The difference between a 50:50 and a 'knock for knock' claim

A 50:50 split liability agreement should not be confused with a 'knock for knock' agreement.

When liability is agreed on a 50:50 basis, both parties are accepting 50% blame for the cause of the accident; each receiving 50% of the overall value of their claim from the other side's insurance company. Very few cases are truly 50:50, but it is a term used in negotiation.

In a 'knock for knock' agreement each party's insurance company pays the losses sustained by their own policy holder regardless of who was responsible for the accident.

What does split liability mean?

A claimant pursuing a compensation claim may hold the other party fully responsible for his injuries.

A defendant may reduce compensation below 100% by proving contributory negligence by the claimant.

The term 'split liability agreement' means there is an agreement that the liability (blame) for an accident is split between the parties involved.

Why do insurers offer 50:50 settlements?

When there are no independent witnesses to an accident the evidence presented is one party's word against the other. The cost of a Court case to ascertain blame may be prohibitive to both insurer and claimant so a 50:50 settlement may be suggested by the insurers.

Also, if a case is of low value (where the personal injury claim of below £1,000, or property below £5,000) the cost of Court proceedings may outweigh the compensation payment. In this situation an insurer may suggest a 50:50 settlement.

Is the split liability always apportioned at 50:50?

Where it can be proved that an accident was partly the fault of the claimant, a claim for damages may be reduced according to how much the Court thinks he is responsible for the accident (contributory negligence). This may result in the compensation paid to the claimant being reduced by a percentage.

For example: if liability is agreed on a 75:25 basis in the claimant's favour, it means that the defendant has accepted 75% responsibility for the accident and the claimant has accepted 25% responsibility for the accident. In this case the claimant receives 75% of the overall claim value. If liability is agreed on a 75/25 basis in favour of the defendant, it means he has accepted 25% responsibility for the accident and the claimant has accepted 75% responsibility. The claimant receives 25% of the overall value of the claim from the defendant's insurance company.

How are split liability settlements paid?

Once a split liability agreement has been reached, one party may offer - for example - a payment of £10,000 "subject to liability"

If the offer is accepted and the split liability has been agreed at 50:50 then the claimant will receive 50% of the £10,000 i.e. £5,000.

So what about knock for knock?

Knock for knock may save insurance companies the time and money sending or claiming money back from other insurance companies. It has nothing to do with establishing liability.

It may not exist between insurance companies whose records show that there is disparity between what they may pay out and what they may receive back from other insurers' claims.

Call Quittance on 0800 612 7456 for a no-obligation consultation if you have been injured in an road accident and would like to discuss your options.

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