Insurers and their lawyers say a new Court of Appeal ruling could put an end to a ‘culture of delay’ aimed at ramping up out-of-time claims.

Lord Justice Coulson ruled in MH Site Maintenance Services Ltd & Anor v Watson that the county court has the power to decide on protective Part 8 claims seeking a stay on proceedings in personal injury matters.

Agreeing with his ruling, Lady Justice Andrews said claimants should not be granted the ‘indulgence’ of extending low value claims using Part 8.

Simon O’Dwyer, of Crown Office Chambers who represented the successful insurer, said the ruling gives defendants a mechanism for force through progression of a case they think has stalled.

‘This decision will provide a clear warning to claimants that the culture of delay and an assumed entitlement to a stay which can be repeatedly renewed without any scrutiny will no longer be tolerated,’ said O’Dwyer. ‘Claimants will need to get on and progress these claims.’

The claimant in Watson had been in an RTA in September 2019 and began the pre-action protocol process in July 2020. The defendant admitted liability and the case progressed to the preparation of a settlement pack, which would include a medical report and other evidence.

But in this case, no settlement pack was forthcoming and the draft medical report was not received until May 2023 – some nine months after the limitation period had expired. But in what insurers suggest is common practice, the claimant’s solicitors issued a Part 8 claim to prevent the defendants from accruing a limitation defence. The claim was stayed for a year, giving more time to present the settlement pack.

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The insurer in Watson sought an order to lift the stay, but District Judge Baldwin said he had no such power to grant the order. A subsequent appeal against that decision was dismissed in the High Court by His Honour Judge Wood KC.

Lord Justice Coulson said this was a ‘significant point of practice/procedure’ and that the court had to deal with the jurisdictional argument. He concluded that the stance taken in the lower courts was ‘erroneous’ and that district judges had the power to take direct control of the process when there were allegations of non-compliance with the protocol. He stressed that this power should be exercised only where there had been a ‘wholesale failure’ to progress the case and where Part 8 proceedings have been commenced.

Lady Justice Andrews added: ‘In the course of the hearing we were told that in practice stays… are often renewed as a matter of course, sometimes more than once, and that some district judges even grant indefinite stays. They should not be doing this. The effect, in practical terms, is to afford a dilatory claimant a longer time to bring proceedings in court than the Limitation Act permits.’

Posting on Linkedin in response to the ruling, Chris Cox, a technical authority holder for Allianz Insurance, said it should be a warning to claimants who try to delay settling a claim.

‘All too often claimant solicitors issue Part 8 claim forms in the portal on the cusp of limitation and then immediately seek a stay,’ he wrote. ‘They then spend months, even years ignoring insurers requests for information and refusing to engage or provide medical evidence. Liverpool, Birkenhead and other courts saying they have no powers to make orders, is absurd.’