Home / Insight / Don’t be in such a hurry – A cautionary tale!

Don’t be in such a hurry – A cautionary tale!

15/07/2020

‘Discussion and negotiation, with litigation as a last resort’, is a fundamental tenet enshrined in the CPR and drummed into me right from the start of my career some 30 years ago. It remains as fundamental now as it did then. Sadly, it is a direction often ignored by some claimant solicitors. The rush to issue proceedings carries with it a risk that such proceedings will be considered to be premature, but with a potential great ‘prize’ by way of higher profit costs.

The premature issue of proceedings is often a problem in lower value cases. It can be difficult and costly for a defendant to argue. It may be perceived that the defendant is in a position where they feel morally right, and yet still not have the support of the court. All too often, claimant lawyers rely on a presumption that the insurer will take a view that the balance of economics and risk will result in a commercial stance being taken and these cases paid.

In spite of a perceived uneven playing field, it is possible to successfully challenge these cases.

I recently concluded an interesting case where the defendant was involved in a road traffic accident with a coach with 44 passengers on board. The claimant solicitor was instructed for 21 of these passengers. CNFs were submitted; however, none of these 21 people could provide any evidence to support their presence in the coach (coach tickets, proof of payment, social media etc.).

Mindful of the potential for fraud, the defendant insurer requested a simple signed statement of truth from each, indicating how they paid for their ticket, where they were seated on the coach, and who they were seated with. Across the board the claimant solicitor refused to provide a statement for any of their 21 clients prior to proceedings being issued.

Medical evidence was supplied, indicating that these were all low value whiplash type claims. The defendant insurer provided a valuation for each. The claimant solicitor again refused to provide the previously requested statement of truth. Proceedings were issued for several linked claimants.

Three of the strongest cases were chosen to defend. A defence was filed, robustly detailing the allegation of premature issue. Thereafter the claimant provided the requested statement of truth. Settlement was agreed for damages within weeks, at a figure only slightly over the valuation provided by the insurer.

Settlement was achieved by way of a Calderbank offer. A consent order was filed detailing the agreement and giving the parties the opportunity to contest the costs. The court took the unusual step of simply listing the matter for a hearing, setting a deadline for the claimant to serve details of their costs. 

The claimant failed to serve details of their costs within the deadline. Having noted the breach, the claimant sought a retrospective extension from the defendant. The defendant considered that given the extent of the delay, and that the hearing date would now be in jeopardy, they could not agree such an extension, inviting the claimant to make an application to the court. The claimant, however, chose simply to serve their bill of costs out of time. In view of the claimant’s delay, points of dispute were required the day before the hearing. A strong set of points were filed detailing the premature issue of proceedings.

The defendant considered that to note the clear breach of an order of the court, and then fail to rectify it, was unacceptable. Aiming high, the defendant made an application to strike out the claimant’s bill of costs under CPR Part 44.11 for misconduct. The matter was strongly argued by one of Keoghs’ internal advocates Benjamin Rigby-Beckett, who argued that it is not acceptable to knowingly breach a court order, and take no steps to rectify this. The court agreed; however, it stopped short of striking out the bill. A 25% reduction to the claimant’s costs was ordered as a sanction. The defendant was awarded their cost of the application.

This marked the turning point in the claimant’s attitude. Faced with a resolute defendant, mounting costs, and a court indicating a willingness to impose sanctions, the claimant made a Part 36 offer of roughly half of their costs. The defendant once again had to consider the risk and economics of proceeding to a further hearing. Discussions resulted in the claimant eventually accepting roughly one third of their costs. After deducting the interim payments made for pre-issue fixed costs, and the defendant’s application costs, the claimant was required to make a payment to the defendant of £476.00 due to interim payments made. The claimant ultimately recovered less than the pre-issue fixed costs they would have been entitled to have the matter settled pre-proceedings or if they had accepted the defendant’s arguments from the outset.

Due to the robust stance taken in this matter and the challenges made to the cases being issued prematurely, the majority of the remaining cases have now settled without litigation.

This was a very successful result for the defendant highlighting the benefits of a joined-up team approach between Keoghs, our clients, internal teams and in-house advocates. In doing so we achieve excellent results for our client and change claimant behaviours. 

For more information, please contact Helen Dale.

 

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Helen Dale

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