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By Helen Pegelow

Oct 31st, 2018

Dirty Tricks, Tips and Tactics - The Portal 5 Years On

The Pre-Action Protocol for Low Value Personal Injury (Employers’ Liability and Public Liability) Claims has been in operation since July 2013. During that time we have seen some claimant firms adopting less than savoury tactics to try and circumvent the restrictive costs regime. This article aims to tackle those and other common issues which have arisen.

Starting a claim outside the portal process

All employers’ and public liability claims should be submitted in the portal unless certain conditions set out in Paragraph 4.3 of the Protocol apply. One of these conditions is where there is more than one defendant in a disease claim.

In Williams v The Secretary of State for Business, Energy and Industrial Strategy (2018) a claimant firm recently came under fire in the Court of Appeal for using this exception to avoid being restricted to portal costs. The court decided on the facts of the case that it was unreasonable for the claimant to have commenced his claim outside the bounds of the portal process. There was no realistic prospect of more than one employer being involved in the claim and had full instructions been taken from the outset, this would have been obvious to the claimant’s solicitors. Helpfully, the court was satisfied that CPR 44 gave the judge sufficient remit to award fixed portal costs even though the claim had never been issued via the portal in the first place.

Late or Short Payment of Costs/Damages

Paragraph 6.17 of the Protocol stipulates that the claimant may remove a claim from the portal due to non-payment of costs or disbursements. In our experience, claimants’ solicitors often try to use this provision to their advantage. However, paragraph 6.17 specifically says “may” rather than “must” and it is for the claimant’s solicitor to determine whether it is reasonable to exit the portal process manually for late or short payment of damages and costs. CPR Part 45.24 sets out that where a claimant unreasonably exits the protocol process, the claimant will be limited to portal costs.

The court gave some useful guidance as to what is unreasonable in the RTA portal case of Ilahi v Usman (2012) in which HHJ Platts said:

In my judgment to manipulate the RTA protocol procedure to take the claim away from stage 3 and into part 7 because of the costs implications is contrary to the spirit if not the letter of the protocol and wholly contrary to the overriding objective. The court has developed the RTA protocol in order to provide a speedy, certain and costs effective way of dealing with these claims.

In Smith v Owen (2016) (a decision of the traditionally claimant-friendly Birkenhead County Court) the claimant’s solicitors removed the claim from the portal and commenced part 7 Proceedings due to non-payment of an agreed disbursement - a £2.50 DVLA fee. The court was highly critical, stating that the claimant’s solicitors’ conduct was contrary to the spirit of the protocol and that their actions simply amounted to costs building.

Langleys have first hand experience of the court adopting this approach. We recently dealt with a case where the claimant’s solicitors received their costs a day or so outside the protocol period. Moreover, the payment was £10 short of what had been agreed. The claimant’s solicitors commenced part 7 proceedings despite (by that time) having the money in hand. The court was critical of the claimant’s solicitors’ approach, and awarded the defendant the costs of the assessment hearing.

Limitation

We are increasingly seeing long delays between liability being admitted during Stage 1 of the portal process, and a Stage 2 pack being served. Frustratingly, there is little the defendant can do to force the claimant’s solicitors to progress the claim.

One would think that limitation would draw any delay to an end. However, under paragraph 5.7 of the Protocol the claimant can commence part 8 proceedings and simply request a stay, purportedly complying with the terms of the Protocol.

In our experience, the court tends to rubber stamp such orders without considering whether the claimant’s conduct has been appropriate. Strictly speaking, any stay can be open-ended, the only stipulation being that the stay must be lifted if settlement cannot be agreed at stage 2, and the parties wish to proceed to stage 3. There is perhaps one saving grace. If part 8 proceedings are commenced and a stay is imposed, the claim remains in the portal process and portal costs still apply.

There is one tactic which Langleys have recently used to insurers’ advantage: we have recently succeeded in making an application to the court to lift an indefinite stay and set directions whilst keeping the claim within the parameters of the portal (and importantly, with applicable portal costs). We recommend that this approach is considered in any case where the claimant’s solicitors are languishing. A word of warning however, the outcome of such an application can vary depending on the judge. For example, we have seen one judge lift the stay and order directions but, at the same time, remove the claim from the portal process thus entitling the claimant to costs outside the portal regime.

One final aide memoire, we have also seen some claimant’s solicitors commence part 7 proceedings at the expiry of limitation rather than follow the portal process. Such tactics should be challenged. The claimant’s solicitors should be reminded that the proper course of action would be to commence part 8 proceedings, thus limiting them to portal costs.

Interim settlement packs

Claimants often use incomplete medical evidence as a reason to commence part 7 proceedings where a claim should otherwise remain in the portal. This is simply a mechanism for increasing costs.

Paragraph 7.11 of the Protocol states that where further medical evidence is required (for example where a prognosis cannot be determined until a later date) the parties should agree a stay for a reasonable period while that evidence is obtained. Should a court order be required due to limitation, an application can be made but the claim remains within the portal.

Late Acceptance of an Offer

The court has now ruled several times (McKeown v Venton (2017) for example) that late acceptance of an offer where a matter has exited the portal and is proceeding under the Protocol would not give rise to the claimant’s costs being assessed on the standard or indemnity basis. It is now established law that the fixed costs regime is the appropriate tool for determining costs unless there was a specific and prescribed reason for departing from CPR 45.29.

One of these specific and prescribed reasons for departing from the fixed costs regime is where there are “exceptional circumstances”. In Hislop v Perde (2018) the claimant sought costs on the indemnity basis due to the defendant’s 16 month delay in accepting the claimant’s pre-action Part 36 offer. The delay had resulted in litigation and both parties undertaking significant trial preparation. The court of appeal was satisfied that there was no justification to award assessed costs (standard or indemnity) as the delay, whilst long, was not out of the norm and the circumstances were not therefore “exceptional”.

Pre Action Disclosure

The fixed costs regime also applies in interlocatory applications. In Sharp v Leeds City Council (2017) the court determined that where an application for pre-action disclosure was made in a claim which had exited the portal and proceeded under the fixed costs regime set out in CPR 45.29 the costs of that application would be limited to the fixed costs set out in rule 45.29. There would be no separate assessment of costs on a standard basis. The Court of Appeal was alive to the possibility of pre-action disclosure applications being used in low value claims to boost overall costs, which the court found was against the spirit of the protocol.

Summary

The low value claims process was introduced for a purpose: to streamline the handling of personal injury claims and to reduce overall costs. The message from the courts is largely that the letter of the Protocol is to be followed and attempts to circumvent the protocol to maximise costs will not be tolerated. Nonetheless, legislative improvements could be made to the Protocol and to the portal process as a whole to help drive claims to a timely conclusion when some claimant firms might simply be happy dawdling.

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