Facts of the case
Following road traffic accidents involving vehicles driven by Haven policyholders, six individuals entered into conditional fee agreements (CFAs) with Edmondson for their insurance claims. In accordance with the Pre-action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents – under which solicitors are expected to be paid by insurers for fixed costs and charges – the solicitors firm notified the claims through the road traffic accident portal.
However, the CFAs were eventually cancelled as claimants opted to settle directly after being approached by Haven. According to a summary provided by the Supreme Court, the individuals were promised a faster claims process and higher compensation if the solicitors were dropped.
Edmondson filed a claim for costs it would have otherwise been entitled to had the portal not been bypassed, but failed in the first case. A subsequent appeal went in its favour.
The legal battle reached the Supreme Court, which resulted in a unanimous dismissal. While the Supreme Court and the Court of Appeal had different reasons and payment amounts, ultimately it was ruled that Edmondson was entitled to the enforcement of the traditional equitable lien against Haven.
Insurer maintains stand
Reacting to yesterday’s decision, Haven claims director Joe O’Connell said: “While we are naturally very disappointed by the decision, this case was not about whether insurers should settle directly with claimants. It was only about the claimants’ solicitors’ costs and it turned on a technical analysis of their retainers.
“The Court did not criticise Haven in any way and there has never been any suggestion that the underlying claimants received any less than the compensation to which they were entitled. In fact, Haven believes that they received more than they would have received had they settled their claims through solicitors.”
O’Connell said the insurer has always acted fairly towards claimants and will keep doing so.
“We believe that it is in claimants’ interests to settle directly with us and we will continue to provide an excellent service to those who choose to do so,” he added. “Claimants who deal directly with Haven will resolve their claims more quickly and are likely to receive more in compensation than they would if they involved solicitors, particularly as solicitors will deduct up to 25% from claimants’ damages to cover success fees and other legal costs.”
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