Keoghs Insight

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Litigation article and the MoJ Portal Highlighted case

AWARE08/07/2019
PI Aware - July 2019

This case, handled by Keoghs partner Martin McAleer and Zurich, provides a clear example of the potential impact of the issues described in the article:

CHRONOLOGY & BACKGROUND

  • 10 September 2010:Parties involved in a RTA
  • 26 October 2010: Claims Notification Form (CNF) issued
  • 17 May 2012: Claimant intimates intention to instruct orthopaedic surgeon
  • 18 August 2013: Claim Form issued; no medical evidence provided
  • 2 September 2013: Claim stayed pursuant to PD 8B 16.2 (2) (b)
  • September 2013 – January 2015: Keoghs/Zurich chase for update c. 17 times without success
  • 7 January 2015: Claimant serves orthopaedic report from Mr Chugtai, dated 15 July 2014
  • 7 January 2015 - 1 March 2018: Keoghs/Zurich chase the claimant repeatedly
  • 5 April 2018: Claimant serves psychological report from Dr Payne, dated 25 August 2017
  • 4 July 2018: Keoghs invite the claimant to issue an application to lift the stay and move to Part 7 and put the claimant on notice of the defendant’s intention of making a cross application to strike out in accordance with Lyle v Allianz A00CH865
  • 2 October 2018: Defendant applies to strike claim out
  • 22 February 2019: Claimant cross-applies to lift the stay
  • 26 February 2019: Claim struck out

The claimant was a prison officer at the time of the accident.  He had not worked, apparently due to accident related reasons though this was never made precisely clear, since January 2013.  There was said to be an acute psychiatric history which the claimant argued compounded difficulties obtaining instructions.  The reserve was set at £400,000 though in light of flimsy evidence and obvious causation issues this could never be truly accurate.

Procedural framework

The court declined to lift a general stay that had been imposed on a claim following the issue of protective proceedings by the claimant in accordance with paragraph 16 of Practice Direction 8B. Having said that, it brought finality to the litigation by striking out the claim.

Practice Direction 8B is concerned with claims where the parties have followed the relevant Protocol (here the RTA Protocol), but are unable to agree damages before limitation expires.

Paragraphs 16 and 17 set out a code relating to limitation. Where compliance with the Protocol is not possible before limitation expires, a claimant can start proceedings under CPR Part 8 stating the stay is required in order to comply with the Protocol. There are obvious costs benefits to the defendant in enabling such claims to continue, as it removes the need for the claim to exit the Protocol and Part 7 proceedings to be issued.  However, the claimant must actually comply with the protocol.

The procedure works well in situations where both parties are committed to dealing with the claim within the Protocol to conclusion. It provides a streamlined system in which low value claims can be resolved without incurring the oversight and demands of the court and the CPR generally. For this reason, it is suitable only for low value claims for which such oversight is disproportionate. Unfortunately, as the related article illustrates, it can become a refuge for inefficient claimant solicitors who fail to value the claim or progress it properly. Furthermore, some claimant firms seek to hide the true nature of a higher value claim, which would require the oversight of the court, and thus must be identified early, and taken out of the Portal.  In this case the claimant solicitors could and should have identified value much earlier and made every effort to remove it from the Portal.  No such effort was ever made until the day before the defendant’s application to strike out.

The hearing

Before DJ Richmond in Manchester, it was determined that the potential value of the claim had arguably exceeded £10,000 (the applicable Portal limit) since the date of the orthopaedic report at just under four years post-accident. Ironically the defendant argued the value of the claim was significant and the claimant argued it was of modest value or there had been no way of knowing with any certainty.  Since that time, the claimant’s solicitors had failed to comply with the duty identified by HHJ Pearce in Lyle to carry out regular reviews of the value of the claim and failed to progress the claim. The claimant had served no Stage 2 Settlement Pack, no medical records and no evidence of pecuniary losses. The defendant could not be criticised for making no offers in the circumstances.  In fact, the defendant made every effort to illicit evidence to try to facilitate negotiations.  In this particular case the inactivity on the part of the claimant was staggering. 

Medical evidence from Dr Payne had been obtained without input from the defendant. The passage of time had grossly prejudiced the defendant’s ability to obtain meaningful medical evidence and had in fact exacerbated the claimant’s condition. In the circumstances, the parties could not be put on an equal footing and the case could not be dealt with expeditiously or continued fairly. Accordingly, the right order was to strike the claim out.

Practice Points

There is no doubt that claimant solicitors are still, tactically, seeking to hide behind the Personal Injury Low Value Protocol to build significant claims intended to ambush insurers. This is why it is so essential that the steps suggested in the preceding article are followed. This case illustrates that applications to strike out stays or opposing the lifting of stays are more likely to succeed where the process we have suggested is followed. 

Additionally the court will clearly also be concerned with:

  • Whether the process of valuation itself had been compromised by this conduct leaving the parties on an unequal footing
  • Lack of engagement by the claimants and,
  • A disregard for the overriding objective