A Court of Appeal judgment has limited the recovery of premiums and other fees charged by The Accident Group (TAG) and its panel of solicitors to claimants in thousands of injury claims.

Law firm Beachcroft Wansbroughs said Lord Justice Buxton had upheld the decision of Senior Costs Judge Master Hurst.

Buxton ruled that:

  • Of the premiums charged for after-the-event legal expenses insurance of £840/£997.50 (depending on the year of cover), only £450 (for 2000) or £425/£525 (for the two 2001 schemes) could be claimed from the defendant, and;
  • The so-called investigation fees claimed by solicitors on TAG's panel and deducted from claimants' damages were, in fact, referral fees, and were therefore illegal and could not be claimed from defendants or from the claimants themselves.
  • The Court of Appeal upheld many of the judgments delivered by Master Hurst in May 2003. Beachcroft Wansbroughs said the court had gone as far as suggesting the claimants should not have brought the appeal.

    "The Court of Appeal has sent a clear message to these bulk schemes, as to the limits on what can be recovered from the paying party," said Andrew Parker, head of strategic litigation at Beachcroft Wansbroughs, acting for a group of liability insurers defending the appeals.

    "We did not challenge Master Hurst's decision and the Court of Appeal has made it clear that parties should think carefully before trying to appeal in such cases, unless there are clear issues of legal principle."

    In TAG test cases, a series of legal costs claims were brought together before the senior costs judge to determine how much should be paid in costs under new rules for 'no-win, no-fee' agreements brought in by the Access to Justice Act 1999. The claimants' damages had all been agreed and paid by the defendants' insurers some time ago, said Beachcroft Wansbroughs.