Supreme Court Costs Office
The Issues: The CFA Regulations (subsequently abolished in full in November 2005) required the Claimant’s solicitor to make enquiries (amongst other things) as to the existence of “Before The Event “BTE” insurance. Costs were disallowed at detailed assessment on the basis that proper BTE enquiries had not been carried out before a CFA had been entered into. The claims management company who had referred the Claimant to his solicitors had made enquiries and were told the Claimant did not have BTE under his car insurance and this was confirmed by his insurance brokers, but no one asked about household insurance or asked to see his motor or household policies. The Claimant had made a modest claim for personal injuries following an RTA and had purchased an ATE policy, costing £798.
(1) The solicitor had not made his own enquiries as to any pre-existing BTE, but had relied entirely on information provided to him by the claims management company. This was insufficient to comply with reg. 4(2)(c) of the CFA Regulations 2000 (repealed in Nov 2005). Even though there was no evidence that a BTE policy existed, the failure of the Claimant’s solicitors to investigate this properly had a material adverse effect on the protection afforded to the Claimant and the CFA was unenforceable.
(2) The ATE insurance premium was on the face of it too high for a straightforward RTA, and it was therefore appropriate for the Court to go behind the signature on the bill, and examine the makeup of the premium in detail.
(1) This case has relevance only to CFAs signed before the 1 st Nov 2005.
(2) It is important to note that the Claimant did not in fact have a BTE policy – the mere failure to check the position was a breach of the CFA Regulations which applied at the time.
(3) Where there is a suspicion that a CFA is unenforceable because of a failure to comply with the pre 1 November 2005 Regulations (eg. to properly investigate the possibility of BTE insurance), the recent case of Forde v Birmingham CC (2009) may be relevant. Here the High Court allowed recovery of costs under a second, retrospective, CFA, which was entered into because of doubts over the validity of the first CFA.