Society of Lloyd's · DRN-6244050

The complaint Mr B has complained about the way his commercial vehicle insurer, Society of Lloyd’s, dealt with a third-party claim which was made on his policy after he was involved in an accident. What happened In November 2022, Mr B was involved in an accident which he said wasn’t his fault. He said the other driver who collided with him were on their phone at the time and also that the incident was captured on CCTV. The third party said Mr B changed lanes and drove into them. Mr B notified Lloyd’s of the accident but he said he didn’t want to claim on his policy as his own damage was minor. When the policy came to renew, Mr B said he was surprised to note the claim was still “open”, something which was impacting his premium. He contacted Lloyd’s and was unhappy because he said it had not taken any action or investigated the claim. Mr B raised three complaints in December 2023 which were addressed in the same month by Lloyd’s underwriting agent. Lloyd’s responses were issued later. It addressed Mr B’s complaints regarding, amongst other things, its failure to obtain the CCTV footage and delays in the claim being closed, in responses issued on 25 January 2024 and 5 June 2024. It offered Mr B £300 compensation in total. A third response was issued in January 2025 regarding further delays in the complaint being resolved. A year after his original complaint, Mr B raised a further complaint with Lloyd’s. He said this was the third renewal where his premiums were impacted by the claim remaining open, and that the £300 offered to him was not enough to compensate him for those price increases. He added that his broker informed him the claim had been changed from “non-fault” to a “fault” claim and was still open. He said this was something he wasn’t informed about nor was he told about the impact on his no claims discount (NCD) which was disallowed. Lloyd’s responded to Mr B’s complaint on 17 January 2025 but didn’t uphold it. It explained that its response related to Mr B’s December 2023 complaint about the claim remaining open, and not to the failure to obtain the CCTV footage, which had been dealt with in its June 2024 response. It said the claim had always been recorded as a “fault” claim because it remained open while investigations were ongoing, and it maintained that the claim status had never been changed. Lloyd’s said liability was still in dispute and that it had proposed a 50/50 settlement, which Mr B didn’t agree to. It also said Mr B’s NCD was disallowed while the claim was ongoing, which it described as standard practice.

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Mr B brought his complaint to our service in January 2025. He said he wanted the claim closed as “non-fault”, together with compensation for the financial loss he had incurred and the distress and inconvenience he experienced. While the complaint was with our service, Lloyd’s offered Mr B £200 as a goodwill gesture and acknowledged that there had been very few attempts to contact the third-party insurer to obtain a liability admission. One of our investigators put this offer to Mr B, but he declined it. Mr B also said that Lloyd’s had recorded a £300 claim cost on CUE (the Claims and Underwriting Exchange), which Lloyd’s accepted was added in error and arranged to have removed. Mr B raised a number of further points which included the fact that he had always protected his NCD and that Lloyd’s had issued him with an NCD certificate when he went to another insurer. So he couldn’t understand how it could disallow his NCD later on. Mr B also questioned what Lloyd’s plan was going forward. The matter was then reviewed by another investigator. He explained that he was only able to consider the issues addressed in Lloyd’s January 2025 final response and not those covered in its January and June 2024 responses. This was because the complaint had been referred to us more than six months after those earlier responses were issued, and Mr B hadn’t told us about any exceptional circumstances that would justify considering those complaints out of time. As a result, our investigator said he could not consider Lloyd’s failure to obtain the CCTV or phone records, or any delays or service issues before the June 2024 final response. But he could consider service issues arising after that date and up to January 2025, when Lloyd’s issued its third final response. Our investigator went on to consider the complaint and said that Lloyd’s should pay Mr B £400 in total for causing delays and adding incorrect information regarding the claim cost on CUE. He also urged Lloyd’s to make an urgent liability decision. Lloyd’s didn’t agree with our investigator’s recommendation. It said that it had, in the meantime, settled the third-party claim in April 2025 and that Mr B ought to have been made aware of this through his broker. It said the claim was, at best, a 50/50 matter given the lack of evidence such as CCTV, dashcam footage or independent witnesses, and that the outcome for Mr B would have been the same whether he was fully or partly at fault. Lloyd’s also said that Mr B’s NCD was correctly disallowed because it had incurred an outlay for the third-party repairs. It explained that, as this complaint concerned events between June 2024 and January 2025, it believed its £200 offer was fair and that there was no evidence liability could have been determined sooner. Lloyd’s added that recording the claim cost as £300 on CUE was unlikely to have impacted Mr B’s premiums. While the complaint was being reconsidered by our investigator, Lloyd’s clarified that it had become aware of the fact that its underwriting agent had originally offered Mr B £250 regarding this complaint in December 2023. So, with the £200 goodwill gesture, this made the total compensation offered for this complaint £450 which it felt was sufficient.

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Our investigator agreed that, overall, £450 was reasonable compensation for the current complaint. Mr B didn’t agree. He said he only found out through our service that Lloyd’s had settled the third-party claim and wanted the liability decision to be decided as part of this complaint. He also asked that the complaint be fully investigated in the wider public interest. Lloyd’s didn’t agree for us to consider the liability complaint as part of this complaint. It said it was looking into that complaint separately. As there was no resolution, the matter was passed to me to decide. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. I appreciate Mr B feels very strongly about his complaint and has raised a number of points for me to consider. I can assure him that I have considered all the points he has raised but in this decision I have focused on the ones I consider to be the most relevant. No discourtesy is intended by this. We aim for our decisions to be as concise and to the point as possible. Scope of this decision In this decision I am considering the issues addressed in Lloyd’s 17 January 2025 final response letter, including how the claim was handled from June 2024 onwards (for example, the “fault” classification, communication and the effect on Mr B’s premiums and NCD). I have issued a separate decision as to why I thought the January and June 2024 final response letters were outside the jurisdiction of this service- because those complaints were brought to us outside the six-month time limit. As I mentioned above, I am aware that Mr B has since raised a further complaint with Lloyd’s regarding its decision to settle liability in favour of the third party. That is a separate complaint which Lloyd’s will need to consider under its own complaints process. If Mr B remains unhappy once Lloyd’s issues its final response, he may be able to bring that matter to our service separately. It does not form part of this complaint. The claim remaining open and the impact on Mr B Lloyd’s accepts that it could have progressed matters more quickly, for example, by chasing the third-party for a liability response more frequently. I agree that Lloyd’s could have been more proactive in trying to resolve the claim. It agrees it made very little contact with the third-party between June 2024 and January 2025, and I think this prolonged the length of the claim. I also note that it wanted to put a 50-50 offer forward to the third party, but as Mr B didn’t agree it said it had no option but to carry on defending liability. As Lloyd’s will be aware it has the right to take over and settle a claim on its insured’s behalf if it is fair and reasonable to do so, depending on the available evidence. I think this is something it could have considered doing during this time in order to bring the matter to a conclusion. Its failure to do so, I think on balance, prolonged the length of the claim.

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Mr B is unhappy the claim remained open for a long time. I should explain that while a claim is still being investigated it remains “open” until liability is resolved. And while it is open it is also recorded as a “fault” claim. This doesn’t necessarily mean that the insured was at fault for the accident but it reflects the fact that it is yet to be determined whether the insurer will incur an outlay or not. And if it incurs an outlay it isn’t able to recover in full, then the claim is recorded as a “fault” claim- because the insurer has not been able to make a full recovery. In this case the claim remained open while liability was outstanding. I think this is normal practice and for the same reason I think it was standard practice for Lloyd’s to record it as a “fault” claim while it was open. I agree that having an open/fault claim will have, most likely, impacted Mr B’s premium. This isn’t unusual and it reflects the risk an insurer is taking on. So I don’t think Lloyd’s acted inappropriately in leaving the claim open and therefore a “fault” claim while liability was outstanding. But, as I said above, I think it could have acted more quickly to try to resolve the claim. Mr B said the claim was initially recorded as “non-fault” and then changed to a “fault” claim. Lloyd’s said it had always been recorded as a “fault” claim while it remained open. I haven’t seen evidence that the claim status was changed, but even if it had first been recorded as “non-fault”, I think it would have been in error. And I don’t think this would have caused any detriment to Mr B. I think the impact of having a “non-fault” rather than a “fault” claim on his record would, in any event, most likely have been more positive for Mr B or unlikely to have caused any significant negative impact. Mr B said his NCD had been recorded as “disallowed” on CUE, something he wasn’t aware of. Lloyd’s said this is standard practice while a claim remains open and that it would have been for Mr B’s broker to inform him. I agree this is standard practice, but the fact that Mr B only became aware of it later is another example of Lloyd’s communication failures. In any event, this is how a “fault” claim is recorded on the database. Mr B said Lloyd’s provided him with an NCD certificate when he left. From what I can see, Mr B had protected his NCD, so this incident may not have affected his number of years’ NCD, although this would depend on whether he had made other claims within the relevant period and on the terms of the policy. But the NCD certificate is different from what is recorded on CUE. “NCD disallowed” is effectively the same as recording the claim as a “fault” claim and does not invalidate the certificate itself. Lloyd’s also accepts that it erroneously recorded the £300 it previously offered to Mr B as a claim cost on CUE. It has since removed this. I think this is fair and reasonable and I don’t think this should have ever been recorded. Lloyd’s said it is unlikely to have impacted Mr B’s premiums in any event and on balance, especially due to the low amount involved, I think this is most likely correct. But I accept it is something that would have caused Mr B concern. Overall, I don’t think Lloyd’s was proactive in resolving this claim. It accepts it didn’t contact the third-party as often as it should have in order to bring about a speedier resolution. It also accepts that it made an error with the amount recorded on CUE. And I also think its communication was often poor, for example it didn’t provide Mr B with frequent updates which is something it also accepts. For the period I am considering in this decision—June 2024 to January 2025—I think the £450 offered is fair and reasonable and in line with awards we make in similar circumstances.

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My final decision For the reasons above I have decided to uphold this complaint. Society of Lloyd’s must pay Mr B £450 compensation for the distress and inconvenience it caused him if it hasn’t already. If it has paid part of this it must now pay the balance. This award does not include the £300 previously awarded with regards to previous complaints. Society of Lloyd’s must pay the compensation within 28 days of the date on which we tell it Mr B accepts my final decision. If it pays later than this it must also pay interest on it from the deadline date for settlement to the date of payment at 8% a year simple. If Society of Lloyd’s considers that it’s required by HM Revenue & Customs to deduct income tax from that interest, it should tell Mr B how much it’s taken off. It should also give Mr B a tax deduction certificate if he asks for one so he can reclaim the tax from HM Revenue & Customs if appropriate. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr B to accept or reject my decision before 20 April 2026. Anastasia Serdari Ombudsman

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