A claimant law firm, GSD Law Limited, submitted a number of informal claims totalling £225,000 for legal costs to Allianz following the settlement of a number of low value injury claims. The costs were considered excessive and challenged. The formal Bills for Costs that followed totalled just under £160,000.00 but were further later reduced to £128,000. This indicated the original informal bills were inflated by £97,000 (75%) as an absolute minimum. However, the formal Bills themselves were still considered substantially inflated.
Allianz alleged systemic fraud against GSD Law Limited including claims for hourly rates in excess of the retainer rates, claims for senior lawyers’ rates claimed for the work of junior fee-earners and claims for work that had simply not been done.
Two of the claims were chosen as sample cases for the purpose of litigation, GSD Law Limited was joined as a party to the proceedings and the issues were heard over three days before a District Judge of The County Court at Leeds in 2014. During the course of the trial, the principal solicitor and owner of GSD Law Limited, Miss Kirna Madhas gave evidence. The District Judge ultimately found all of Allianz’s allegations proved and the evidence of Miss Madhas was held to be “not only evasive and inconsistent, but dishonest”, with the District Judge adding that “she was a wholly unreliable witness. I can have no confidence in anything she has told me.” Consequently, all costs in the two sample cases were disallowed and GSD Law Limited was ordered to pay the costs of the proceedings on an indemnity basis.
GSD Law Limited subsequently appealed the decision of the District Judge on five points of law and procedure but their appeal was dismissed by the Circuit Judge by a judgment dated 08/07/15.
GSD Law Limited thereafter pursued a second appeal, having initially been refused permission but that was also dismissed by the Court of Appeal on 15/12/17. The assessment proceedings in the remaining cases continue.
Tony Newman, Head of Motor Claims at Allianz, said: “These types of behaviours taint the entire legal profession, and have to be rooted out and addressed by the toughest possible means.Ultimately, this is an act of greed and fraud against a motor insurance customer - it is not a victimless crime. Claimant law firms need to understand that Allianz will take them to task if they take this route.”
Jon Williams, Director of Williams Associates Costs Lawyers acting for Allianz, said: “Allianz has been entirely vindicated for taking a robust stance when presented with such thoroughly dishonest claims for costs by this firm of solicitors. The negotiation and assessment of costs is as much a legal process as the underlying substantive claim and there is no place in the legal, or indeed any, profession for such fraudulent practices.”
