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Glossary
of Terms
Claimant - This is the person on whose
behalf the claim is brought for compensation. If you like, the innocent
victim, they can be the driver or passenger.
Third Party - This is the party who it
is considered to be at fault for causing the accident. There may be more
than one potential third party in certain accidents where there has been
a multiple collision between vehicles. The Claimant's claim would be intimated
against the third party and also the third party's motor insurance company.
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Third Party Insurers - They are the motor
vehicle insurers who have issued the policy of insurance covering the
third parties motor vehicle. In a successful claim it will ultimately
be the third party's insurance company that will be responsible for payment
of damages and legal costs awarded to the Claimant.
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Liability - To bring a successful claim
the Claimant has to establish that the accident was caused by the negligent
driving of another motorist, the third party, that is known as establishing
liability.
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Comprehensive Insurance - This is the
more expensive form of insurance that one can take out to cover a motor
vehicle. It means that in the event of an accident the vehicle's insurers
will initially meet not only any third party claims brought against the
policy holder for damage caused to others but also would cover the cost
of repairing or replacement of the policyholder's motor vehicle and any
associated storage or recovery charges from the scene of the accident
irrespective of whether or not the accident was caused wholly or partially
by their policyholder.
Third party Insurance - This is one of
the most common form of cheaper motor insurance. It covers the motorist
for claims that may be brought against them following an accident but
unlike a comprehensive policy, the insurers will not be responsible for
payment for the repairs of the replacement of the policyholder's motor
vehicle or any associated expenses such as recovery and storage charges.
Those extra costs must either be borne by the policyholder or ultimately
recovered in any claim brought against the third party.
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Insurance policy excess - This is often
referred to just as "excess". On a comprehensive policy of motor
insurance there is usually an excess applied against any claim brought
by the policyholder against the policy. It usually goes up in multiples
of £50, £100, £150 etc. If a claim is made for repairs
to the motor vehicle under the policy or for replacement of the vehicle
the insurance company will deduct from any payment made the policy excess.
The Claimant will be responsible if the vehicle is repaired for paying
the policy excess direct to the repairing garage. However in a claim brought
against a third party the excess would be included as an additional item
of claim to be recovered from the third party's insurers.
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No win no fee - This is the term used
to describe a scheme by which a claim for compensation is funded by your
Solicitor. The client will be asked to enter into a Conditional Fee Agreement
(CFA). Under this agreement, the solicitor agrees that if the Claimant's
claim fails and no compensation is recovered then the client will owe
no legal fees to their solicitors. If the claim is successful then usually
legal fees and disbursements and a success fee incurred on behalf of the
Claimant client will be recovered from the third party's insurers.
Under this scheme of funding the claim the Claimant client may be held
liable for costs if they breach the terms of the CFA agreement. On the
basis that they failed to give their solicitors proper instructions when
requested to do so, failed to accept the proper advice given by the solicitor
or the claim is found to have been fraudulently based.
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Conditional Fee Agreement (CFA) - This
is the legal contract between the solicitor and the Claimant client whereby
the solicitor can act for that client on a "no win no fee" basis.
It sets out the terms and conditions by which the solicitor agrees to
act for the Claimant client, the solicitor's obligations to the client
and the client's obligations to the solicitor. It also sets out the basis
upon which the solicitors fees will be calculated and also whether or
not an after the event third party legal costs insurance policy is to
be used in the event that the claim is lost and legal costs are awarded
against the Claimant.
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Legal Expense Insurance (LEI) - Many
people now have the benefit of a pre-paid legal expenses policy. It is
usually taken out at the time that the client's motor insurance policy
is taken out or the client may have a similar policy in force via their
credit card or household insurance policy. In the event that the Claimant
has reasonable prospects of pursuing a successful claim against the third
party following an accident that policy of insurance will provide insurance
cover for the legal costs and expenses incurred in pursuing that claim.
The policy usually provides an additional cover to the policyholder in
respect of any liability for the opponents legal costs should the claim
prove unsuccessful.
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After the event Insurance (ATE) - This
is a policy of insurance, which can be obtained following an accident
where the Claimant believes that they have reasonable prospects of bringing
a successful claim against a third party. It is usually taken out if a
CFA agreement is used. Under the CFA agreement the Claimant's solicitors
agree to work on a no win no fee basis but if it becomes necessary to
issue Court proceedings to progress the Claimant's claim against the third
party, and that claim is ultimately unsuccessful there may be an award
for legal costs against the Claimant. In that situation the ATE policy
would cover those costs and usually any disbursements incurred on the
Claimant's behalf by their solicitors in pursuing the claim.
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Replacement Vehicle Hire - Following
an accident the Claimant may need a replacement vehicle because their
own has been rendered undriveable following the accident or is under repair
at a garage. Some policies of motor insurance will provide for the provision
of a courtesy vehicle for a few days after the accident pending repairs
being carried out. Alternatively the policy may require the repairing
garage to provide a courtesy car for the duration of the repairs.
If the Claimant's policy of insurance does not provide this cover then
it may be possible for arrangements to be made for the Claimant to be
provided with a replacement vehicle on hire for a limited period of time
following the accident. They will initially be personally responsible
for the hire charges incurred but they will not be asked to discharge
the hire account when the vehicle is returned. The hire contract will
usually provide for payment to be deferred usually for a period of no
more than 12 months in which time the claim would be pursued against the
third party to recover compensation which will include the claim for the
replacement vehicle hire charges.
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Damages - This is the term used to describe
the various elements that make up the compensation claim on behalf of
the Claimant. It includes compensation for their injuries, loss of earnings
and any other out of pocket expenses which may have been incurred as a
result of the accident.
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Motor Insurers Bureau (MIB)- The insurance
industry has established a Body known as the MIB who are responsible for
administering two schemes for compensating victims of non-fault accidents.
The first scheme is known as the "Uninsured" agreement. This
ensures that an innocent victim of an accident caused by an uninsured
motorist will receive compensation from a nominated insurance company
appointed by the MIB. There is £350 deductible excess from any claim
for financial losses incurred.
The second scheme, the "Untraced" agreement provides a scheme
whereby an innocent victim of an accident caused by a third party motorist
who remains untraced following the accident will receive compensation.
However this scheme is limited and only provides for payment of compensation
for personal injuries sustained and associated loss of earnings caused
by the injuries suffered by the victim and certain medical expenses. It
does not provide compensation for any damage to property or vehicle.
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