| |

Expensive cars, taxpayer support, unpaid taxes and inflated costs bills: that'll be a PI claimant's law firm, then.

Editorial Staff

A firm of solicitors which came to prominence because of its owner's predilection for fast cars, big tax demands, grand expansion plans and a secretive grant from taxpayer's funds (see story) is back in the news, this time for "falsely and systematically" overcharging claims for costs in personal injury (PI) cases.

An announcement by AXA, a major insurance company, says that "claimant law firm" (a term that has never sat well with much of the profession and is now almost a dirty word) has agreed to pay GBP70,000 plus interest for "falsely and systematically inflating its legal costs."

Claimant law firms, as they like to call themselves, are what Americans call ambulance chasers: they work on a no-win, no fee basis (a claim that is, in some cases, not strictly true) and often advertise aggressively, join marketing networks or pay for referrals in one way or another. The industry is, in other parts of the profession, generally considered unprofessional, even bottom feeders although some firms make very substantial amounts.

The way they make those amounts is by a combination of a division of damages awarded and orders, including orders by consent, that defendants' insurers pay the plaintiff's (claimant's) costs. Costs can be referred to a court for a process called "taxation," an assessment that has nothing to do with the payment of taxes. Also, where professional misconduct is concerned, paying parties (the client or another party) can refer the bill to the Solicitors' Regulation Authority. That, presently, does not appear to be what AXA has done.

In 2015, at a time when Asons was beginning to run into trouble with the tax authorities, AXA discovered, during taxation, some seven months after the case proper was concluded, that Asons has overstated the experience of the solicitor handling the case and had therefore charged his time on a higher scale than was appropriate. In fact, they overstated his post qualification experience by more than 300 %. According to AXA "Asons claimed this was an administrative error but the court sanctioned Asons for misconduct. " Where courts find misconduct, there used to be a practice where the judge would refer the case to the regulator for the solicitors' branch of the legal profession, now the Solicitors Regulation Authority. It is not clear whether that still happens, this publication suspects not.

As a result, AXA went back over cases settled in a fifteen month period, ending December 2014 when the case had been concluded and found that Asons had over-claimed in 65 cases.

AXA said "As part of the settlement for these 65 claims, Asons has agreed to pay AXA more than £40,000 in legal costs as well as the near £70,000 in damages and interest."

The company issued a strong statement supporting the widespread view of how many so-called claimant firms behave.

“We are delighted to have settled our dispute with Asons and that they have admitted to exaggerating the experience of their legal staff to inflate their legal costs.

“This is just the kind of behaviour that the insurance industry has been highlighting for years now, behaviour that is fuelling a compensation culture across the country. This was a systematic attempt to secure funds that Asons ought to have known they were not entitled to. We hope and expect that this victory sends a strong message to those in the claimant lawyer fraternity who would undermine the reputation of and trust in their profession purely in the pursuit of money.”

Of course, there are honest, decent firms operating in this area but those that have all their eggs in one basket, so to speak, are usually where the problems arise. As the government of England and Wales (which share a legal jurisdiction) is taking steps to reduce the abuse of the personal injury system by individuals who make false or who falsely inflate claims for damages, those firms that specialise, or predominantly specialise, in personal injury cases are finding that their income is being affected and that process is going to continue and will accelerate. Some fill fail, more will merge, many will close. In the meantime, insurance companies have had enough of being a cash-cow and this victory against Asons will encourage others to more carefully check costs claims, to wait until taxation and then ensure that the firm is censured for unsubstantiated claims.

Asons has, it is reported elsewhere, said that the circumstances were entirely innocent mistake and there was no element of fraud.

This report is heavily based on a press release: http://www.axaconnect.co.uk/ne... and is therefore released as free content.