A personal injury specialist is preparing for a Court of Appeal showdown with an insurer that went behind its back to settle claims.
Gavin Edmondson Solicitors, based in the north-west, alleges that Haven Insurance acted unlawfully on three counts when it made a direct offer of compensation to six clients in 2012. The insurer does not dispute that it has offered settlement to clients knowing that they had instructed solicitors, but denies any unlawful behaviour.
The law firm told the Gazette that Gibraltar-based Haven has operated this way since 2009, meaning that hundreds of claims with other personal injury firms could be reopened if it wins the appeal.
The clients had all been signed on conditional fee agreements (CFAs) and their cases lodged via the Road Traffic Accident portal.
But the insurer then used information in the portal to make direct offers of between £1,900 and £2,350 – effectively ending the clients’ involvement with the law firm.
In August the High Court found there was nothing preventing any direct contact or settlement between the clients and insurer. His Honour Judge Milwyn Jarman QC ruled that CFAs did not prevent any direct contact or settlement and that the insurer acted with explicit consent and for the administration of justice.
Skeleton papers filed at the Court of Appeal earlier this month by Gavin Edmondson allege that Haven staff were ‘individually incentivised’ to get clients to settle directly. The papers allege Haven acted unlawfully by denying the claimant firm costs, inducing a breach of contract and misusing confidential information obtained through the portal.
The papers include partially transcribed recordings of telephone calls with the clients, in which one Haven adviser says the settlement offer will be a bit less ‘because of the fact that solicitors get kept out of it so we don’t have to pay their fees’.
Gavin Edmondson said the High Court’s verdict that claimants need to show proof of ‘collusion’ between clients and insurers set a ‘more or less impossible standard’ and limited action to only the most exceptional cases.
‘There was no consent from any data subject,’ the papers said. ‘Explicit consent is required in the case of sensitive personal data. The defendant thereby acted unlawfully.’
Daniel Higgins, head of costs at Gavin Edmondson, said ‘numerous’ law firms have made contact since August regarding Haven approaching their clients directly. The firm is asking for more to come forward to get a sense of the scale of claims affected.
Haven has until later this month to respond, with the Court of Appeal hearing not expected until the new year. It declined to comment when approached by the Gazette.