Wigg & Co - re: claims direct cases (SCCO 19th July)
Call us on 01892 529518. Experience counts.
These Test Cases were
selected to enable a number of issues of principle to be decided, the
most important of which being the whether the money paid to Claims
Direct Plc by the Claimant in each case was a premium within the meaning
of S.29 of The Access to Justice Act 1999 and, to the extent that it is
such a premium whether or not it was reasonable.
The Claimant's position was that the money paid was all premium and not
susceptible to further breakdown and was both reasonable and
proportionate.
The Defendants argued that the recoverable premium was only the
risk-bearing element, i.e. that part of the money paid which is directly
referable to the amount paid to Underwriters (including appropriate
brokerage and commission).
The Senior Costs Judge Master Hurst held that only a proportion of the
money paid by the Claimant to Claims Direct Plc constituted a premium
recoverable under S.28 of The Access to Justice Act 1999.
The Judge when deciding the premium was looking at costs claims within a
range from £1,033.00 to £3,884.50 an average of £2,097.00 per case.
He then considered the application of a success fee as in Callery -v-
Gray (Nos. 1 and 2 ) (2002) 3 All ER 412 HL. He said that although he
did not suggest either of these figures should be taken as a bench mark
of what is proportionate it gave some indication of the likely level of
additional liability in the test cases had they been funded in that way
and settled at the Pre-Action Protocol stage.
Against premiums claimed at £1,250.00 and £1,495.00 he found that £621.13
inclusive if Insurance Premium Tax was appropriate. He made it clear
that in his view the figure of £621.13 inclusive of IPT was a cap for
what was reasonable, regardless of subsequent increases brought about by
any agreement to pay greater amounts to the underwriters.
A total premium of £621.13 was made up as follows :-
Payment to underwriters £451.55 (£140. brokerage and commission
plus £311.55 risk bearing element)
Claims Direct Commission £110.00
MLSS for insurance services £30.00
IPT on £591.55 £ 29.58
Total £621.13
Our Comment
We suggest that if this figure is appropriate for a claim where the
average costs claims are £2,097.00 this is not an appropriate premium
for costs claimed at a much larger range of costs and off the low radar
screen. (Your comments and opinions are invited).
It was said that where an incident occurs, particularly a minor road
traffic accident causing slight injury and where the liability insurer
had from the outset accepted liability for the occurrence, it will
generally be disproportionate and unreasonable to take out an ATE
Policy. There may, however, be circumstances surrounding the incident,
particularly if there is likely to be a live issue as to causation which
would make it reasonable to take out ATE insurance.
Our Comment
In how many cases does an insurer unequivocally accept liability at the
outset for an occurrence ? More usually the Claimant is left in the air
with a half promise that an offer may be made after full investigations
have taken place. In those circumstances would it be reasonable to take
out ATE insurance ?
TAG Cases Settled
Sharratt v London Central Bus Company & Other Cases SCCO 16 February
2004. Following the mediated outcome TAG Panel Solicitor's costs on
cases that had been held pending the outcome of the test litigation were
to be settled subject to a discount of 25% being applied to
agreed/assessed based costs in the bulk of the cases. This discount did
not apply where the TAG Panel Solicitor himself promptly gave the
requisite advice under regulation 4 of the CFA Regulations 2000. It was
also agreed that the individual Claimants would not be asked to pay the
shortfall in their costs. Other recovery issues remain outstanding.
Because the matter was not litigated the agreement is binding only on
the parties to the litigation although it is likely that Cost Judges
will follow the outcome.
Predictable RTA Success
Fee Agreement
The Bar agreed to the inclusion of Barristers in the agreement on
success fee levels in road traffic accident cases.
1. Standard success fee shall be recoverable in road traffic accidents (RTA)
claims funded by CFAs or CCFAs:
(1) Solicitor's success fees:
(a) 100% in respect of any case which concludes at trial
(b) 12.5% in respect of any case which concludes before trial.
(2) Counsel's success fee:
(a) 100% in respect of any case which concludes at trial
(b)(i) 75% of any multi track case which concludes within 21 days before
trial
(b)(ii) 50% in respect of any fast track case which concludes within 14
days before trial
(c) 12.5% in respect of:
(i) Any multi track case which concludes earlier than 21 days before
trial
(ii) Any fast track case which concludes earlier than 14 days before
trial.
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