Insurers in victory over legal costs for catastrophic claims

Insurers could be set for lower legal costs for catastrophic claims following a victory over the recoverability of costs for attending inquests in the civil courts.

Previously claimant lawyers were able to claim huge fees for attending the inquests, but these will now be limited under new rules following a decision from the Senior Courts Cost Office.

The decision comes following a challenge to costs in the case of Lynch vs Chief Constable of Warwickshire Police, Warwickshire County Council and Coventry and Warwickshire NHS Trust where inquest costs of £750,000 were sought for recovery by the claimants, an amount that equalled nearly half of the entire costs for the case.

The defendants argued successfully that these costs were disproportionate and the level of attendance by the claimant legal team at the inquest was unnecessary.

The judge decided that that costs such as housekeeping; pre-inquest hearings or procedural matters are irrelevant to the civil claim and are therefore not recoverable. This also includes time spent summing up, witness evaluation, questions to the jury and the verdict itself.

Hill Dickinson head of costs Paul Edwards, who defended the case, told Insurance Times that this will stop the claimant lawyer ‘gravy train’ and cut costs for insurers.

“Running alongside a lot of cases that involve a death there is an inquest and the cost of attending the inquest [has previously been recoverable] because it was considered evidence gathering,” he said. “That opened up a gravy train for claimant solicitors where they felt they were given authority to send along big legal teams to these inquests.

“Insurers who deal with catastrophic injury work were then facing claims where the costs of the inquest were regularly more than the damages and often more than the actual costs of the case itself.

“Hopefully this will bring some common sense to the way claimant lawyers deal with these things [and help drive down costs].”