Recently we have seen a number of solicitors withdrawing claims for the portal on the basis that, as not all heads of claim are agreed, there can be no agreement to any head of damage and, therefore, all are in dispute. If allowed to continue, this would result in increased costs liabilities for insurers as well as increased frictional cost. This case, although of only persuasive authority, will be useful in opposing such behavior and ultimately leading to it ceasing.
The claimant, a cyclist, was involved in an accident with the defendant on 12 August 2013, causing injury and damage. The defendant’s insurer in response to the stage 1 notification through the MOJ Portal conceded liability. The claimant instructed an accident management company, who supply credit hire push bicycles and solicitors to assist him following the accident.
The solicitors arranged for the claimant to be medically examined and presented their client’s case for cycle hire, storage, the pre-accident value of his bicycle and personal injury. The claim for the pre-accident value was presented before the stage 2 process began and a payment was made by the defendant’s insurer to the value of the damaged bicycle. In due course two invoices were submitted (still prior to stage 2) for hire and storage.
The defendant’s insurer requested further information; as to why either was needed and sought clarity on the issue of impecuniosity. No response to these questions was received.
Stage 2 of the process commenced on 25 November 2013. The claimant placed a value on the personal injury and also included the pre-accident value, the hire and the storage charge. On 3 December the defendant’s insurer agreed the personal injury valuation and agreed the value for the bicycle. Offers of nil were made for the other heads of damage and the defendant’s insurer referred to its earlier correspondence and stated it required the information in order to assess the claim for hire and storage, maintaining its earlier position. No response to the insurer within stage 2 of the portal was given.
At the end of the negotiation period the claimant’s solicitor wrote to the defendant’s insurer stating that the points the insurer had raised were too complicated for the MOJ process and so pursuant to 7.76, the claim was to be removed from the MOJ. Within 10 days of writing that letter the claim had been issued with Part 7 for all heads of damage, including the pre accident value and the personal injury. We recommended and were instructed to, lodge an application (followed by a defence in the same tone as the application ) for:
1) Judgment for those items which the defendant considered to be agreed together with the MOJ costs incurred to the point of agreement
2) Allocation to the small claims track
3) The claimant to amend his statement of case to reflect the facts upon which his claim for storage were founded
4) Disclosure of the claimant’s financial accounts should he seek to plead impecuniosity
The claimant obliged with point 4 and dealt in part with point 3 before the application hearing date.
The hearing proceeded with the main argument of whether an agreement reached within stage 2 of the MOJ process would persist even where the action was withdrawn from the MOJ thereafter.
The defendant’s argument in its simplest form was that the pre accident value and personal injury were no longer in dispute and the MOJ Portal had achieved its purpose in narrowing those two issues before the case was withdrawn and that agreement should therefore be binding upon the parties. The claimant’s argument was that the MOJ was its own self-contained system, akin to Part 36 in that respect. Accordingly, the normal rules of contract did not apply to agreements therein; it was not for the defendant to pick and choose what it settled, without an agreement to the whole claim the claimant was right to proceed with Part 7 for the claim as a whole.
On 23 April 2014 District Judge Vincent sitting in the Oxford county court heard the oral argument on the points that remained. As to the request that the claimant provide a clearer case on matters of mitigation, she agreed with the defendant and the claimant was ordered to clarify his position in relation to storage.
With regard to the main area of disagreement, the learned judge was aware that this is an area where there is little Judicial guidance and she elected to provide a reserved Judgment.
Having set out the preamble and aims of the pre-action protocol for low value personal injury claims in road traffic accidents (the protocol) and the relevant sections thereof, the judge considered the facts in this case. She considered the grounds that a claimant may seek to issue Part 7 proceedings provided by the protocol and in particular paragraph 7.76, the paragraph by which the claimant had removed the action from the MOJ process.
As it was not sought within the application, the judge was at pains to highlight that she had not been asked to consider whether withdrawal under that part was or was not a reasonable course of action for the claimant to take. She did however foresee that her decision would have similar consequences.
Both counsel had supplied the judge the cases of Boston v Royal Mail Group Limited; Purcell v McGarry; Ullah v Jon; Patel v Fortis Insurance Limited; Ilahi v Usman. She found that none of the cases were directly relevant to the points she had to decide. She did however, make specific reference to the decision in Ilahi v Usamn as being the most helpful. This was a decision concerning whether a claimant was reasonable in exiting the portal. She also referred to reasons for refusing permission to appeal given by Lord Justice Jackson.
The judge’s decision, having had regard to the evidence, the protocol, case law and oral argument, was that the defendant’s argument is correct. It is not only possible, but was the intention of the provisions of the protocol, that parties may compromise individual elements of a claim within the stage 2 process. She found that the claimant’s submission defied logic and the aims of the protocol. To allow the claimant’s argument to be successful would be to destabilize the whole basis for offers within the MOJ. She could not find support for the claimant’s contentions within the ambit of the protocol; she felt that if they were correct, then the protocol would provide such specific guidance, but it does not.
She also referred to the protocol’s detailed interim payment provisions (as well as the fact that the claimant had not returned the pre accident value payment) to be suggestive that matters were capable of settlement individually. If matters are not agreed at stage 2, then at stage 3 items which had been agreed (in stage 2) were to be regarded as un-agreed. This would require repayment of any interim and more work for the court.
As a final point, were the claimant correct, then wherever the word acceptance is used within the protocol it was to be defined as ‘conditional acceptance’, she found that to be not only confusing, but unlikely.
The claimant also argued that on the point of costs, such a decision was unfair. If the defendant’s interpretation was correct then the claimant is at risk of recovering no costs in respect of matters agreed. She found against this point also - referring to the rules which plainly provide that any offer in the portal was deemed to include portal costs. The expectation of the claimant was to enter the portal and recover fixed costs, the claimant accordingly has not lost on that expectation with this decision.
The judge awarded our costs in the sum of £1,710.
While this judgment is not binding it is of persuasive authority. The judge was aware of the unique position of this application and did both parties a great service by providing a well structured, clear and reasoned judgment. It should be clearly noted that the judge did not comment upon whether the claimant’s actions were reasonable on the facts of this case. It therefore does not grant precedence nor support a contention that hire and storage in general is too complicated for stage 3; such matters are, as always, fact specific.
What it does grant is costs clarity for both parties where some items are agreed, yet others, (following the natural negotiation and exchange during stage 2) raise issues which require Part 7 investigation and scrutiny to be resolved
Insurers in those cases are now able to suggest that a more demanding head of damage, which is not suitable for determination within stage 3, be dealt in Part 7 without first having to weigh the costs of investigation against the Part 7 costs of an action for all of the damages submitted in the stage 2 process. It allows the items which are disputed to be resolved fairly with the risk of costs being equally distributed after the stage 2 exchange of information. While those which are capable of quick resolution to be resolved, thus saving parties costs all around.
To avoid potential conduct issues or Part 7 proceedings being issued to enforce payment for sums so agreed, insurers should of course ensure that they abide with the MOJ requirements and issue payments (for damages and the MOJ costs) promptly for those items once agreed.
In reviewing the decision, Sarah Robson, counsel for the defendant, said: “This case clearly demonstrates the success which can be achieved with great communication throughout between the insurer, their solicitors and counsel.”
Melanie Mooney
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