Defendant lawyers say they will continue to block firms’ attempts to inflate claim values to secure extra costs after a court ruled against the latest such attempt. National insurance firm HF said today that it has secured a judgment at Newcastle County Court ‘exposing’ claimant solicitors who had tried to argue their client’s case was worth more than £25,000.

That value would have resulted in the solicitors recovering more than fixed costs through the case being allocated to the multi-track.

In the personal injury case, which has not been published, HF said the judge allocated the claim to the multi-track having ‘relied entirely on the misleading valuation of up to £50,000 on the claims form’.

HF, on behalf of insurer Hastings Direct, said the claimant solicitors, who have not been named, were trying to gain extra costs through multi-track allocation.

Their budget indicated an intention to seek costs of around £66,000 if the claims were successful – some £50,000 more than would have been recoverable if the case was subject to fixed costs.

HF submitted to the judge that this was ‘abuse of the system’ and the judge chose to reallocate the claim to the fast track. He also ruled that the claimant solicitors could not recover any costs associated with the period of multi-track allocation, including the costs of preparing the costs budget. He awarded HF costs of £3,000.

Morgan Davies, partner in counter fraud at HF, said insurers are being ‘exploited by opportunistic solicitors’ pushing claims over the threshold for fixed costs. He added: ‘We have seen a sharp rise in claimant solicitors looking for ways to make additional income, following the introduction of the OIC, the official injury claim service. When cases are processed as small claims, claimant solicitors are not able to recover their costs and are therefore seeking other means to generate lost revenue.

‘This is driving up the cost of claims for insurers, which in turn drives up the cost of premiums for drivers.’

The issue of disputes over claim values is set to magnify in a few months’ time, as the fixed recoverable costs regime extends to most civil claims worth up to £100,000.

The master of the rolls Sir Geoffrey Vos said last week that he was not concerned that the change would affect access to justice, although he suggested it may ‘take time to bed in’.

 

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