Payouts to victims of Paddington rail crash delayed again as insurer reaches £30m limit

Pam Warren, whose face was severely burnt in the Paddington rail disaster, said she was "totally devastated" yesterday at news that there could be more delays in settling insurance claims.

St Paul International Insurance, which has been acting for the rail companies for the four years since the crash, has reached its indemnity limit, believed to be £30m.

It is passing its responsibilities on to another firm. The new company, AIG, has appointed solicitors to handle the claims "from scratch", which means further delay, the victims' support group says. Those injured in the crash, in which 30 people died, say AIG is refusing offers to take claims to mediation and seeking adjournments of hearings scheduled for December, which were intended to settle the level of damages. Solicitors for AIG said they needed more time to prepare to fight the claims, according to survivors.

Ms Warren, who was forced to wear a surgical mask to protect her face after the disaster, has not yet received full compensation. She said: "From the time of the train crash we were assured time and time again that our claims would be dealt with 'sympathetically and quickly'. I feel that the railway industry is reneging on promises made to victims following the accident. My life has been destroyed by their incompetence and this trauma is being made worse by their tactics of delay."

Victor Rae-Reeves, the solicitor for "excess insurers" including AIG, said there should be no reason for any delays and that the company had not refused arbitration. He said most of the claims had now been settled, but in a small number of cases up-to-date medical evidence had been sought. A spokesman for AIG said the company was unable to comment.