Insurers welcome Claims Direct judgment

Insurers have welcomed Senior Costs Judge Master Hurst's decision on Tranche 2 of the Claims Direct Test Cases, handed down this morning.

Tranche 2 dealt with disbursements and payments under the Claims Direct scheme.

The case is important, despite Claims Direct's administrative receivership, because it will apply to all similar claims management schemes.

The Claims Direct claimants had argued that the £395 payment to Medical Legal Support Services by their solicitors could be recovered from the insurers.

They said the payment was for the services of a claims manager.

However, Master Hurst said the payment was a referral fee, which was unlawful.

"The solicitor cannot charge his client for it and the defendants do not have to pay for it,' he said.

The claimants' appeal against Master Hurst's Tranche 1 judgment, which dealt with the level of recoverable premium, was head by the Court of Appeal on 18-19 December.

A judgment is expected soon.