What is the difference between a 50:50 and a knock-for-knock claim?
Claimants are often confused by the difference between 50:50 split liability and knock-for-knock agreements when making an injury or insurance claim. How are they different?
50:50 split liability agreements
The responsibility for causing an accident is not always clear-cut. When two or more parties are partly responsible for an injury or damage to property, liability can be legally 'split' between the parties.
When two parties accept equal blame for an accident, liability is apportioned on a 50:50 basis. A claim can then be resolved with a 50:50 or split liability agreement where each party will receive 50% of the overall value of their claim from the other party's insurance company.
It may be that one party is considered to be more at fault than the other party, for example, 75:25 or 60:40. However, 50:50 is the term used by solicitors and insurance companies when negotiating a split liability claim.
Split liability is particularly common in road traffic accidents where insurance companies determine that both drivers are equally responsible for a collision and therefore must each accept 50% of the liability. However, split liability can occur in with any type of personal injury claim.
When do insurers offer 50:50 settlements?
When there are no independent witnesses to an accident, the evidence presented is often one party's word against the other's. The cost of prosecuting or defending a legal case in court can be prohibitive for both the defendant and the claimant, so a 50:50 settlement might be proposed by the insurers.
With lower value claims (below £1,000 for injury claims) the cost of court proceedings may outweigh any potential compensation award. In this situation, insurers may suggest a 50:50 settlement.
Is liability always split 50:50?
No. Where it can be proved that an accident was partly the fault of the claimant, damages may be reduced according to how much the court thinks the claimant contributed to their accident or injury. This is known as 'contributory negligence'.
If it is established that the claimant's actions or negligence contributed to the accident, compensation may be reduced in proportionately.
if liability is agreed on a 75:25 basis in favour of the claimant, it means that the defendant accepts 75% liability for the accident and the claimant accepts 25% liability. In this example, the claimant would receive 75% of the overall claim value.
If liability is agreed on a 75:25 basis in favour of the defendant, it means the claimant accepts 75% liability for the accident and the defendant accepts 25% responsibility. In this example, the claimant would receive 25% of the overall value of the claim.
How are split liability settlements paid?
Once a split liability has been agreed upon by both parties, one party may make an offer to settle 'subject to liability.
If an offer of £50,000 is made, and liability has been agreed on a 50:50 basis, the claimant will receive compensation of £25,000 (50% of £50,000).
A knock for knock is when each party's insurance company pays the losses sustained by their own policyholder, regardless of who was responsible for the accident.
When are knock-for-knock agreements used?
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.
The claims process for a road traffic injury will depend on where and how the accident happened. Click the icons below for more information:
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Chris Salmon, Director
About the author
Chris Salmon is a co-founder and Director of Quittance Legal Services. Chris has played key roles in the shaping and scaling of a number of legal services brands and is a regular commentator in the legal press.