Claims Direct has been unable to recover a disbursement incurred by its appointed panel of solicitors after a Manchester County Court ruling.
The court said that the disbursement was unrecoverable as the initial instructions were in fact given by Claims Direct and not the solicitors.
The claims managers had attempted to recover fees for their time as agents acting through Medical Legal Support Services.
Keith Popperwell, Technical Legal Insurance Consultant at Liverpool solicitors Silverbeck Rymer, instructed by Highway Motor Policies, said “It was clear that the enquiry agent had been instructed prior to the claimant formally appointing solicitors to handle his claim.”
“In the circumstances, I could not see how the disbursement had been incurred by the solicitors, rather than Claims Direct, who as a claims handling company cannot carry out litigation and so cannot recover the costs of litigation.
“The District Judge who heard the claim from Claims Direct's solicitors for the costs of the matter agreed.
“He said that the contractual arrangements between Claims Direct and their panel solicitors abrogated all professional discretion from the solicitors to Claims Direct.”
The decision is not formally binding on any court but Silverbeck Rymer said it will be persuasive and influential.
Popperwell hopes that the matter will be further considered by the courts, and commented: “This decision, and the Judge's reaction to the Claims Direct approach, goes to the heart of the Claims Direct system for processing claims. Its implications for that system, and Claims Direct's relationships and contractual arrangements, are very significant.”