SCCO Ref: CCD 0704180
SUPREME COURT COSTS OFFICE
London, EC4A 1DQ
B e f o r e :
| WILLIAM ELSTONE
Mr D. Stacey instructed by Keelys Solicitors Defendant
Hearing date: 6 September 2007
Crown Copyright ©
"4(1)Before a conditional fee agreement is made the legal representative must – (a) inform the client about the following matters…
(2) Those matters are…
(e)whether the legal representative considers that any particular method or methods of financing any or all of the costs is appropriate, and if he considers that a contract of insurance is appropriate or recommends a particular such contract…
(ii) whether he has an interest in doing so."
The evidence of Mr Powell
i. 'in your case, we consider that before any court proceedings are issued, you must take out an insurance policy to protect you against the risk that you will have to pay the other side's costs; we are members of Accident Line Protect, the only insurance scheme recommended by the Law Society. If we take on your case, it is a condition of Accident Line Protect that we issue an insurance policy at the very beginning of your case; the Accident Line policy will provide you with at least £100,000 worth of cover – more than enough for most actions…we have no financial interest in making this recommendation.'
2. 'Powell Forster is a small two-partner personal injury and housing practice in South London. Our work has predominantly been legal aid housing work, mostly for public sector tenants. However, a small part of our work relates to personal injury cases.
3. 'Since 12 November 2003, my firm has opened 292 cases of which 75 are personal injury cases and 15 were referred to my firm by Accident Line Protect. This means that 20% of our personal injury files were referred by ALP, all of the others coming from other sources, either direct contact or referral by other solicitors or advice agencies, but a mere 5.14% of all work carried out in the past 3½ years is work referred to us by ALP.'
The evidence of the Powell Forster website
'In personal injury cases, we will arrange legal costs insurance for you at the very outset of your case. This will protect you against having to pay your opponent's costs if you lose your case at trial. The premium for this insurance is reasonable and you will only have to pay it, if you win your case. We are members of Accident Line Protect, the only delegated insurance scheme approved by the Law Society. We insure all eligible personal injury claims with this scheme.'
Evidence set out in the Myers case
(a) Accident Line was set up in 1995 as an alternative method of financing legal proceedings to legal aid.
(b) The scheme is managed by Abbey Legal Protection an FSA authorised insurance intermediary.
(c) It is said to be a' membership scheme' not a 'panel' arrangement.
(d) The Accident Line referral service began on 1st October 2000 as "as an additional benefit for Accident Line members."
(e) Membership of a panel meant that after the event insurance could be issued on a delegated authority basis.
(f) Wiseman Lee's membership would have continued regardless of the referral scheme.
(g) The membership of Accident Line includes additional services such as access to practice funding; marketing support services, information and training; and 'referrals at no additional cost.'
(h) Unlike claims management companies, there is no contractual relationship at all with an injured person who may make contact with the Accident Line call centre.
(i) The call centre will take details from the injured party and then send the information gathered on to the nearest member solicitor. It acts as a signpost to the most appropriate level of specialist solicitor. No fee is paid or payable to Accident Line by the member solicitor for an individual referral.
(j) There is no contractual obligation to insure referrals or even to accept them, only to give independent advice on both the merits of the case and funding options in accordance with the Accident Line 'standards charter'.'
(k) 0.1% of all cases opened by Wiseman Lee were referred from ALP
(l) Less than 4% of personal injury claims opened were referred by ALP
The appropriate test
(1) Did Powell Forster have an interest which they were required to disclose to their client?
(2) If yes, did Powell Forster disclose it?
(3) If there was a failure to disclose in accordance with Regulation 4(2)(e)(ii), did that failure have a materially adverse effect on the protection afforded to Mr Elstone or on the administration of justice so as to render the CFA unenforceable?
Did Powell Forster have an interest in recommending the ALP policy?
'Powell Forster are not required to insure ALP referrals, whether by contract or otherwise, or even to accept them. Any obligation to insure comes only after Powell Forster have taken on the case on a CFA, but the client is not obliged to instruct us on a CFA basis. Referring back to the points of dispute, the simple answer is that Powell Forster are not 'required to recommend purchasing the ALP ATE insurance in return for the continued referral of cases to the solicitor.'
If there was an interest, did Powell Forster disclose it?
Had there been a failure to disclose, would such a failure have had a materially adverse effect?