Litigation Futures features a guest post from Deborah Evans, chief executive of the Association of Personal Injury Lawyers, titled “Can we trust insurers to behave?”. In the context of rising insurance premiums, she called for “a robust examination of the facts” and for insurers to “stop making excuses and sort yourselves out”.
The timing of this post was unfortunate as Litigation Futures’ sister website Legal Futures carries a report this week headed: “Bolton law firm repays insurer £100,000 for ‘systematically inflating’ costs”.
Claimant law firm Asons has apparently agreed to repay more than £100,000 to AXA after admitting to falsely and systematically inflating its legal costs, according to the insurer.
The dispute involved 65 personal injury cases, settled between September 2013 and December 2014, where “Asons overstated the qualifications and experience of its legal staff to falsely inflate the bills sent to AXA”.
In a statement, AXA said: “Asons admitted that they were systematically attempting to present false and misleading information on an organised basis to exaggerate their claim for costs, but Asons denied acting fraudulently”.
AXA claimed the issue came to light following a case in Manchester County Court, where Asons claimed the fee earner working on the case had more than six years of litigation experience, when actually they had less than two. Asons claimed this was an administrative error but the court sanctioned the firm for misconduct.
It may be that AXA were specifically targeted or that, by coincidence, the only claims Asons had during this period were cases where AXA were the insurers. This seems unlikely. A more likely scenario is that, to whatever extent this “exaggerating” of costs was being undertaken, it was across the board against all insurers/Defendants. The report notes Asons agreed to pay AXA more than £40,000 in legal costs as well as nearly £70,000 in damages and interest. If 10% (for example) of costs claims during this period were against AXA, it would suggest potential overbilling totalling £700,000 by one firm during little over a year.
The report does not record to what extent other insurers have been repaid any “overpayments”.
In a statement, Asons said: “We take matters like this very seriously. Following a complaint by AXA, an internal investigation was immediately undertaken. We reported the matter to our regulator and any overpayments were returned. New procedures were instigated and we are satisfied that there has been no recurrence of the historical issues raised by AXA.”
An appropriate procedure might be to require any bills or statements of costs to be signed off with a statement of truth or certificate of accuracy.
Given this problem came to light following a case going to court and where the court appears to have made an adverse finding as to conduct, to have got that far would have required either a signed Statement of Costs or certified and signed Bill of Costs. What other “procedures” can be put in place if fee earners are prepared to certify inaccurate claims?
But at least the judiciary can happily continue with the fiction of Bailey v IBC Vehicles Ltd  3 All ER 570 CA as though this kind of thing never happens and APIL can continue to blame insurers for any increase in insurance premiums.
You couldn’t make it up.