DIRECT LINE OR DIRECT LYING? – INSURERS AT IT AGAIN (7)
In Insurers At It Again (4) I commented on Direct Line Group and its relationship with DLG Legal Services, a firm of solicitors and part of the Direct Line Group.
The standard client care letter from that firm to its “clients” states “This firm is appointed by Direct Line.”
Clients – for which read insured of Direct Line – are not asked to sign anything but are rather told:-
“This letter and the attached Terms of Business set out the contract between us, and unless we hear from you to the contrary we will assume that you are happy for us to act based on the terms of the policy of insurance in place with your insurers.”
So what you may think. Well how about this, at paragraph 14 of the Terms of Business, which the client is not asked to sign:-
“14. Limitation of Liability
Your relationship is solely with DLG Legal Services. We have sole legal liability for the work done for you. No director or member of staff working as an employee or in any other capacity at DLG Legal Services will have legal liability for that work whether in contract, tort, or on any other basis. Our liability to you for a breach of your instructions shall be limited to 200% of the amount of our fees for the matter or £100,000.00, whichever is the lesser, unless we expressly state a higher amount in the letter accompanying these Terms and Conditions of Business. We will not be liable for any consequential, special, indirect or exemplary damages, costs or losses, or any damages, costs or losses attributable to lost profits or opportunities. We can only limit our liability to the extent the law allows. In particular, we cannot limit our liability for death or personal injury caused by our negligence. Please ask if you would like us to explain any of the terms above.”
Let us say that firm settles a matter in the portal and receives a portal fee of £500.00. The client sues as it turns out that the claim may be worth £20,000.00 or whatever more than it was actually settled for.
This firm of solicitors, independent of, but “appointed by” – their words – Direct Line are seeking to limit their professional indemnity liability to £1,000.00 in a claim settled in the portal.
I wonder what view the Solicitors Regulation Authority would take of any of the rest of us who sought to do that:-
“Sorry, we screwed up on your conveyancing and you have lost £1 million, but we only charged you £400.00 so here is our cheque for £800.00.”
Why does my firm have to have minimum Professional Indemnity Insurance of £3 million if we are free to limit our liability to just twice our costs on any particular matter?
In 2012 the Financial Services Authority fined Direct Line and Churchill Insurance £2 million because 27 out 50 files requested by the Financial Services Authority for review were “altered improperly” before they were submitted to the Financial Services Authority and seven internal documents were found to contain signatures that had been forged – see Daily Mail 19 January 2012
At the time Direct Line was owned by the Royal Bank of Scotland. It no longer is. One year earlier the Royal Bank of Scotland was fined £2.8 million for “multiple failings” in complaints handling.
As at August 2015 the Government of the United Kingdom held and managed a 73% stake in the Royal Bank of Scotland through UK Financial Investments.
Imagine the consequences for any of the rest of us of altering improperly 27 out of 50 files requested by the Solicitors Regulation Authority and forging signatures. Why is Direct Line Group allowed to have any formal connection with a firm of solicitors?
There is a company called UK Assistance, also part of Direct Line Insurance Group Plc and with the same registered office, and the “appointers” of DLG Legal Services, a firm of solicitors regulated – or perhaps not – by the Solicitors Regulation Authority.
Attached is a letter from UK Assistance to a client of a different firm of solicitors where a Claim Notification Form had already been submitted on the portal on that client’s behalf by that firm. Note the email contact details.
The text reads:-
Road traffic accident on:
I have been instructed by Insurance Company, Peugeot, to contact you regarding this incident. A claim has been submitted in your name for personal injuries and we are required to check the details of the claim submitted before being in a position to proceed further.
UK Assistance provides specialist services to insurers, to assist them with their enquiries into incidents of this type.
Peugeot Insurance has requested that I arrange to meet you to discuss this incident in more detail. I would be grateful if you could telephone me on 07967 650 575 or email me at firstname.lastname@example.org as soon as possible, in order to arrange an appointment.
I shall look forward to hearing from you.
UK Assistance then sent an investigator to the client’s home in the full knowledge that the client had already instructed solicitors to pursue a claim.
How ironic that governments of all parties have abolished legal aid and yet have poured billions of pounds into failed banks to allow them to act in this way against the ordinary decent people of this country who have to pay their taxes to bail out these failed multinational institutions.
Many of you may have a term stronger than ironic in mind.
See also my related blogs as listed below:-