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The statement 'The case, in which the Law Society has intervened, is worth potentially millions to insurance firms who have sought to capture claims before they enter the pre-action protocol and resulting costs burdens.' is factually wrong. This case is not about preventing insurers from intervening where no solicitor exists; this being prior to entering the pre-action protocol. Therefore the outcome of this case is unlikely to change the insurer from speaking directly to a third party before the claimant has sought legal advice. If the reforms play out as the industry and government want then this behaviour is only going to increase; a case of having to.
Instead this case is about the legitimacy of whether an insurer, post MOJ CNF submission, has the right to settle directly, with a client, the damages whilst the solicitor is appointed.
It should be noted that this case pre-dates the banning of CFA and success fees albeit claimants can be bound by a DBA instead.
The fundamental issue to decide is whether the solicitor’s privilege exceeds the claimant’s freedom.
But for a solicitor and the MOJ portal the information may not have been so easily available so the insurer has had an easier time in speaking with the claimant. However the claimant chose to settle directly with the insurer. It seems clear the decision is also whether an insurer has the right, morally or not, to ‘poach’ data supplied in good faith by a solicitor via a pre-action protocol, directive and use this to their and the claimant’s advantage. With no settlements being directed to the solicitor then any DBA would be difficult to secure and of course the legal firm get no costs for their trouble. This is where the claimant has the advantage. Insurers, as mentioned in the article, pay no costs so save money too.
Whilst any success will be seen as a victory (and a disappointment) surely claimant solicitors will irrespective of any final judgement ensure an agreement sits in place at the point of instruction directing that all damages are made payable to them. Any attempt to deal with a party directly will be in breach of that agreement. We’re then in the realms of the Khans Solicitors (a firm) v Chifuntwe [2013] EWCA Civ 481; [2014] 1WLR 1185 case.