The Court of Appeal has allowed an appeal from a personal injury firm that argued that an insurer went behind its back to settle claims.
North-west firm Gavin Edmondson said Haven Insurance acted unlawfully in making direct offers to clients in 2012. The law firm lost in the High Court last November but yesterday successfully appealed that decision.
The appeal court said Haven was required to pay Edmondson in each case the sums payable on settlement under the protocol scheme into which the claims had been entered.
Lord Justice Lloyd Jones said the fact that an offer may have been made at a time when a retainer was still cancellable or otherwise terminable could not relieve Haven of liability.
In each case, Haven, with knowledge of the existence of a conditional fee agreement and that the claim was proceeding within the claims protocol scheme, made an offer of settlement with no express limitation as to the period within which it could be accepted.
‘It would have been open to Haven to make the offer conditional on cancellation of Edmondson’s retainer within the permitted period but it did not do so,’ said Lloyd Jones.
The judge said while Edmondson had no right to recover fees from its clients, he considered that in the normal course of events the firm would have an entitlement to recover the fixed costs and other sums payable under the protocol scheme.
Costs lawyer Gordon Exall said the result would make the value of insurers contacting claimants directly ‘very doubtful’.
In his blog on the case, Exall said: ‘When an insurer is notified of a claim under the portal and subsequently resolves the matter directly with the claimant the insurer remained liable to pay the claimant’s solicitors standard costs under the portal.’
Haven has indicated that it intends to appeal the decision in the Supreme Court.