Andrews v Harrison Taylor Scaffolding & Ors f20071 EWHC 90071 (Costs): Senior Costs Judge, Master Hurst

A Regulation 4(2)(e)(ii) case determined as a preliminary issue that the claimants solicitors had "signed up" the claimant to a NIG policy including the burden of a bank loan for disbursement funding and the claimants solicitors for their part secured a conditional fee arrangement with the claimant which bore the management company's emblem "championing your right to compensation". The paying party contended that it was a pre condition of the arrangement between the management company and the claimant's solicitors for them to recommend or advise a claimant to take out a policy of insurance arranged by the management company so as to secure future referrals and remain on their panel of solicitors. Such was the interest that the claimant's solicitor had with the management company as to require it to be declared in accordance with the 2000 Regulations.

 

Master Hurst held that the claimant's solicitors had a declarable interest in recommending the NIG policy (Myatt followed). At the relevant time the claimant's solicitors received 95% of their work from the claims management company. They were required to comply with their operations manual and where disbursement funding was required had to recommend the NIG policy. CFA unenforceable.

 

Bevan v Power Panels Electrical Systems Ltd [20071 EWHC 90073 (Costs) Master Wright

A Regulation 4(2)(c) (alternative funding) and 4(2)(e)(ii) (disclosure of interest in ATE insurance policy) case. Under 4(2)(c), oral advice given by solicitors but insufficient written disclosure to client of their interest recommending insurance with Europe Assist. Material breach not saved by materiality test. Under 4(2)(e)(ii), 23 year old electrician had no real understanding of insurance matters. CFA unenforceable.

Kashmiri v Ejas (20071 EWHC 9007 4 (Costs)

Master Simons

A Regulation 4(2)(c) case. The claimant's solicitor spent 5 hours discussing claim and the issue of insurance with a sophisticated business client. CFA held to be valid.

 

Myers v Bonnington (Cavendish Hotel) Ltd (2007] EWHC 90077 (Costs) Master Rogers

Another Regulation 4(2)(e) case. This one involving Accident Line Protect. The claimant's solicitors did not make clear to their client that the firm had an obligation to recommend the ALP scheme. However the Master held that it would have made no difference if this disclosure had been made to the client. In this instance the firm was able to show that out of 26,317 new files opened during the relevant period only 24 were ALP referrals, less than 0.1% of the total files opened and that during the period in question ALP referrals provided 0.3% of the firm's total income. On that basis Master Rogers found that the interest not declared by the solicitors pursuant to the Regulations was de minimis and that it had no adverse effect on the claimant's protection or the administration of justice generally. Therefore no material breach.

 

Elstone v Knowles (SCCO 21 November 2007

Deputy Master Rowley

Another ALP compliance with Regulation 4(2)(e)(ii) case. Here the Deputy Master found that 20% of the claimant's solicitors personal injury practice resulted in its relationship with ALP. In this instance this did not amount to a significant number of cases, nonetheless the Deputy Master found that it amounted to over 5% of the cases opened by the claimant solicitors during the relevant period. The question of whether "Accident Line" is a "membership scheme" or a "panel arrangement" was considered. The Deputy Master concluded that it was clear from the evidence before him that the purpose of the ALP scheme was to facilitate the provision of ALP's insurance product by giving solicitors a delegated authority to bind the insurer. It is not a relationship brought about to refer cases to solicitors and upon which the

provision of insurance is merely peripheral. He contrasted the indirect financial interest in the nature of the "Ainsworth panel" as set out in Garrett finding that the arrangements of the ALP panel did not constitute a discloseable interest in this case.