02 September, 2020
As an Insurer or claims handler, even if you do not deal with the Personal Injury Portal, you need to be aware of the issues raised here for cases that start off in the portal but increase in value.
The cynic in me wonders how often claimants and their advisors have tried to use the portal process to secure an admission of liability, whilst being aware that they had a larger claim for more than the portal limit of £25,000. This is a potentially dangerous tactic since the 2019 case of Hammond v Sig PLC heard by the Senior Courts Costs Office which made it clear that the fixed costs regime applied to a case that started in the portal, dropped out and settled for £36,500 but which had not yet been allocated to the multi track.
Another concern is those claims that commence in the portal, liability is admitted, and then nothing happens. Can that be an abuse of process? The answer is that it can be, but what are the consequences?
The recent Court of Appeal case of Cable v Liverpool Victoria Insurance  EWCA Civ 1015 looked at exactly that issue when the claimant was found to have abused the portal process. Should the claim be struck out, as the lower courts found, or was a lesser sanction appropriate?
The Claimant was injured in a traffic accident in September 2014. His solicitors submitted a claim through the RTA Portal as it was not apparent that the claim was worth more than £25 000 at that stage despite him having some complications with his injuries. Liability was admitted. In December 2015 the claimant's employment was terminated as he had been unable to return to work post-accident, although a medical report in January 2016 indicated that there would be no long-lasting damage. However, a year later a further medical report stated his condition to be chronic and he was described as being in a "severe neurological state". These medical reports were not disclosed at that time, and the claimant's solicitors simply issued a claim under CPR Part 8 in July 2017 without having gone through the stage 2 portal settlement process. Nor did they seek to drop the claim from the portal due to value exceeding the limit of £25 000. At the same time as issuing proceedings under Part 8 an application was made for a stay to enable compliance with the portal due to limitation approaching, which was granted. The court ordered a stay until 20 August 2018 and ordered that the order for the stay and the claim form was to be sent to the defendant by 20 August 2017 when limitation was due to expire. It was not sent until February 2018 by which time the claim had been allocated to the claimant's solicitor's multi track team. It was not until August 2018 that the medical reports were disclosed, and the defendant was told about the termination of the claimant's employment. When the stay was lifted later in August 2018 the claimant was ordered to serve the amended claim form and particulars of claim by 5 September 2018. It was not served until the 26 September by which time the claimant was seeking damages of £2.2 million.
Not surprisingly, perhaps, the defendants sought a strike out on the basis that there had been an abuse of process, which was granted at first instance. Even if the claim value was not apparent when the claim was submitted in the portal, the court found that it certainly was by the time they issued the Part 8 claim, so they ought to have issued under Part 7. Also, they applied for a stay when they knew it was not applicable. The purpose of a stay in these circumstances is to allow time for the matter to progress through to the portal stage 2 settlement or a stage 3 hearing. It was obvious that this was not a case that was ever going to be taken through those stages as its value fell far outside the £25 000 limit. The claimant had been earning £130 000 a year so once he had been unable to work for even a couple of months his loss of earnings claim alone took the claim above that level.
The matter ultimately went to the Court of Appeal who agreed that there had been an abuse of process. However, they disagreed that a strike out was the correct sanction in this case. They said that they had to balance the prejudice to each of the parties in deciding the sanction and that a finding of abuse of process does not automatically lead to a strike out as the court below had decided. In balancing the prejudice to each party they found that there was no evidence of actual prejudice to the defendant. Limitation was not an issue either. Conversely, if the claim was struck out the claimant would have to start again outside limitation with a professional negligence claim against his solicitors, with "all the risk and uncertainty, not to say cost, that such a claim would involve". A loss of chance claim is much more risky than a liability admitted RTA claim. The Court of Appeal decided that the correct sanction was that the claimant pay defence costs on the indemnity basis up to the date of the strike out hearing in October 2018 and would be barred from claiming interest on his special damages for the same period.
The Court of Appeal did not say that a strike out would never be the right sanction, so it does need to be considered. However, we suggest that strike out is now going to be unlikely except in the most serious of cases of prejudice to the defendant. That said, with a well-judged part 36 offer, once defendants are aware of the value, then costs in the defendant's favour can be a valuable sanction, when they are offset against damages ultimately agreed or awarded.
However, if a defendant is faced with portal claims that have gone stale then all is not lost. Such claims should be reviewed regularly, and questions asked of the claimants' representatives about the progress of the medical situation and documents sought to try to gauge the realistic potential value. Once sure it is higher value claim an application to force the claimant to serve the stage 2 pack or transfer to part 7 should be considered sooner rather than later so that defendants are not disadvantaged by allowing the claimant to build their claim and evidence without defence input.
For those cases where the claimant is not providing that information you should consider tactics like opposing further stays and at that point seeking to press for the settlement pack or transfer of the claim.
In appropriate cases defendants should seek to limit claimant's costs to portal costs only under CPR45.24 for unreasonably failing to progress the claim.