The Supreme Court ruling in Gavin Edmonson Solicitors Limited v Haven Insurance Company Limited [2018] UKSC 21 will be welcome news for personal injury firms who run low value personal injury claims.
The case involved six claims for damages following road traffic accidents, in which the Claimants had entered into conditional fee agreements with Gavin Edmonson Solicitors. The solicitors subsequently notified the claims through the online claims portal in accordance with the pre-action protocol for RTA claims, however, Haven used the Claimants’ details to contact them and make offers to settle the claims which were ultimately accepted. As a result the claims were settled without the knowledge of Gavin Edmonson Solicitors and the Claimants cancelled their CFAs. The actions taken by Haven deprived the Solicitors of approximately £12,500 in fixed costs that would otherwise have been due had the claims proceeded normally under the CFAs.
The case had originally been decided in Haven’s favour but the decision was reversed in the Court of Appeal, before Haven elected to challenge that judgment in the Supreme Court.
The Supreme Court unanimously dismissed the appeal and held that Gavin Edmondson Solicitors were entitled to the enforcement of the traditional equitable lien against Haven Insurance, as the Claimants owed a contractual duty to pay the solicitors’ charges.
In handing down judgment, Lord Briggs said the RTA protocol was designed to provide certainty and fix the costs that are recoverable which would be undermined if the Court were to award alternative remedies:
‘Part of the balance struck by the RTA Protocol is its voluntary nature.’ ‘Its voluntary use stems from a perception by all stakeholders that its use is better for them than having every modest case go to Court. If the Court were to step in to grant coercive remedies to those affected by its misuse by others that balance would in all probability be undermined.’
The Law Society also intervened in the case as they believed it was an important point of principle for the profession. Law Society President Joe Egan had this to say:
‘This judgment is good news for our members. It confirms that solicitors will have a remedy to recover their costs in these circumstances where an insurer has tried to avoid payment by going to the claimant direct. It will also be good for consumers as it reduces any incentive for insurers to go directly to claimants, cutting solicitors out and therefore losing the protection a solicitor brings in representing the client in a claim. The case is also a useful confirmation given the expected broader application of fixed recoverable costs regimes in the future.’