Pre-med offers in personal injury cases are regularly made by insurance companies. Why is that a problem? Basically because a pre-med offer is an offer made before the Claimant has produced any medical evidence in support of the claim: before we as solicitors have obtained any medical evidence to confirm that our client did in fact sustain an injury.
This type of offer is commonly known as a pre-med (pre-medical) offer.
What is the problem with pre-med offers?
From the Claimant’s point of view there are a number of issues: not least the fact that, unless the Claimant has already made a full and complete recovery at the time that the pre-med offer is made, it is impossible for a Claimant solicitor to accurately value a claim without the benefit of medical evidence.
Valuing the claim
The value of a claim is assessed by reference to a number of factors but the medical evidence is key. The medical report sets out details of the injury sustained, the treatment required, the effect of the injury on the Claimant’s ability to carry out his or her normal activities of daily living, and the prognosis for recovery. Factors such as future complications or deterioration are considered, as is the likelihood of future loss of earnings and treatment costs being incurred.
On the basis that these factors cannot be properly considered without medical evidence, there can be a significant disavantage to a Claimant who accepts an early pre-med offer.
The bigger issue: personal injury fraud
The practice of making pre-med offers has been widely criticised by the Government, Claimant solicitors and insurers alike, as a practice which encourages fraud.
The insurance industry continues to lobby the Government to reduce the rights of accident victims to claim compensation. Indeed, the insurance industry has called on the Government to remove the right to claim compensation for whiplash-type injuries altogether in road accident cases.
On the basis of the insurers’ arguments about fraud, the Government is considering these proposals which will remove the rights of genuinely injured people to claim compensation for genuinely sustained injuries. All in the name of combatting fraud in road accident cases. (Read more about this here)
Just last year the Ministry of Justice introduced the MedCo system: a central system which nominates independent doctors to provide a medical report for use in support of any claim for soft tissue sustained in a road accident. MedCo was introduced as a measure to help to combat fraud by ensuring that injuries are assessed by an independent doctor in every case.
At the same time, the practice of making pre-med offers was widely acknowledged by all parties involved in the claims process as being a fundamental driver of fraud. Pre-med offers allow fraudsters to receive compensation for non-existent injuries without the need to provide medical evidence.
There have been calls for pre-med offers to be banned but, to date, the Government has failed to take such a step. Many insurers, as evidence of their commitment to combatting personal injury fraud, have stated that they no longer make pre-med offers. And yet the offers still roll in.
So why do insurers make pre-med offers?
Quite simply, pre-med offers are made in an effort to save the insurer money. They are not made for the advantage of the Claimant. They are made in the hope that a Claimant will accept an offer which is below the amount that he or she would be entitled to if the claim were properly assessed on the basis of medical evidence.
So what of the offer received on behalf of my client this morning? My client has yet to make a full recovery from her injury (a fact which I informed the insurers of the day before they made the offer). I have therefore advised my client to reject the offer and proceed with medical evidence. There is no concern that the medical evidence will confirm anything other than that a genuine injury has been sustained.
What about combating fraud in personal injury cases?
In this case there has been no harm done. But what of the other claims where the pre-med offer is more than the claim is actually worth? Or worse still, the cases in which an injury is fraudulently claimed?
Surely, if the insurers are serious about fighting fraud and reducing the costs of claims they should refrain from offering settlements in cases where the injury has not even been proved?
Surely the insurance industry should support an outright ban on the practice of making pre-med offers?