Have you suffered personal injury in a car accident, in a slip and fall at a supermarket/shopping centre, or perhaps tripped over something on a cruise ship or aircraft? Have you also chosen to handle your claim against the CTP/public indemnity insurer yourself? If so, you may well have been sent an Offer of Settlement by the insurer to finalise the claim.

Accepting an offer from an insurer soon after your injury might sound like a convenient way to resolve your claim.  However you should consider seeking legal advice before you settle your case.  This is because the full extent of the harm caused by the accident cannot be determined straight away, and any early offer may not even consider what you future loss may look like. If your injuries have not stabilised and you decide to take the first offer (which is often quite low), you may well be under settling your claim.

Furthermore, an insurance company’s goal is not to maximise the payment that you receive but rather to keep payouts as low as possible so premiums are competitive.  If there is a chance that you could be under settling your claim, it is not in the insurance company’s interests to warn you about this.  On the other hand we as solicitors act in our clients’ – your – best interests and fight for what you are entitled to.

Consider the following scenario:

Sally is a single mother and works full time at as a factory packer, earning approximately $40,000 per annum. Sally suffered an injury after she slipped and fell at the local fruit shop. She saw her GP and was advised that she had soft tissue injury to her back, however she did not think the pain would last very long.

The insurer for the fruit shop offered Sally $5,000 to settle her claim without admitting liability. Sally thought this offer was amazing and accepted it only three months after the injury occurred.  Sally signed a form waiving her rights to bring any future claims arising from the accident in exchange for the $5,000 payout. 

 Twelve months later, Sally’s back injury had not improved and she was sacked from work. She could no longer perform any lifting or bending over 5kg. Her son spends 10 hours per week helping with chores she cannot perform. Sally can no longer afford to pay her bills and is being threatened with eviction. 

The Offer of Settlement made to Sally by the insurer did not consider her future needs such as her need for domestic assistance, loss of earnings or her pain and suffering. This was ultimately to Sally’s detriment as she completely waived her legal rights to the compensation that she deserved.  If Sally had sought legal advice, the risk in under settling her claim by accepting the $5,000 would have been explained to her.  Her recovery would have been monitored by her solicitor and medical assessments arranged when her injury had stabilised, allowing Sally’s lawyers to advise her on her claim for future as well as past losses.

If an insurer makes an offer to you, we strongly recommend that you seek legal advice to ensure you are adequately compensated. If you have suffered personal injury in a car accident, in a public place, or whilst overseas, and are not sure whether you should take an insurer’s offer, please contact Stacks Goudkamp on 1800 25 1800 as soon as possible for a free initial consultation.  Alternatively please make an online enquiry.

Written by Vladana Vracar.

Vladana is a Law Clerk in Julie Mahony’s Practice Group. Vladana works with Julie on a variety of compensation claims including trips slips and falls, accidents on the road and medical negligence claims. Vladana is due to be admitted as a Solicitor later this month.