Nearly 550,000 people have visited the endowment section of its website where a draft complaint letter is available for download. It said that more than 45,000 letters have been written using its draft.Insurers are having to boost their reserves and hundreds of staff are being recruited to deal with customer enquiries. But compensation is largely paid from policyholder funds, meaning policyholders are paying to compensate themselves."The number of complaints is just the tip of the iceberg," a spokeswoman for the CA said yesterday. "Insurers should not be allowed to pay compensation from policyholder funds."With the number of mortgage endowment complaints rocketing, claims companies are now trying to cash in on the thousands of people that are learning the policy they bought is not worth enough to pay off the mortgage it was intended to cover. Policyholders are now being cold-called by salespeople from claims companies with the promise of better compensation awards in the courts.There are reports that these companies, which operate through a complex web of sub-contracted agencies, are even knocking on doors to hunt out disgruntled policyholders.Endowment Refund, a Cardiff-based company that offers to pursue compensation claims for endowments that are in shortfall, plans to launch a call centre next month to kickstart a nationwide drive to cold-call potential litigants. It says it has the details of 1,500 people that have a possible claim, but wants to get more leads.The FOS and the CA have serious concerns about paying third parties to pursue a complaint.
The Law Society has also advised endowment policyholders not to use claims companies that promise to be free of charge and the National Solicitors' Network has already rejected one proposal for a system of passing cases on to solicitors through it.The no-win, no-fee business model is used in the personal-injury market, but it can come unstuck. Claims Direct collapsed last year and The Accident Group has also been put in to administration.. "Fears that Britain risked future power cuts at times of peak demand rose after the North American blackout in mid-August. Powergen was quick to suggest that power prices would have to rise to meet the cost of updating Britain's distribution system.
But neither the distribution network nor generating capacity looks vulnerable..." So wrote The Economist in a spectacularly ill timed editorial yesterday, its deadlines presumably too early to take account of the transport chaos that occurred in London on Thursday night after power cuts which seemed eerily reminiscent of the ones that afflicted New York earlier this month There but for the grace of god go all us scribblers. There but for the grace of god go all us scribblers. Yet even discounting the unfortunate timing, the sentiment is completely wrong. It may be just coincidence, but the same company, our very own National Grid Transco, was involved in both cases. Blame has not yet been established for the New York black out, yet National Grid's ageing North American infrastructure was very much at the centre of events. National Grid's chairman, Roger Urwin, insists there is no parallel whatsoever between the two blackouts, whose causes, duration and scale he thinks worlds apart.On the other hand, the effect was much the same, paralysing two of the greatest cities in the world. And the idea that it couldn't happen here, much trumpeted by National Grid, The Economist, the Government, uncle Tom Cobleigh and all in the aftermath of the North American debacle, has been well and truly trashed.Mr Urwin is certainly right to suggest that technically the set of events and faults that led to the power going down in New York couldn't be more different than London Yet on a general level, the two episodes were quite similar.
The function of an electricity transmission system is at all times to ensure that demand is matched by supply. When the two get out of sync the system cannot cope and shuts down.The grid is therefore chock full of fail safe mechanisms to ensure this doesn't happen. Localised power disruption is an everyday occurrence in any big transmission system, say because a tree branch touches a cable, or because a workman unintentionally severs one. When this occurs, the system automatically isolates the problem, shuts down the immediate locality, bypasses it and if necessary adjusts supply to take account of any lost demand.In the North American power cuts, there were multiple failures causing large parts of the network to be closed down in an uncontrolled cascade, which in turn left too much power feeding the remaining, active system. As a result, generating capacity had to be shut down too so that when the transmission problem was corrected there was insufficient supply to meet demand.What happened in London is not so dissimilar. Three sub-stations went down at the same time, taking out one fifth of demand and causing the network radically to reduce its calls on supply. National Grid was able to address the problem much more swiftly than occurred during the eastern seaboard blackouts in North America, but not before large parts of London including the underground system had lost all power.
