Law Society joins battle over whether third-party capture insurer still has to pay solicitors’ costs

Law Society: Permission granted

The Law Society has been granted permission to intervene in the Supreme Court’s hearing of a case that made a major strike against the practice of third-party capture in personal injury.

In December 2015, the Court of Appeal ordered insurance company Haven – which settled claims directly with the clients of Cheshire law firm Gavin Edmondson – to pay the solicitors the costs they would have earned.

The appeal court said the firm had an interest which equity could protect and which was “deserving of protection”.

In doing so, it overturned the decision of His Honour Judge Jarman QC in Wrexham, who had rejected the firm’s objections to the actions of Haven in settling six low-value road traffic claims so as to avoid paying legal fees.

The Law Society said in a statement: “[We are] intervening because we believe the case has important implications for solicitors.

“We are asking the Supreme Court to confirm that the equitable lien can be applied to protect solicitors’ rights to their costs in modern litigation; particularly in fixed costs regimes where the indemnity principle does not apply.”

In each case, Gavin Edmondson had signed up the client to a conditional fee agreement (CFA) based on the Law Society model and entered the matter on the RTA electronic portal.

Giving the lead judgment, Lord Justice Lloyd Jones said that while the firm had no right to recover fees from its clients under the terms of its client-care letter – which the court found trumped the CFA that said it could – “I consider that in the normal course of events Edmondson would have an entitlement to recover the fixed costs and other sums payable under the protocol scheme.

“This is either an entitlement in Edmondson itself or, alternatively, in the light of the contractual arrangement between Edmondson and its clients [the CFA said the firm could recover its fees from the client in the event the defendant did not pay] an entitlement to bring proceedings in the name of the clients to recover these sums.

“In either case, Edmondson has an interest which equity can protect and which is deserving of protection. It is an interest of which Haven was aware by virtue of its knowledge of and participation in the protocol scheme.”

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