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Published 14 diciembre 2015
The question of whether costs are payable in Portal claims where solicitors are instructed to submit the claims, but settlement is reached directly with the Claimants, was considered by the Court of Appeal in its judgment of 2 December 2015.
Haven Insurance Co Ltd settled six claims directly with clients of Gavin Edmondson Solicitors Ltd after this firm of solicitors had entered conditional fee agreements with them before 31 March 2013, entitling the Claimants and their solicitors to success fees on profit costs which would be payable by the Defendants and their insurers.
Claim Notification Forms were submitted on all six claims and, within days of the claims commencing within the Portal, Haven made offers to the Claimants directly. No medical reports were served and Haven did not make any admissions of liability within the Portal process, the settlements being agreed before the time for a liability decision was reached.
Following the settlement of the claims, which made no provision for the solicitors' costs, the solicitors sought to recover their costs from Haven. The conversations between Haven's employees and the Claimants were found, by the Court, to have been intended to agree a settlement which avoided the need to pay the costs of the solicitors, Haven being well aware of the interest of the firm of solicitors in recovering its costs. The decision in Khans Solicitors v Chifuntwe was considered and the Court concluded that the principle of equity intervention required Haven to pay the solicitors' costs in each case.
While many insurers are moving away from the use of pre-medical offers, the judgment is a reminder of the fact that, when settling claims commenced through the Low Value Protocols, Defendants and their insurers will be required to pay the costs of the solicitors submitting the claims; using pre-med offers and direct negotiations with the Claimants should not be seen as a way to avoid Portal costs.
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