Zenith foots £1m bill as part of record personal injury payout

A teenager left almost completely paralysed by a motor accident has won between £12m and £17.5m compensation in the UK’s biggest personal injury payout.

Zenith Insurance is liable for around £1m of the payout, the rest by reinsurance agreements, said underwriting director Gary Humphreys. The reinsurance policy was placed by Aon Benfield.

The claim relates to Chrissie Johnson, now 20, who had a promising sporting and academic career before the car she was travelling in was hit by a lorry in 2006.

The case involved a policy underwritten by Link Insurance in 2006, which later merged with sister company Zenith Insurance. Zenith was acquired by Gibraltar-based Markerstudy in December 2009.

The payout will consist of a £4m lump sum payment and £300,000 a year for the rest of Johnson’s life, index linked to carer earnings. While Johnson’s solicitor, Clare Salmon from Stewart Law, said the payout was likely to top £17.5m, Humphreys said the final figure should be closer to £12m, based on Johnson’s life expectancy. “But that would be at the upper end of expectations," he said.

The retention within Markerstudy Group is £1m and the majority of the award will be covered under Link’s excess of loss reinsurance policy.

Humphreys says the case was already reserved for and reviewed under the due diligence process when Markerstudy Group acquired Zenith Insurance in January.

The award follows the personal injury payout of £13.75m last month in Guernsey for cyclist Manny Helmot. Helmot, 39, was hit by a speeding car in 1998 and now needs permanent care.

Tradex Insurance, which is liable for the payment, has not ruled out launching an appeal.