Thousands saved for insurer as court provides clarity on issue of proceedings

10 Aug 2015

Bobby Prior v Silverline International

 

BLM successfully appealed a costs decision for Allianz Insurance (Allianz), saving thousands for the insurer and sending an important message to claimants about when it is reasonable to issue court proceedings.

In Bobby Prior v Silverline International the claimant issued proceedings, claiming the defendant did not respond within 21 days of disclosure of medical evidence. The claimant submitted costs seven times more than would have applied if proceedings had not been issued.

Birkenhead County Court originally found in favour of the claimant, believing that the defendant should have done more to ensure the response it had issued had been received. A Liverpool Senior Circuit judge disagreed and overturned the original decision, finding in favour of the defendant.

The ruling acknowledged the proactive steps taken by Allianz to resolve the dispute and rejected the claimant’s argument that in high volume low value personal injury cases it is reasonable to adopt a ‘tick-box’ process to the issue of proceedings. The Senior Circuit Judge stressed that the proportionality of issuing proceedings must be considered before doing so, even if a party might be technically entitled to do so.

BLM costs lawyer, Cham Dhooper and partner Adam Burrell advised Allianz. Adam Burrell commented: “The issue of proceedings in cases such as these is unreasonable, and it is extremely pleasing to be able to have a positive decision from the Designated Civil Judge in Liverpool. It is often very difficult to overturn such decisions at appeal level.

“It is simply not good enough for computerised processes to dictate the circumstances in which proceedings can be issued. This decision is a good example of a robust stance against unreasonable attempts to maximise costs without stopping to think whether claims can be resolved in a more fair and just manner, ensuring that costs are recovered in a reasonable fashion.”

Nick Kelsall, Technical Claims Manager at Allianz, said: “This is a very important and positive case for the wider insurance market. I hope it is used by the industry as a great example of tackling the problem of premature unjustified legal proceedings. It’s great to see the courts taking a more proactive approach to such claims; that may be due to increased claimant activity or due to improved processes and proactivity on behalf of the insurance industry.

“As an insurer, we are in the business of paying genuine claims; we want to pay a fair level of damages, quickly and with the personal touch. That said, when we need to stand firm and fight on a particular issue we will. What is clear is that no one benefits from such aggressive behaviour and a cooperative and consensual approach to handling claims remains paramount.”

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Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to customers of BLM. Specialist legal advice should always be sought in any particular case.

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Adam Burrell

Adam Burrell

Partner and head of Costs,
Birmingham


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