The Law Society has encouraged solicitors to consider taking action against insurers who settled personal injury cases directly with their clients without paying their fees.
It comes following yesterday’s Supreme Court ruling, which upheld the Court of Appeal ruling that Haven Insurance should pay Gavin Edmondson Solicitors what it was due.
The Law Society intervened in the Supreme Court, making written representations.
President Joe Egan said solicitors “may now wish to consider whether they have any claims against insurers who took action similar to Haven”.
He added: “The society intervened in this case because we believed this was an important point of principle for the profession.
“This judgment is good news for our members. It confirms that solicitors will have a remedy to recover their costs in these circumstances where an insurer has tried to avoid payment by going to the claimant direct.
“It will also be good for consumers as it reduces any incentive for insurers to go directly to claimants, cutting solicitors out and therefore losing the protection a solicitor brings in representing the client in a claim.
“The case is also a useful confirmation given the expected broader application of fixed recoverable costs regimes in the future.”
Haven issued a bullish response to the decision, urging claimants to come to it directly without solicitors.
Claims director Joe O’Connell said: “While we are naturally very disappointed by the decision, this case was not about whether insurers should settle directly with claimants. It was only about the claimants’ solicitors’ costs and it turned on a technical analysis of their retainers.
“The court did not criticise Haven in any way and there has never been any suggestion that the underlying claimants received any less than the compensation to which they were entitled.
“In fact, Haven believes that they received more than they would have received had they settled their claims through solicitors.”
He made these comments even though the Supreme Court said that once an insurer knew that a claimant was represented by solicitors acting under the RTA protocol, “they have the requisite notice and knowledge to make a subsequent payment of settlement monies direct to the claimant unconscionable”.
Mr O’Connell added: “Haven has always acted fairly towards claimants and will continue to do so. We believe that it is in claimants’ interests to settle directly with us and we will continue to provide an excellent service to those who choose to do so.
“Claimants who deal directly with Haven will resolve their claims more quickly and are likely to receive more in compensation than they would if they involved solicitors, particularly as solicitors will deduct up to 25% from claimants’ damages to cover success fees and other legal costs.
“Haven strongly believes that every claimant has the right to decide how to deal with their own claim and that claimants should not be forced to use solicitors. We encourage any claimant to speak to us before committing themselves to instructing solicitors.”