and an accurate estimate of how your claim is likely to be valued in court. An experienced personal injury solicitor will:
- Carefully review the terms of the offer
- Compare it with the projected value of your claim
- Advise you on the risks of rejecting the offer, including any potential legal costs risks
- Help you make a fully informed decision
Sometimes, the best advice will be to accept the offer—particularly if it falls within the same valuation range that you have advised would be an acceptable one. Yes, you may get a bit more if you go to court, but equally, you might get less.
A reasoned acceptance of the offer avoids the risk of a lower award (and costs penalty) at trial. If the case has been ongoing for, say, a year or thereabouts, the cost penalty of not beating the Part 36 offer could genuinely wipe out any compensation you receive.
Other times, your solicitor may advise you to reject the offer and counter it with one backed by strong evidence and legal reasoning.
A Tale of Two Offers: An Example
Let’s contrast two scenarios to illustrate the point:
Scenario A – Early, Informal Offer
You’re offered £1,500 to settle your claim two weeks after your accident. No medical evidence has been obtained yet. You’re still experiencing symptoms, and you haven’t had time to calculate your financial losses.
This offer should be rejected. It’s too early in the process to understand the full impact of your injuries, and you risk under settling your claim dramatically.
Scenario B – Part 36 Offer Later in the Process
You’ve had a medical examination (or several), your prognosis is available, and your solicitor has submitted your schedule of losses. Your solicitor believes you would receive between £75000 and £85000 if the matter went to court. The insurer/defendant solicitors then make a Part 36 offer of £80,000.
This offer must be considered carefully. It is right in the middle of your solicitor’s estimate as to what your claim might get settled for at court. Whilst you could receive more at court, accepting the offer could be in your best interest, as the costs of not beating the Part36 offer would leave you with little or nothing in terms of compensation. (This example is illustrative of a serious orthopaedic or psychiatric injury case, falling within the multi-track).
Conclusion: Should You Accept the First Offer?
There’s no one-size-fits-all answer. The better question is:
What kind of first offer is it?
- If it’s a first offer without medical evidence or proper valuation, the answer is usually no. Such offers are rarely in your best interest.
- When it’s a Part 36 or Calderbank offer, the answer depends on the skill of your solicitor and possibly a barrister to provide a careful legal analysis of what your claim is worth. The offer may represent a fair outcome and one that, if rejected, could have profound cost implications for you, the claimant.
There are some cases where you will be advised to accept the first offer without making a counteroffer (as there are time limits involved in accepting a Part 36 or Calderbank offer).
Our advice to anyone considering handling their own personal injury case is ‘don’t’. Dangers lurk around every corner in the claims process for the unsuspecting. If you are not familiar with the process, it’s very easy to fall foul of the rules, regulations and time limits involved.
Instead, seek legal advice and involve an experienced personal injury solicitor from the outset. They will ensure your claim is accurately valued, negotiate assertively on your behalf, and protect you from the risks of accepting too little or rejecting too much.
At Mooneerams Solicitors, we only represent claimants – never insurers. If you’re considering starting a claim, call our experienced personal injury team on 029 2199 1927. We handle most personal injury claims on a No Win No Fee basis.
