Keoghs Insight

Author

Kaveh Rashid

Abuse of process in the portal

Client Alerts28/01/2021

If credit hire is not brought within stage 2 of the RTA Portal and that portal claim settles, is it an abuse of process for the claimant to subsequently issue proceedings for the credit hire claim?

Abuse of Process

An abuse of process can take many forms but the specific abuse in question here is the litigation of a claim that has already been compromised. The judgment of Henderson v Henderson is the core guidance citing that the claimant is in effect seeking to recover costs for the same issues twice, or the same set of facts giving rise to the issues twice, and should not be permitted to do so.

Two judgments since Henderson have sought to apply mitigating circumstances to what could be, in some cases, a draconian decision to strike out a claim. Johnson v Gore & Wood confirmed the court must take a broad merits based approach and consider all the facts of the case when assessing if an abuse (as per Henderson) has occurred, whilst Cable v Liverpool Victoria asks whether an automatic strike out on the finding of an abuse is the correct decision.

Hillier

In Lewis Hillier v Southern Rock Insurance Company Limited the defendant thought that a compromise in the RTA Portal where no credit hire claim was brought at Stage 2 was an abuse and applied to strike out the separate credit hire proceedings. DDJ Sheddon agreed on the grounds that the Stage 2 pack said ‘no’ to a hire claim, that a compromise was reached in respect of the whole claim at Stage 2, and that payment of damages was made (and banked) on a full and final basis. The proceedings for the credit hire claim were struck out due to the whole claim having been settled in the RTA portal. The decision was upheld on appeal and permission to take it to the Court of Appeal refused.

Based on this, some insurers may be proceeding to dispute credit hire claims that were not brought at Stage 2 of the RTA portal as an abuse of process.

Recent Developments

This issue has been brought to appeal on a further three separate occasions to our knowledge. One was ruled in favour of the credit hire company with the other two being settled by the defendant with costs.

Poku v Abedin [2020] is an appeal before HHJ Backhouse with similar circumstances to Hillier. No claim for credit hire was brought at Stage 2, the claimant had selected ‘no’ within the credit hire part of the table,the claim was settled and then separate Part 7 proceedings were issued for the credit hire claim. However HHJ Backhouse disagreed it was an abuse and distinguished the case from that in Hillier for the following reasons:

In Hillier on 31 January 2018, the credit hire company sent their payment pack to the defendant insurer. On 8 February 2018 the claimant served the Stage 2 pack stating no credit hire claim. The claim was settled with payment being sent as full and final, and that payment was banked. In Poku however, the defendant insurer and credit hire company were in communications with each other over the credit hire claim a long time before the Stage 2 pack was served. There had been an offer for intervention and also a request for information regarding the credit hire claim and a response to that request. For all intents and purposes the parties were in negotiation and review. HHJ Backhouse believed that the defendant must have known that the ‘no’ for credit hire in the portal was an error and has now sought to take advantage. Further to this there was no evidence before him that the claim for credit hire was in fact compromised as part of the stage 2 settlement whereas in Hillier payment of damages was banked on a ‘full and final’ basis.

HHJ Backhouse went further to say that even if he was wrong and there had been an abuse, he did not believe it to be severe enough to warrant a strike out.

On the two appeals that were settled they were dealt with by Principia Law for the CHO. Principia reports that the defendant consented to them on the grounds that one had a document which, if it was before the court, would have shown there was no abuse of process, and that the other had correspondence which the court did not attach sufficient weight to, that proved hire was not compromised. We do not know what the documents appeals contained but they will likely have either shown that the defendant and CHO were negotiating the hire claim prior to the Stage 2 pack being served or that any compromise in the portal was without prejudice to the credit hire claim.

Opinion

There is no binding decision yet but what we know so far does provide some indication as to the direction the issue is going.

HHJ Backhouse’s judgment implies that the parameters for an abuse to have occurred are very much restricted to the facts of Hillier. If a defendant insurer was in communication with the credit hire company discussing the claim prior to the Stage 2 pack being served then it would be clear that the pack was in error, and settlement of the Stage 2 claim would not be in compromise of all losses arising out of the accident.

A similar approach is taken by many judges in a Part 7 claim where a credit hire claim is not included in proceedings and the matter subsequently settles. An insurer would have difficulty in proving any subsequent proceedings for the credit hire claim are an abuse of process if they were fully aware and were dealing with said hire claim prior to the original proceedings being issued.

If you are planning on disputing a credit hire claim on the grounds of compromise at Stage 2 then it is advisable to only be done if the facts of Hillier apply exactly to your case. A defendant must be in a position to reasonably assume that where a credit hire claim is listed in the Stage 2 pack as ‘no’, this means there is no intention to bring such a claim and that settlement at Stage 2 is made on a full and final basis. Remember, any successful decision is likely to be appealed.

However it is worth noting, the comments of HHJ Backhouse, that even if an abuse of process is found a strike out is not reasonable, may be echoed by other judges.

Finally, it should be noted that even if a higher court finds such cases to be an abuse of process and should be struck out it, is a minor fix for claimants to avoid this. All it requires is comments in the Stage 2 pack that hire is being dealt with outside the portal or correspondence from the claimant solicitor (and/or CHO) stating this, and that any settlement in the portal is without prejudice to the hire claim.

For more information, please contact Associate, Kaveh Rashid.