Motor claim - loss of profit

geri1965_2

Not sure if anyone can help me with this, but worth a try!

I am dealing with a claim on behalf of an insurance compnay (I work for loss adjusters).

It's a motor claim and the third party has claimed for loss of profit on the vehicle damaged, which was due to be sold the next day. I have paid this.

Now I have a claim from the driver, who is person who was going to sell the vehicle (salesman) and he is claiming (amongst other things) loss of commission of £100 he would have got for selling the vehicle.

Now - my point is that I have paid the company for the loss of profit, surely his commission would have come out of the profit and therefore I don't need to pay this as I would effectively be paying twice for the same thing?

Any thoughts? I have not come across this before.

raskazz

Yes, I'm with you in the sense that the seller of the car would have paid the middleman the commission.

IMO, how you proceed would depend upon whether the figure given for profit was actually 'profit' - i.e. if it was a true profit it would have been the sale value minus transaction costs including commissions. If the figure was not actually profit but lost revenue then the commission would not be payable separately IMO.

geri1965_2

They had a sale agreed the day before the accident for £1,295. Following the accident it was a total loss and they got £950 back from the insurers so the claim was for the difference.

Hmmm, a tricky one!

raskazz

geri1965 wrote: »

They had a sale agreed the day before the accident for £1,295. Following the accident it was a total loss and they got £950 back from the insurers so the claim was for the difference.

Hmmm, a tricky one!

Ah, so I would argue that the settlement for the extra monies due to the agreed sale should be either be:

£345 to the owner who would then pay the middleman his £100.

Or £245 to the owner and £100 direct to the middleman..

RabbitMad

Not sure I fully understand the situation but here goes (what I think as an armchair lawyer anyway).

Person A owns a car worth £1295 and agrees to sell it to Company B who think they can sell it on at a profit. The sales person from Company B is test driving the car and is involved in an accident. Person A gets £1295, sales person gets nothing as they haven't bought the car and any profits are speculative.

OR

Company B have car and agree to sell to Customer C for £1295. Sales person again involved in accident. Company B gets £1295. Sales person gets nothing, but would have a claim against his employer for the £100 commission as he had "sold" the car for £1295. Without his work they would have only got £900.

Is either of these correct?

geri1965_2

Not really.

Company A have car which they agree to sell to Person B for £1295. Sales person has an accident, Person B no longer wishes to purchase car. Company A get £950 from their insurers, leaving them with a loss of £345.

I pay £345 to Company A.

Driver then says I lost £100 commission, my argument is that his commission would have come out of the £345 I paid to Company A (his employers).

His solicitors are arguing that's incorrect, as both Company A and Driver have had a loss due to the accident, and I should pay both of them.

askakd

the point of insurance is to put you back in the position you would have been in if the accidenet had not happened

if there had been bo accident then Company A would have received £1195 for the car (sale price of £1295 less commission) they have already received £1295 from the insurance company (£950 value + £345 loss of profit) so they should pay the commission

if the insurnce company pay the commission then thay will payout £1395 (£950 value + £345 loss of profit + £100 loss of commission) on a car worth £1295 which is not possible

RabbitMad

Your argument is enitrely correct. Company A agreed to sell the car for £1295 and of that £1295 would have given car sales man £100 commission. Therefore you should only pay company A £245 less any costs they would have incurred selling the car (servicing / valet /filling the tank with petrol etc)
You then pay sales man £100 less tax and NI that he would have had to pay on his commission.

This seems the fairest to me.

However I suspect that Company A want £1295 as that's what the car would have sold for and want to keep that for themselves and are stiffing the car sales man.

geri1965_2

The car sales man is in this case their son!

Anyway - thanks for all the answers, I had a letter in today saying he accepted my offer which was less the £100 he was claiming.

mattymoo

To what address should all the forumites who helped you send their invoices for consultancy fees

Is this likely to be a regular thing, loss adjusters asking us for our help? You really ought to have the resources in house for this kind of thing.