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Friday 11th March 2005
Samonini v London General Transport Services Limited (Senior Costs Judge Hurst, SCCO, 19th January 2005)
Mr S was a taxi driver who had a modest personal injury claim following an RTA. Mr S entered into an agreement with a claims management company which involved taking out ATE insurance with a premium of £798. The claims management company referred the matter to Solicitors on the basis that Mr S did not have any pre-existing legal expenses insurance cover. Mr S’s Insurance Broker also confirmed this fact. Mr S recovered just over £1,800 for damages. However on Detailed Assessment the Costs Officer disallowed his costs on the basis that it had not been shown that before after the event insurance had been taken out, and a Conditional Fee Agreement entered into, proper enquiries had been made into whether Mr S’s liability for costs was covered by any pre-existing insurance.
At the Appeal the Costs Judge, citing Sarwar and Culshaw, held that the enquiries made of Mr Samonini had been inadequate because he had only been asked about his motor policy, but not any other source of BTE insurance. The costs Judge held that this breach of regulation 4(2)(c) was material, even though no BTE insurance had subsequently been identified. Mr Samonini had entered into a CFA, loan agreement and ATE insurance policy which imposed substantial irrecoverable liabilities in a modest claim. The ATE premium of £798 was on the face of it disproportionate to damages of £1,814. The solicitor was under a duty to carry out ‘careful investigation as to alternative sources of insurance.’ As this had not been done no costs were recoverable.
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