‘Litigation happy’ claimant solicitors who issue proceedings prematurely to escape being bound by the Road Traffic Accident (RTA) Fixed Recoverable Costs Scheme should beware the firm line the courts are now taking in these matters, according to Chris Perry of insurance law experts Browne Jacobson.
Introduced in October 2003, the scheme was designed to ensure that claimants in RTA insurance cases would benefit from speedier settlements by capping the legal costs which were recoverable from defendants in cases where the parties settle ahead of litigation. However, the legislation has since proved to have some unintended consequences, with the number of RTA cases reaching the courts increasing by some 43 per cent in the 18 months following its introduction.
Part 45.7 of the Civil Procedure Rules (CPR) lay down strict guidelines proscribing the schedule of costs that may be claimed for if a case is settled out of court. However, it seems that some claimant solicitors are pushing for litigation in cases which could foreseeably be settled, with a view to maximising the amount of costs that can be claimed.
Now, following recent rulings on such cases, it appears that the judiciary are clamping down on this unsavoury practice
“We have seen a spate of such cases recently,” explained Perry. “And, without exception, in cases where there is a clear intent on the part of claimants’ solicitors to wilfully put themselves outside of the remit of part 45.7, courts are finding that the spirit should triumph over the letter of the law. In the most flagrant cases, claimant solicitors have been known to refuse all pre-issue offers of compensation or attempts at negotiation and push on regardless to trial, only to then accept offers largely similar to those it has previously refused. In such circumstances, the over-riding presumption of the courts has to be that the solicitors’ sole intention is to circumvent the CPR.
“The pre-action protocol for personal injury claims specifically mandates that parties to a dispute, and their legal representatives, should exhaust all possibilities for settlement prior to instigating proceedings. Litigation should be viewed only as a last resort, not an instinctive response and not as a means of profiteering.”
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