Portal costs payable even if solicitors excluded from settlement

Published 19 abril 2018

Following the Court of Appeal's judgment of 2015 (click here), the Supreme Court has considered the question of whether fixed costs are payable in Portal claims where the Defendant's insurer negotiates settlement directly with a Claimant after receiving a CNF, handing down its judgment in Gavin Edmondson Solicitors Limited v Haven Insurance Co Ltd on 18 April 2018.

After considering the contractual arrangements between the Claimants and their solicitors and also the extent of the latter's lien for costs, the judgment of Lord Briggs (with whom Lady Hale, Lord Kerr, Lord Wilson and Lord Sumption agreed) upheld the decision of the Court of Appeal and confirmed that, where a claim is presented through the Portal by a solicitor, the Defendant's insurer may not avoid a liability for costs by negotiating directly with the Claimant. He stated that:

Once a defendant or his insurer is notified that a claimant in an RTA case has retained solicitors under a CFA, and that the solicitors are proceeding under the RTA Protocol, they have the requisite notice and knowledge to make a subsequent payment of settlement monies direct to the claimant unconscionable, as an interference with the solicitor's interest in the fruits of the litigation. The very essence of a CFA is that the solicitor and client have agreed that the solicitor will be entitled to charges if the case is won.  Recovery of those charges from the fruits of the litigation is a central feature of the RTA Protocol.

It is also worth noting that the settlements reached in this case were all the result of acceptance of pre-medical report offers. Clause 4 of the Civil Liability Bill, which is proceeding through Parliament at present, should prohibit pre-medical offers in whiplash claims which will mean that insurers will have to await settlement packs before making offers within the Portal process.