The leading case of Lyle v Allianz demonstrated the opportunity for insurers to seek appropriate remedies when there has been a potential abuse of the Practice Direction 8B process. In response to this, we have developed a successful strategy to force portal claims out of 'incubation' and towards their appropriate conclusion.
Why is this strategy needed?
The Ministry of Justice Portal ("the portal") applies to all employers' liability, public liability, and motor bodily injury claims valued between £1,000 and £25,000.
The claims are progressed in accordance with the Pre-Action Protocols for Low Value Personal Injury Claims for either:
- Road Traffic Accidents or;
- Employers’ Liability and Public Liability Claims.
Practice Direction 8B deals with those claims where the parties have followed the relevant Protocols within the portal, yet have been unable to agree damages before limitation expires.
Paragraph 16 of PD 8B provides guidance in these circumstances. Where compliance with the relevant Protocol is not possible before limitation expires, a claimant can start proceedings under CPR Part 8 stating the stay is required in order to comply with the Protocol.
The procedure works well in situations where both parties are committed to concluding the claim within the Protocol. There are also costs benefits to defendants in enabling such claims to continue, as it removes the need for the claim to exit the Protocol and Part 7 proceedings to be issued.
However the procedure potentially allows claimants to secure a lengthy stay under Part 8, yet doing nothing to progress the claim. This allows claimants to arguably obtain further evidence during this period, even in circumstances where the value of the claim would then far exceed the £25,000 portal limit.
As the first reported example of a challenge to this type of behaviour, Lyle v Allianz involved a transfer of a claim to Part 7, following a stay of over two years, during which it became apparent to the Claimant's representatives that the value of the claim was far in excess of £25,000. Their application to lift the stay and transfer the claim to Part 7 was successful. The Defendant issued an application to set aside that order, and strike out the claim.
The claim was struck out. The Court found that claimants should review the potential value of the claim on a regular basis, giving notice when it appears the value exceeds the upper limit. The failure to give such notice is capable of amounting to an abuse of the process, as "the state of affairs offends against every aspect of the CPR and the overriding objective".
In light of Lyle v Allianz, the basis of our strategy is simple - force portal claims out of their 'incubation' towards a proper conclusion or progression.
We also aim to identify those cases which are not suitable for the portal, and progress them within the appropriate court process without allowing unnecessary delay.
We have developed a simple step-by-step process, with actions to be taken by the case handler each month, concluding with an application to the Court where necessary.
The successful implementation of the strategy where an application to the Court is required also provides much needed guidance on how the courts deal with these issues.
The benefits of the strategy include:
- The actions are cost neutral – costs orders are made in our favour of the successful applications, with no order as to costs on the rare occasion of an unsuccessful application
- Accurate reserving of cases
- Proactive case management
- Reduced life cycle of cases
- Reduced indemnity spend
Since implementing the strategy Clyde & Co has had numerous successes, with 26% of cases struck out or discontinued. Our full results for cases where the strategy has been applied are as follows:
|Stage 2 pack served||50%|
|Claim struck out||23%|
|Claim transferred to multi track||12%|
|Claim transferred to fast track||9%|
|Claimant accepted existing offer||3%|
Authors: Mark Hemsted (Partner) and Michelle Roberts (Volume Motor Unit Manager)