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To disclose, or not to drop: That is the question?

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By Emma Fuller & James Keogh


Published 05 April 2022


County Court appeal provides guidance on disclosure in Part 8 credit hire claims

Akram v Aviva [2021] EW Misc 16 (CC)

The Court considered how an insurer should challenge the quality of evidence produced by a claimant in the portal. The answer, perhaps somewhat surprisingly, was in part that insurers should consider ceasing compliance with the pre-action protocol in order to drop the claim out of the portal so that the claimant is subjected to the rigours of evidential challenge in pursuing a Part 7 claim.


Background to the appeal

The cases (two similar cases were considered together in the same appeal) centred on credit hire charges incurred by taxi drivers. In each case the defendant insurer had properly identified at Stage 2 that the claimants were required to prove why credit hire charges were the appropriate measure of loss, rather than the profits that would have been lost while the claimants’ vehicles were off the road, applying Hussain v EUI [2019] EWHC 2647 (QB).

In each case, the claimants’ solicitors (the same firm) simply produced an email from a paralegal purporting to explain why the claimants needed to hire and why lost profits would not be the appropriate measure of loss. They mainly relied upon a purported risk that they would lose contracts to provide taxi services if they were off the road for a sustained period of time.

The vehicle-related damages could not be agreed, and the cases proceeded to Stage 3 hearings where the defendant’s representatives argued that the claimants’ evidence was insufficient to prove that credit hire charges should be recovered. The district judges in each case disagreed and awarded damages for those charges.


The Appeal

The Appeal sought clarity on the evidential burden/threshold for Part 8 claims and ultimately the action an insurer should take if disclosure requested is not provided by the claimant.

The argument put forward by the appellant was that the claimants should have produced signed witness statements in line with paragraph 7.11 of The Protocol in view of the value of the claim and arguments setting out why credit hire charges were appropriate, and that in the absence of such statements the district judges fell into error in relying on the claimants’ solicitors’ emails

when the matters contained in the email could only as a matter of law be given by way of witness evidence as provided for in The Protocol at paragraph 7.11 which accepts that in certain situations witness statements will be required.

The Appeal was heard by HHJ Jarman QC, whose decision turned on the correct procedural approach to such a challenge. The judge’s decision was that in circumstances where an insurer wants to challenge the quality of the claimant’s evidence presented at Stage 2, the appropriate procedure was to stop complying with the protocol process so that the claim drops out and proceedings can be commenced under Part 7. It is generally not appropriate to make such a challenge through the Stage 3 process.

At paragraph 37 of the Judgment, HHJ Jarman QC states:

“In my judgment, defendants are faced with a choice at Stage 2. Either they proceed as the defendants did in this case, or they choose not to engage further with the protocol and face a Part 7 claim with the risk of increased costs. If they wish to challenge the information such as that set out in the emails in question, then the later course is appropriate.”


The basis of HHJ Jarman QC’s decision that witness statements were not required and the emails were sufficient, was on the basis that the statement of truth in the settlement pack must apply to all evidence relied upon in support, including the emails in question.

The decision is perhaps a surprising one, particularly given the judge accepted the submission that it is generally undesirable to have to remove cases from the portal. One would have thought that is particularly so where (i) the protocol recognises that witness statements will sometimes be required and (ii) there is no explicit mechanism for insurers to remove claims from the portal, beyond simply ceasing to comply or using an alternative means of exit from the portal (e.g. by denying liability) deliberately contrary to this purpose.


Impact on Protocol Claims

It had been generally thought that forcing claims out of the portal would leave insurers open to criticism that they were subverting the portal process, possibly creating risks in terms of sanctions and costs. However, in Akram the appeal court explicitly sanctioned exactly such an approach as really the only way in which insurers can make challenges to the quality of evidence produced by claimants.

Applied carefully and by identifying appropriate cases, the guidance from the case has therefore given insurers an alternative route by which they can safely challenge the right cases, where disclosure/evidence is not provided to satisfy the evidential burden, outside of the protocol process. This will require claimants to comply with the evidential standards and procedures applicable to a Part 7 claim, whilst preserving arguments in relation to costs.

Whilst this appeal focused on credit hire claims brought by taxi drivers, it is possible that it could be extended more widely to other categories of “unusual” claims going through the portal.

The upshot of this decision is that insurers should review their current protocol processes, and how appropriate cases potentially not suitable for the Protocol process are identified, to ensure they are run in the correct manner to preserve their arguments in relation to costs, should disclosure/evidence provided by the claimant not be satisfactory or in line with the insurer’s reasonable request or not be provided at all.

If you require any support in relation to your strategy of dealing with credit hire claims in the MOJ portal, please get in touch with one of our experts below.