Kerry Underwood

Archive for January 2016

INSURERS AT IT AGAIN (LOST COUNT)

with 11 comments


INSURERS AT IT AGAIN (LOST COUNT)

MARKERSTUDY GROUP

 A claims handler contacted a Solicitor’s client direct after receipt of the Claim Notification Form showing details of the client’s Solicitor.

The claims handler tells the client not to contact their own Solicitors “as this may reduce our chances of successfully investigating this matter.”

It also tells the client, its opponent, that “we may take immediate steps to protect the personal data we hold about you and investigate the matter on your behalf.”

Here is the text of the letter from Markerstudy Group and here is the link to the letter.

 

Markerstudy Group

Markerstudy Claims Department

PO Box 726

Chesterfield

S40 9LG

Tel: 0844 973 8184

Fax: 0844 824 1666

Email: claims@markerstudy.com

WWW.MARKERSTUDY.COM

 

6 July 2015

 

Claim Number: TT15530085

Our Insured:

Date of Incident: 30 June 2015

 

Dear

On 2nd July 2015 we received a formal notification that you intend to claim against our policyholder for bodily injury sustained in a road traffic accident on the above date. This notification was received from the following solicitors, who claim to have received instructions from you.

[ Name redacted by me]

 

What you need to do now

Your next course of action depends on whether or not you have instructed the solicitors named above.

  1. a) If you have instructed the company:

if the company referred to above is known to you and you have provided them with formal instructions to pursue a claim on your behalf, we simply ask that you contact us with confirmation. You can do this by one of the following methods:

1) Call us on 01245 254091

2) E-mail us at PIClaims@markerstudy.com

3) Write to us at PO Box 726, Chesterfield, S40 9LG

Please quote our reference number when contacting us

Following confirmation from you, all further communication regarding your claim will be directed to the solicitors and you will receive no further contact from us directly.

 

  1. b) If you have NOT instructed the company:

if you have no knowledge of the company referred to above and/or you have not issued them with any formal instructions to pursue a claim on your behalf please contact us immediately by calling 01245 254091 or by e-mailing us at PIClaims@markerstudy.com so that we can take immediate steps to protect the personal data we hold about you and investigate the matter on your behalf.

To assist with investigations please include a telephone number, to enable us to contact you to obtain any further information required.

Please rest assured any communication with you will be treated in the strictest confidence. Please do not contact the company referred to above as this may reduce our chances of successfully investigating this matter.

General Information

As part of the claims process we will register your personal details with the Department of Works Pensions (DWP) Compensation Recovery Unit; this being a statutory requirement. The DWP works with Insurers to recover benefits arising out of insurance claims.

Markerstudy passes claim information to the Claims and Underwriting Exchange register (administered by IDC Ltd), MIAFTR (administered by the ABI) and other databases in order to assist with the prevention and detection of fraud. We will also search these and other databases, as well as share claims data with other insurers and organisations for the same purposes.

 

Yours sincerely

 

Claims Department.

 

Written by kerryunderwood

January 15, 2016 at 9:24 am

Posted in Uncategorized

NHSLA 2014/15: ANOTHER DISINGENUOUS REPORT TO PARLIAMENT

with 4 comments


NHSLA 2014/15: ANOTHER DISINGENUOUS REPORT TO PARLIAMENT

 

In its Annual Report to Parliament, published by the House of Commons on 16 July 2015 the National Health Service Litigation Authority has its annual whinge about lawyers acting for claimants that the NHS has negligently killed or injured.

 

In 2013/14 there were 174,872 written complaints to the Health Service Ombudsman. I must have carelessly overlooked this in the NHSLA’s report to Parliament – surely they would not have left this out.

 

The report of the Parliamentary and Health Service Ombudsman dated 22 September 2015 showed that in relation to acute trusts complaints rose to 21,370 as compared to 18,870 in the previous year, that is a rise of 13.25%.

The NHSLA report states that claimant costs for lower value claims are disproportionate and excessive but boasts of the number of matters it has taken to Detailed Assessment.

 

It says:-

 

“The reality is that we can exert only limited control over a claimant’s legal costs and no control at all where those costs are incurred before the claim is even reported to the NHSLA.”

 

That gives the clear impression that claimants’ solicitors can charge what they want, without any checks.

 

The truth is that the NHSLA can have every single bill assessed by the court. Why it does not do so and thus allow the court to control the costs, which is the function of the court and not that of the claimant or the NHSLA ,will become apparent when you see what the courts have had to say recently about the conduct of the NHSLA.

 

The NHSLA cannot really believe that costs judges are routinely allowing excessive and disproportionate costs. Is this not another political move by a politically motivated body to skew the data ahead of Parliament’s consideration of fixed costs in clinical negligence cases?

 

The NHS LA has a history of this and presented similarly misleading data when the abolition of recoverability of success fees and ATE premiums was being considered by Parliament.

 

Its statement on page 20, that I have just quoted, is hardly consistent with its statement on page 6:-

 

“This year we contested a high number of cases to trial and challenged numerous claims for claimant costs at detailed assessment, achieving significant savings for our members.”

 

Maybe. Nuffield Foundation Research published on 13 January 2016 shows that between 2001 and 2009 the proportion of successful claims against the NHSLA, or its “members” jumped from 45% to 70%, although it does state that the increase may now have stopped, or even been reversed.

 

The courts have been less happy with this “fight at all costs” tactic and twice in the last two months have taken the rare step of awarding indemnity costs against the NHSLA for its conduct of litigation, specifically its failure to mediate. In an age of budgeting and proportionality indemnity costs are very much higher than standard costs so that policy is costing, not saving, the NHSLA – you and me as it is taxpayer funded – money.

 

The language and tone is Orwellian. It cannot force itself to say that the number of claims has dropped – by 3.76% from 11,945 to 11,497 in the last year, but rather says:-

 

“We received 11,497 new clinical negligence claims in 2014/15 demonstrating a sustained high level of new claims.”

 

It refers to a “slowdown in growth”. No, a drop in the number of claims is not “a slowdown in growth”. It is a drop.

 

The rise in the percentage of successful cases appears in the Nuffield research and not in the NHSLA report. The Nuffield research states that the increase in success rates is “possibly because “No Win No Fee” lawyers are more cautious about taking on risky claims than the Legal Service Commission (formerly responsible for administering legal aid). “

 

Pretty obvious really.

 

In The Year in Summary on page 14 there is a pretty little wheel – figure 13 –

 

“Damages and costs saved in clinical negligence claims resolved in 2014/15”

 

And this includes subsections as follows:-

 

  • Successfully defended at trial
  • Resolved without damages payable
  • Legal costs challenged and saved.

Of the £ 1.32 billion apparently “saved” just £ 38.6 million, that is 3.74% including damages is “saved” by going to trial.

 

Curiously no wheel appears showing the massive costs incurred unnecessarily by the NHSLA as a result of the incompetent, aggressive and unreasonable defence of its claims. I bet it comfortably exceeds the £38.6 million, which of course includes damages, allegedly saved.

 

On page 8 the report lists eight factors as “drivers” of the costs of claims. (See below)

 

However a look at figure 1, not mentioned in the eight drivers, shows that claims received as a percentage of NHS activity have dropped sharply, suggesting that lawyers are correctly identifying the cases which should be brought, as evidenced by the jump in the percentage of successful cases.

 

Thus the true picture is that claims against the NHS are falling, that a greater percentage of those brought are successful and that claims lodged as a percentage of the NHS activity have dropped sharply.

 

Thus if there are any concerns then those concerns are that due to the abolition of legal aid, except in very limited circumstances, in relation to clinical negligence and the huge hike in court fees genuinely injured claimants are unable to pursue claims.

 

The NHSLA’s statement on page 19:-

 

“We have always sought to resolve claims without litigation, and we continue to use a range of alternative dispute resolution options in appropriate cases, including formal mediation.”

 

will make any clinical negligence lawyers laugh out loud, or weep, or both.

 

Pages 25 to 27 have some selected, favourable, quotes from judgments in the NHSLA’s favour. Here are some from this year which I am not expecting to be in next year’s report to Parliament:-

 

“9. In respect of the defendant’s failure to mediate, I think the only sanctions available for me to impose are to award costs on the indemnity basis and to award interest on those costs from a date earlier than today, today being the normal date. I am persuaded that the defendant’s refusal to mediate in this case was unreasonable. It took them six weeks to reply to the offer and they then replied in the negative…

 

 

  1. If the party unwilling to mediate is the losing party, the normal sanction is an order to pay the winner’s costs on the indemnity basis, and that means that they will have to pay their opponent’s costs even if those costs are not proportionate to what was at stake. This penalty is imposed because a court wants to show its disapproval of their conduct. I do disapprove of this defendant’s conduct but only as from the date they are likely to have received the July offer to mediate.”

 

Reid v Buckinghamshire Healthcare NHS Trust [2015] EWHC B21 (Costs) 28 October 2015

 

In Bristow v The Princess Alexander Hospital NHS Trust [2015] EWHC B22 (Costs)

 

 

the NHSLA was ordered to pay indemnity costs for the entire costs proceedings following its rejection of an offer to mediate the costs of a dispute.

 

Master Simon said that the parties “should be encouraged to enter into mediation, and if they fail to do so unreasonably then there should be a sanction… they gave no good reason other than the fact that the case had already been sat down for a Detailed Assessment”.

 

The case was brought by Irwin Mitchell and one of their partners, Tom Blackburn said that despite the ruling in this case and in Reid v Buckinghamshire the NHSLA had not changed its tactics

 

“We had this ruling at the beginning of November, and we have still not had one mediation.

 

Insurers have been slow on the uptake, but have accepted mediations in some cases. They care about their bottom line.”

 

In neither case has the NHSLA appealed.

 

Here are the comments from the Parliamentary and Health Service Ombudsman on 8 December 2015 which I am not expecting to see in next year’s report to Parliament either.

 

“Nearly three quarters of hospital investigations into complaints about avoidable harm and death claimed there were no failings in the care given, despite the Parliamentary and Health Service Ombudsman’s investigations of the same incidents uncovering serious failings.

 

The wide range in review of the quality of NHS investigations into complaints about avoidable harm of death by the Parliamentary and Health Service Ombudsman, found that inadequate hospital investigations are leaving distraught patients and families without answers and delaying much needed service improvement. “

 

The Ombudsman found that:

 

  • “Nearly three quarters (73%) of cases where the Parliamentary and Health Service Ombudsman found clear failings, hospitals claimed in their early investigations of the same incident that they had not found any failings.
  • Hospitals failed to class more than two thirds of avoidable harm cases as serious incidents, meaning that they were not properly investigated.
  • 19% of NHS investigations were missing crucial evidence such as medical records, statements and interviews.
  • 36% of the NHS investigations which recorded failings did not find out why they had happened, despite 91% of NHS complaint managers claiming that they are confident they could out answers. “

“Parents and families are being met with a wall of silence from the NHS when they seek answers as to why their loved one died or was harmed. “

 

“Our review found that NHS investigations into complaints about avoidable death and harm are simply not good enough. They are not consistent, reliable or transparent, which means that too many people are being forced to bring their complaint to us to get a result. In the period 1 January 2015 to 1 December 2015 the Parliamentary and Health Service Ombudsman investigated 536 cases about potentially avoidable deaths and upheld the complaint in relation to 264 avoidable deaths. “

 

The report states on the front:-

 

“Ordered by the House of Commons to be printed 16th July 2015”

 

I look forward to the day when an Act of Parliament says:-

 

NHS Litigation Authority

 

“Ordered by the House of Commons to be abolished.”

 

Footnote

Drivers

  1. An increase in the number of patients being treated by the NHS.
  2. An increase in the number of reported incidents. This may indicate an increasing and positive reporting culture and so is not necessarily reflective of an increase in incidents occurring.
  3. An increase in the number of patients claiming compensation as a proportion of reported incidents.
  4. An increase in the number of patients who claim but who do not recover compensation.
  5. An increase in the number of lower value claims.
  6. Disproportionate claimant legal costs for lower value claims.
  7. Excessive claims for legal costs from some claimant firms.
  8. Rising lump sums and annual costs (usually, for care), over and above inflation, for high value claims.

 some links

THE NHS LYING AUTHORITY AT IT AGAIN

NHS LITIGATION AUTHORITY: HOW IT MISLED PARLIAMENT

NHS LITIGATION AUTHORITY: HAS IT MISLED PARLIAMENT?

MEDICAL DEFENCE UNION: A SUITABLE CASE FOR TREATMENT

 

Written by kerryunderwood

January 14, 2016 at 1:02 pm

Posted in Uncategorized

INSURERS, THIRD PARTY CAPTURE AND MUCH MORE: GAVIN EDMONDSON CONSIDERED

with 12 comments


 INSURERS, THIRD PARTY CAPTURE AND MUCH MORE: GAVIN EDMONDSON CONSIDERED

 

In Gavin Edmondson Solicitors Ltd v Haven Insurance Company Ltd [2015] EWCA Civ 1230

 

the Court of Appeal in allowing the solicitors’ appeal, held that when an insurer is notified of a claim under the Portal and subsequently resolves the matter directly with the claimant the insurer remained liable to pay the claimant’s solicitors costs under the Portal scheme.

 

The insurers had done this with six of Gavin Edmondson’s clients. In each case they offered to pay the client more if they did not use solicitors. The insurers had adopted this as a deliberate tactic.

 

The solicitors had entered into Conditional Fee Agreements with the clients and used the Law Society model agreement and issued client care letters. The claims were all entered onto the road traffic Portal, that is the Protocol for Low Value Personal Injury Claims in Road Traffic Accidents.

 

The Court of Appeal held that equity would intervene in accordance with the case of

 

Khans Solicitors v Chifuntwe and another [2013] EWCA Civ 481

 

which established that equity will intervene to protect a solicitor’s claim for fees where the paying party has notice that the receiving party’s solicitor has a claim for fees.

 

The Court of Appeal here held that that doctrine applied when the paying party had implied notice of the outstanding fees. The immorality of the paying party’s conduct was similar in each case. The court accepted that this involved an extension of the principle set out in the Khans case.

 

Although the solicitors’ client care letter overrode the Conditional Fee Agreement and any lien which may have arisen under it, the solicitors were nevertheless entitled to recover the fixed costs and the sums payable under the Portal scheme.

 

The solicitors therefore had an interest which equity would protect.

 

The client care letter indicated that the solicitors would recover their costs from the defendant if the claim succeeded and would not charge the client anything.

 

The case highlights the potential problems in having terms and conditions in both a client care letter and a Conditional Fee Agreement.

 

The reason why here the client care letter overrode the Conditional Fee Agreement was that the client care letter contained the following paragraph:

 

“For the avoidance of any doubt if you win your case I will be able to recover our disbursements, basic costs and the success fee from your opponent. You are responsible for our fees and expenses only to the extent that these are recovered from the losing side. This means that if you win, you pay nothing.”

 

The Court of Appeal accepted that there was a tension between that statement and the statement in the Conditional Fee Agreement:

 

“If you win your claim, you will pay our basic charges, our disbursements and success fee. The amount of fees is not based on or limited by the damages. You can claim from our opponent part or all of our basic charges, our disbursements, a success fee and insurance premium.”

 

The Court of Appeal also proceeded on the basis that the client’s waiver of entitlement to cancel the Conditional Fee Agreement within the cooling-off period was ineffective, although it is not clear as to why they formed that view, but nevertheless said that that did not relieve the insurers of their liability to pay.

 

The Court of Appeal said that in each case Haven, with full knowledge of the existence of Conditional Fee Agreements between the claimants and the solicitors, and full knowledge that the matters were proceeding in the Portal, made offers of settlement with no express limitation as to the period in which the offers could be accepted.

 

“It would have been open to Haven to make the offer conditional on cancellation of Edmondson’s retainer within the permitted period, but it did not do so. In each case Haven assumed the risk that its offer might be accepted after the expiry of the cancellation period. In the event, in none of the underlying cases was the retainer cancelled or otherwise terminated.”

 

The Court of Appeal said that the solicitors had no right to recover fees from its clients, but nevertheless in the normal course of events it did have the right to recover fixed costs under the Portal scheme.

 

Comment

 

This is one of those rare cases which deals with a number of different and important points of law. Most cases deal with only one.

 

Firstly it confirms the legal principle dating back to at least 1779, namely that if a paying party, knowing that a solicitor is due fees from his or her client, pays damages direct to that solicitor’s client then the paying party itself must pay the opposing lawyers’ fees.

 

This is a very important principle which few claimant personal injury lawyers understand. So often I hear complaints by claimants’ lawyers that defendants are paying damages cheques direct to the claimant. That simply is not a problem as the defendants also have to pay the claimant’s lawyer’s fee. Thus for example if the lawyer is deducting 25% off damages of £10,000.00 the defendant pays £10,000.00 to the claimant then the defendant must also pay the lawyer’s fee of £2,500.00, plus ordinary recoverable costs, as long as the defendant was on notice.

 

Secondly the case confirms that the indemnity principle does not apply in Portal cases, just as it does not apply in fixed recoverable costs cases – see Butt v Nizami [2006] EWHC 159 where the court said:

 

“It seems to me clear that the intention underlying CPR 45.7-14 was to provide an agreed scheme of recovery which was certain and easily calculated. This was done by providing fixed levels of remuneration which might over-reward in some cases and under-reward in others, but which were regarded as fair when taken as a whole.”

 

Thus a statement that the client will be charged nothing in any event, and a failure to make the client primarily liable for costs, which are then recoverable from the other side, does not cause a problem in Portal or fixed recoverable costs cases.

 

Thirdly, but related to the second point, the fact that the client was under no obligation to pay the solicitor if the Cancellation of Contracts etc Regulations had not been complied with, did not mean that the solicitor could not recover costs. This is logical. If the indemnity principle does not apply in Portal and fixed recoverable costs cases then the fact that due to a breach of the Cancellation of Contracts etc Regulations the solicitor had no right to costs from the client is irrelevant.

 

Thus the case of Allpropertyclaims Ltd v Mr Tang Pang and ITC Compliance Ltd [2015] EWHC 2198 (QB) where the court held that a breach did result in the solicitor being unable to recover costs from the other side is distinguished as in that case, not being a Portal or fixed recoverable costs case, the indemnity principle did apply.

 

Fourthly the court said that had the insurance company made their offers conditional on the client cancelling the contract within the period then they could have avoided paying the solicitors’ costs.

 

I do not understand this. If the indemnity principle applies then, as per Allpropertyclaims Ltd v Mr Tang Pang and ITC Compliance Ltd [2015] EWHC 2198 (QB), a breach of the regulations will result in the solicitor being unable to claim costs from his or her client and therefore being unable to recover from the other side. However if the indemnity principle does not apply then the fact that the client is not liable for the costs makes no difference. In fact these cases did not involve breaches of the regulations but rather the work was done within the potential cancellation period and the client did not cancel until afterwards. The solicitors had done the work and were entitled to be paid.

 

Surely the same is true even if the client withdrew instructions during the cancellation period. The client had instructed the solicitors and entered into a formal Conditional Fee Agreement and received a client care letter etc. The work had been done. The fee had been earned. What the regulations do is to prevent the solicitor charging the client and normally, due to the indemnity principle, that is fatal in terms of recovering costs from the other side.

 

However in a Portal or fixed fee case it makes no difference – see Butt v Nizami.

 

Therefore the court’s suggestion, and the comments made by many others, that all Haven need to do is change the terms of the offer to make it conditional upon the client cancelling within the cancellation period, seems to me to be wrong.

 

This raises a further point. Notice of cancellation does not have to be given in relation to a contract made in the solicitor’s office, but most solicitors are now always giving the right to cancel within 14 days, even if the client does not have that right under the regulations. One of the reasons for this is that it is not always clear where a contract has been made. For example a client telephones and asks a solicitor if they deal with personal injury work on a No Win No Fee basis and the solicitor says yes, but we will have to see you to find out if the case is a good one.

 

The client then comes in and sees the solicitor who agrees to take the case. On slightly different facts, but the principle is identical, the court in Cox v Woodlands Manor Care Home [2015] EWCA Civ 415 held that a contract had been made in the original conversation and it was subject to a condition precedent, namely that the solicitor thought the case had merit.

 

It would be a great shame if solicitors seeing clients in their office and giving them additional protection, that is the right to cancel within 14 days, were laying themselves open to an entirely opportunistic tactic by an insurance company to avoid paying solicitors for work done. All that will do is to encourage solicitors not to offer that additional protection.

 

Summary

 

This is a very welcome and a very important decision which needs to be read and understood by all claimant lawyers.

 

Its key point is that the court will not look favourably on insurance companies who seek to avoid paying the properly incurred legal costs of claimants. The tone of the decision suggests that the Court of Appeal is rather more aware of the reality of this country’s insurance companies than is the government.

 

 

 

 

 

 

 

Written by kerryunderwood

January 5, 2016 at 8:47 am

Posted in Uncategorized

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