Lyn Rigby and David Fardy recently achieved a fantastic result, striking out a high value claim in a case concerning cross-admissions, the MOJ Portal and the extent of insurer authority. It is a great example of how best to capitalize on decisions made by insurers in bulk litigation due to commercial pressures and the desire to settle as many claims as quickly as possible.
In this case the Claimant commenced a claim against the Defendant in the MOJ Portal, liability was denied and the matter was issued. In the defence we raised that the Defendant had brought her own claim against the Claimant in the Portal, a matter in which the Claimant's insurer had admitted liability on behalf of the Claimant and settled our claim. We applied to have the matter struck out as having no reasonable prospect of success.
The Claimant sought to argue that the admission was invalid because his insurer had admitted liability without actual or ostensible authority from him, not least because the insurer had made the admission without ever speaking to the Claimant himself. The Claimant further argued that the Defendant had been aware that he had brought, and continued to run, a claim despite the settlement of the Defendant's claim, and that the Defendant ought to have made further enquiry of the Claimant because of this.
The District Judge accepted our argument that the insurer had both actual and ostensible authority to make admissions on behalf of the Claimant. Relying on the decision of Chimel v Chibwana (2016), the court held that without seeing the insurance contract itself (which the Claimant had not disclosed) it had to be assumed that the insurer had actual authority to settle the claim. On ostensible authority the court agreed that the conduct of the Defendant had to be seen in the context of receiving claims through the Portal process – a streamlined process dealing with hundreds of thousands of claims – and it was inappropriate to require the Defendant to make further enquiry of the Claimant in those circumstances. Accordingly the claim was struck out and costs awarded to the Defendant.
Correspondence seen in this case indicated that on receipt of the Defendant's Portal claim the Claimant's insurer wrote to the Claimant requiring a response within seven days, otherwise they would settle the claim against him. Whilst this correspondence was clearly sent with a view to minimising insurer costs, this case shows how Defendants can profit from this approach in appropriate cases.
For any questions relating to admissions, Portal claims or insurer authority, please do not hesitate to contact David Fardy
of DWF Advocacy Ltd.