Legal costs in property damage claims
One of the areas of costs I deal with arises from property damage claims; typically following fire, flood or tree root damage.
Although these claims are usually pursued in the name of the owner of the damaged property, in reality these are subrogated claimed being brought by the insurer of the property owner and seeking to recover the money they have already paid to the property owner to make good the damage done.
Unsurprisingly, the claimants’ insurers tend to instruct the firms of solicitors they already have working relationships with. Many of these claims are brought with the benefit of conditional fee agreements. There is often something rather tricksy about this whole process. These are claims that traditionally would have been resolved between the loss adjusters for the respective insurance companies with no legal costs incurred in the process. Instructing solicitors from the outset simply adds an unnecessary layer of costs to the process.
Nevertheless, given the solicitors instructed are usually insurer panel firms – familiar with the inflated costs claims presented by claimants’ solicitors in personal injury claims – one might hope that they would adopt a more sensible approach when submitting their own costs claims in these property damage claims.
In my experience, insurer panel solicitors are often the guiltiest of submitting grossly inflated, and barely plausible, claims for costs in these property damage cases. I have yet to decide whether this is due to:
- Deliberate dishonesty having found themselves on the end of a positive costs order and therefore trying to milk the other side for whatever they can get away with; or
- Evidence of spectacular inefficiency in the handling of relatively routine claims.
Either way, it does not seem the ideal way to promote the firms in question. If I was an insurer faced with these grossly excessive claims for costs from these firms, I would never dream of placing them on my own panel in the future. I would assume that if they charged me even half as much on a solicitor/own client basis that they would still be overcharging me by at least 100%.