Claiming compensation - reasonable payout?

dp313

First of all I'm asking this question on behalf of a friend who is not totally computer literate so will have to relay information, apologies...

A good few months back he was involved in a head on collision with a young driver, the young driver drifted over to his side of the road and caused both cars to be wrote off.

He initially denied responsibility but I believe due to a mixture of evidence and police involvement he accepted (or his insurance may have forced him to accept) responsibility.

The accident resulted in a broken rib and 3 months off work - this was costly as he is a self employed roofer and general handyman!

A couple of days ago he received an offer of just over 2.2k compensation + £100 in loss of earnings(...its this part that rang alarm bells.)

If anybody either with previous experience or industry knowledge advise wether this is reasonable, He will be most greatful

Many thanks in advance,

P.S - My own dad had a small bump a few years back which resulted in a minor bump to the car and a couple of weeks of neck ache and a couple of hours at the doctors - they immediately settled with him at 2.4k so this seems disproportionate to me?

mattymoo

Compensation damages are split in to two parts.

General Damages - this covers the pain and suffering caused by the accident. Their £ note value is based on previous cases with similar injury levels. Your friend's solicitor (I'm assuming he has one) will know if £2,200 is reasonable for his type of injury.

Special Damages - these are capable of financial quantification. They would include any policy excess (that would have been deducted from the write off value of his car), lost earnings, incidental expenses, medical bills etc. When I say they can be quantified, I mean by producing evidence such as wage slips, accounts, receipts etc.

Loss of earnings for self employed people would normally be via a report from their accountant. It would normally show the trading history up to the date of accident (usually 12 months) followed by the period after. The history will show business trends, e.g. a growing business or a declining business. The loss is then proven as the difference between the two, adjusting for differing periods and business trends.
£100 certainly seems light for any business. Most roofers I know wouldn't even work 1 day for £100.

He needs to go back to his solicitor and see why the offer is so low, and what if any evidence he needs to produce to back up the cost of the true loss.

TheRedAdmiral

I agree with Mattymoo.

The current (9th Edition) of the JSB Guidelines state that:

(g) Fractures of ribs causing pain and disability over a few weeks only

Up to £2500

Without knowing the extent of the injury (and how long you have had it) it is difficult to know whether the offer for General Damages is reasonable or not - and your solicitor should advise you.

In respect to the Loss of Earnings £100 does appear low.

In respect to Self-Employed people most insurers usually ask for the last 2 (possibly 3) years Inland Revenue Returns together with an indication as to how much you believe that you have lost.

Hope this helps a little anyway

dp313

TheRedAdmiral wrote: »

In respect to the Loss of Earnings £100 does appear low.

In respect to Self-Employed people most insurers usually ask for the last 2 (possibly 3) years Inland Revenue Returns together with an indication as to how much you believe that you have lost.

Hope this helps a little anyway

Thanks to both of you for your input, its much appreciated and i will forward your thoughts.

Regarding the loss of earnings £100 is way off the mark to what he would have potentially earnt - it would be more like 2-3k but would that be an unreasonable amount to claim? or should he be looking for a percentage of that?

Obviously I appreciate these are questions that should be answered by his solicitors but I just dont think they are giving him a good service - I will use your input so far and see what response the solicitor gives him, and try and make sense of only claiming £100 in lost earnings

cheers

mattymoo

It would be the full loss of earnings he would claim for, less any benefits received from DWP. These would be repaid by the insurer to DWP.

dacouch

Does he actually have books / pay tax ?

Quote

One broken rib and three months off work?

dp313

Quote wrote: »

One broken rib and three months off work?

Correct - its quite demanding work and a broken rib takes a while to repair fully.

Why should he return to work unnecessarily early and risk further injury carrying heavy materials around a building site?

this was Doctors orders

dp313

dacouch wrote: »

Does he actually have books / pay tax ?

Yes lol

he has since found that the £100 was a clerical error and his full loss of earnings are being prepared/calculated or what ever they have to do!

thanks

foggytown

mattymoo wrote: »

It would be the full loss of earnings he would claim for, less any benefits received from DWP. These would be repaid by the insurer to DWP.

What is the situation regarding taxes? Would a settlement be on a net or gross earnings basis?

mattymoo

foggytown wrote: »

What is the situation regarding taxes? Would a settlement be on a net or gross earnings basis?

Tax and NI would be deducted.
Expenses not incurred can also be deducted. So for a roofer receiving payments of say £5000 a month, you could deduct vehicle running costs, phone costs, etc, tax, NI and benefits received to arrive at the net loss.
The benefits are then repaid to DWP by the insurer via the Compensation Recovery Unit.