Building on earlier decisions, Horwich Farrelly and Admiral successfully strike out claim for £760k which was deliberately ‘parked’ in order to deny insurer the opportunity to investigate

The initial claim, made by part-time company secretary, Belinda Tandara, 42 at the date of the incident, came after a road traffic accident (RTA) in Edgware, North London, in March 2012. Mrs Tandara instructed Camps solicitors and liability was admitted. Within one month, she was examined by a medico-legal expert who diagnosed soft tissue/whiplash injuries to her neck and back together with  headaches and anxiety, all of which he considered would  resolve within 3-6 months.

Her injuries however, did not resolve, and subsequently, in February 2015 and almost on the cusp of limitation, her solicitors issued protective proceedings. These were issued under the provisions of CPR 8 in accordance with the Pre-Action Protocol for Low Value Personal Injury Claims in RTAs.

The Protocol (at that time) was concerned with, and related to, claims which did not exceed £10,000. Pursuant to Practice Direction 8B paragraph 16.2 the proceedings were almost immediately stayed by an order dated 5 February 2015.

This stay however, was not lifted until more than four years later when, by an order of 26 March 2019, the proceedings were transferred to Part 7 and consequential directions were given for the service of Particulars of Claim and a Defence. By this time, Mrs Tandara had changed solicitors and was represented by Taylor Rose.

In May 2019, Mrs Tandara served a Claim Form and Particulars Claim together with a Provisional Schedule of Loss. The statement of value endorsed was for “an unlimited sum in excess of £500,000,” and the Preliminary Schedule of Loss valued the claim, now some seven years and two months after the accident, at a little over a staggering £760,000.

No warning, notice or previous information had been given to Admiral or Horwich Farrelly for this extraordinary increase in the claim’s value. Indeed, for most of its existence, both had understood it might potentially have been settled for not much more than £10,000.

Considering the revised value of the claim and the manner it which it had been conducted to be grossly unfair, Horwich Farrelly advised Admiral to issue an application to strike it out as an abuse of process. Today (29 July) that application was granted in the Central London County Court.

Speaking for Horwich Farrelly, Large Loss Partner Tony McLoughlin, said: “Our application raised important issues on delay generally and also specifically on those cases which are deliberately or inadvertently kept in the Protocol process, despite their value substantially exceeding the upper limits. This practice denies insurers and their solicitors the ability to conduct investigations and set suitable reserves. This judgment sounds a stark warning to claimant solicitors who adopt this tactic that the courts will, in appropriate cases, exercise their case management powers robustly and strike out claims as an abuse of process.”

“It further demonstrates that Horwich Farrelly will vigorously challenge the conduct of claimants and their solicitors where court processes and rules are manipulated in order to unfairly disadvantage insurers.”

Adding that the facts of this case bring it within the orbit of two others which have addressed similar issues (Lyle v Allianz Insurance plc [2017] (A00CH865 Chester County Court) and Cable v Liverpool Victoria Insurance Company Limited [2019] (D34BI037 Liverpool County Court), Senior Associate James Devenny added: “The ‘parking’ of claims in the MOJ/Part 8 process is a commonly encountered issue and a source of considerable frustration to motor insurers. It prevents an open exchange of information about cases and denies insurers the ability to investigate claims and make informed decisions, including offers of rehabilitation or settlement.”

Full judgment on this case can be found here.