What's the difference between a 50:50 and a knock-for-knock claim?

A 50:50 split liability claim divides responsibility equally between two parties, each receiving 50% of their claim's value from the other’s insurer. This method is used when fault is unclear, especially in road accidents, and can vary in proportion (e.g. 75:25).

A knock-for-knock agreement, however, means each insurer covers their own policyholder's losses, regardless of fault, to save time and costs, without determining liability.

This article explores the two methods of settling personal injury claims when both parties share some degree of fault.

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.

For example:

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).

Knock-for-knock agreements

A knock-for-knock agreement is when each party's insurance company covers the losses of their own policyholder, regardless of who was at fault for the accident. This approach allows both insurers to settle claims quickly and efficiently.

When are knock-for-knock agreements used?

These agreements are often used to save insurance companies the time and costs involved in pursuing claims against each other. Importantly, knock-for-knock agreements do not involve determining or establishing liability, simplifying the claims process for all parties involved.

See also:

I don't know who's to blame - can I claim?

I was partly to blame - can I claim?

It was an accident - can I still claim?

My injury was my fault - can I claim?

Can I claim injury compensation if there were no witnesses?

Work accidents Road accidents Public places Medical negligence Other accidents

Author:
Chris Salmon, Director

About the author

Chris Salmon is a co-founder and Director of Quittance Injury Claims. 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.