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Exiting the Portal – reasonable

Insurers should be very careful about making allegations (for instance, at Stage 2 of the EL/PL Protocol), especially if they could be interpreted as allegations of ‘dishonesty’.

Raising issues of causation and credibility may justify the claimant in reasonably exiting the Portal, and issuing proceedings under Part 7 (rather than Part 8).

This is illustrated by a case involving a finger injury. At Stage 2 the insurer argued there was no evidence that the finger was injured in the accident, and it could have been injured elsewhere. Accordingly, the claimant started proceedings under Part 7, with the claim being settled shortly after the defence was filed. But, what costs should be paid – assessed costs under Part 7, or fixed costs under Part 8? At a provisional assessment, the judge held the exit from the Portal was reasonable; that was confirmed at the oral review, and also upheld by the civil judge. In his view, the issue of whether the finger was injured or not was a ‘significant issue of fact’ which meant the matter was not suitable for Part 8. The claimant’s honesty and credibility has been put in issue – a potential finding of ‘fundamental dishonesty’ was disproportionately significant. In short, while it was right for insurers to be sceptical, they could not complain if they raised such issues and then found the claimant elected not to proceed under Part 8.

The lesson for insurers is clear: allegations relating to causation and credibility should only be raised when they fully consider the potential costs consequences. See note on Nicholls v The Ambassador Theatre Group [2018] (unreported) but noted in [2018] 166 Personal Injury Law Journal 24.

 

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