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Ali v Ali & Provident Insurance Plc, Oldham County Court

23 April 2003
The issues

Fraud – Wasted Costs Orders – Late Discontinuance

The facts

The Claimant started an action for personal injuries following a road traffic accident which he said occurred on 16th July 2001. He instructed Jacksons Solicitors. The Trial was listed at the Oldham County Court for 16th January 2003. On 10th January Jacksons served a Notice of Discontinuance which was received by the Defendant’s solicitors on Tuesday 14th January. The Judge accepted that by 30th October 2002 it should have been apparent to Jacksons that the Defendants were suggesting that the claim was fraudulent.

When the Notice of Discontinuance was served it was clear that the Claimant had accepted that his claim was fraudulent and that there had been no accident in which the First Defendant had been a driver. Jacksons had indicated that they would assist in any enquiries in the event that the Defendant’s reported the matter to the police and further requested that any costs claimed should be directed to the Claimant because the legal expenses insurer would refuse to indemnify.

The Defendant had previously had an interim payment of £3,150.00. The Defendant’s solicitors pointed out the Notice of Discontinuance was not effective and that the claim could not discontinue without the consent of the Defendant or the Court’s permission. The case proceeded on 16th January 2003. Neither Jacksons nor the Claimant attended and the matter was adjourned to 12th February. An Application had been made for a wasted Costs Order against Jacksons. An Order was made requiring the Claimant to re-pay the interim with interest and requiring the Claimant to pay Second Defendant’s costs of the action on the indemnity basis to 30th October 2002 with the issue of costs thereafter to be reserved.

The decision

1. Discontinuance – The Claimant had received a voluntary interim payment. It had been paid by the Provident as motor insurers either in their own interest or on behalf of their supposed insured.

At the time of the Notice of Discontinuance they were Second Defendant. Part 38.2 restricted the right to discontinue in circumstances where an interim had been made unless the Defendant who had made interim consented in writing. There was no doubt that the Claimant had not therefore properly discontinued.

2. Wasted Costs – Jacksons had negligently failed to pursue the action in accordance with the Orders made for the service of evidence or obtain additional time for compliance at a time when it was or should have been clear to them that further enquiries needed to be made with regard to rebutting evidence clearly directed at submissions of fraud.

3. They failed to serve a proper discontinuance and in any event the purported discontinuance did not reach the Second Defendant’s solicitors until 14th January, two days before the Trial.

4. They had failed to appear at the Hearing on 16th January although they were still on the record. Costs had been wasted by the Second Defendant after 30th October 2002 in the sense that the Claimant had either to face up to the evidence against him and either rebut it or discontinue.

It was just in all the circumstances to order that the legal representative rather than the Claimant pay the Second Defendant’s costs after 30th October 2002 up to and until 16th January 2003. Those costs were to be paid on an indemnity basis between 16th January and 12th February 2003 the costs would be paid by Jacksons but on the standard basis.

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