Supreme Court clarifies rules on MOJ Portal costs

Supreme Court clarifies rules on MOJ Portal costs

Gavin Edmondson Solicitors v Haven Insurance

Lord Briggs gave the unanimous decision of the Court today that the insurer was liable for the solicitors’ costs in cases in which it had struck direct settlements with claimants represented by the firm. As these modest value claims were processed via the claims portal and under the provisions of the low value road traffic accident (RTA) pre-action protocol, the decision is clearly of significance given the sheer numbers of cases resolved in this way. Although the decision is based on principle rather than policy, it nevertheless makes a very direct reference to “the careful balance of competing interests enshrined in the RTA protocol”.

Lord Briggs referenced the 2013 appeal Khans Solicitors v Chifuntwe, which held that “the court will intervene to protect a solicitor’s claim on funds recovered or due to be recovered by a client or former client if (a) the paying party is colluding with the client to cheat the solicitor of his fees, or (b) the paying party is on notice that the other party’s solicitor has a claim on the funds for outstanding fees”.

He found that Haven was clearly on notice that Edmondson would be looking to the insurer for recovery of costs, not least from the fact that the claims were notified via CNFs placed on the claims portal by the firm. Further, he found that its clients did have a residual liability to pay Edmondson’s costs despite the claims being funded by CFAs. His reasoning on this point is subtle but important:

“the client care letter did not destroy the basic liability of the client for Edmondson’s charges expressly declared in the CFA and Law Society’s standard terms. It merely limited the recourse from which Edmondson could satisfy that liability to the amount of its recoveries from the defendant … [the letter and the CFA] are shot through with clear assertions of the client’s responsibility for the firm’s charges in the event of a win in the litigation, which is defined to include a settlement of the claim under which there is an agreement to pay the claimant damages.”

The upshot is that it is now beyond doubt that insurers are liable for costs in these circumstances, whether under the RTA protocol (as here) or under the EL & PL protocol.

Credit to BLM for providing the source material for this article –