Lawyers acting for former clients of Slater and Gordon have gone to court to ask whether the national firm profited from undisclosed commissions on insurance policies.

The Senior Courts Costs Office today heard submissions for more than two hours on Friday in Piper v Slater & Gordon following a request from the claimant. The request, under Part 18 of the civil procedure rules, was essentially inquiring whether Slater and Gordon received a commission or other financial benefit from after-the-event insurance policies signed as part of retainers with personal injury clients.

The Gazette has previously reported that more than 100 claims have been brought by former Slater and Gordon clients, now represented by costs recovery business, in respect of ATE insurance deductions.

In today’s hearing, Robin Dunne, counsel for the claimant, said there was ‘clear evidence’ that commissions had been paid to Intelligent Claims Management, a business owned by Slater and Gordon. This had been confirmed, it was submitted, by administrators handling the affairs of ATE provider Elite Insurance, which had underwritten the policies in question.

Dunne said there was an ‘obvious concern’ that Slater and Gordon had not disclosed to clients that any commission was being paid to a company linked to itself. The court heard that ICM received what was described by administrators as a ‘claims handling fee’ of £30.

Dunne added: ‘Here, because of the nature of the administrators’ disclosure they gave, there is a serious and significant issue. The question is whether there is a question that needs answering and whether it is proportionate and reasonable to have to answer it.’

He told the court that the facts presented should prevent any argument that the application was a ‘fishing expedition’ and said the court had the power to adjust the cash account of clients.

Dunne suggested that Slater and Gordon had spent £30,000 defending the application, adding: ‘All the claimant wants is essentially some sunlight on these issues and what the defendant seeks to do is spend huge amounts of money seeking to avoid answering a very simple and pertinent question.’

Slater and Gordon has denied any wrongdoing and said it is confident in the quality and terms of its retainers. Addressing the application, defendant counsel Robert Marven said the claimants wanted to allege they were given bad advice but had chosen the wrong jurisdiction and method for doing so. ‘They have started in not only the completely wrong way but the wrong place,’ he said. ‘It is entirely unexplained why they need answers to these submissions.’

Master Rowley reserved judgment following the hearing.