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Abuse of Process: Credit hire brought outside of the MOJ portal: Poku v Abedin - Amrit Atwal, Park Square Barristers

01/03/21. Your claim is an abuse of process. No, your application is!

This is an appeal in the matter of Poku v Abedin [2020] by the Claimant against a decision by DDJ Omoregie in which a claim for credit hire was struck out on the grounds that the claim was as an abuse of process. The Claimant had previously raised and settled a personal injury claim through the RTA Portal without including the credit hire charges. The appeal was heard on the 8th October 2020 before Her Honour Judge Backhouse sitting in the RCJ.

Striking out a claim on the grounds of abuse renders any outstanding hire claim null and void against the Defendant. The relevant background of this appeal is similar to many strike out applications. The Claimant, following a road traffic accident on the 2nd May 2017, instructed her solicitors to pursue a claim for personal injury. On the 10th May 2017 there was an intimation by Auxillis to Eldon Insurance, the Defendant’s claims handlers, that there was a claim for credit hire, the Claimant having entered into a hire agreement with the hire company.

On the 23rd May 2017, Eldon Insurance sent an intervention letter. Hire ended on the 25th July 2017. Eldon instructed Validus as their agent to negotiate the hire claim. Auxillis on the 8th August 2017 wrote to Validus requesting payment for the hire charges incurred.

On the 4th September 2017, the Defendant made a payment to E-Sure Insurance, the Claimant’s insurer, for vehicle damages. Her solicitors IMe Law pursued a claim for PSLA and on the 5th September 2017 via the Portal by submitted a CNF.

By the 14th September 2017, the Defendant had admitted liability and by the 25th October 2017 a stage 2 pack was submitted and an offer to settle the PSLA for the sum of £1700 was accepted. On the 27th November 2017 a letter before action was sent by Auxillis and proceedings issued on the 11th December 2018.

What is of great importance here is that in the background the Claimant had at all times notified Eldon and their agents Validus of the hire claim. In both the initial CNF and stage 2 pack the Claimant stated that no hire was being pursued.

The appeal was successful as the DDJ failed in the first instance to consider the entire circumstances of the communications between the parties prior to the CNF. “However, in my judgment, the DDJ did not, despite referring to Johnson v Gore Wood, conduct the necessary broad merits-based judgment, taking into account all the circumstances.” (para 46). There had not only been the intimation of a claim but also an intervention letter and a request by Eldon that the Claimant’s representatives deal with Validus for the hire only.

As such, it was abundantly clear to the Defendant that the CNF and stage 2 pack claim were wrong, and that there was a hire claim. The Court when considering the balancing exercise decided that the Defendant should not benefit from the Claimant’s failures and the letter from Eldon sought to exploit the error. As such the judgement was set aside.

Overall her Honour Judge Backhouse made it clear that the entire correspondence, including the invitation from the Defendant insurer Eldon that the claimant should negotiate the credit hire claim with its agent Validus, should be taken into account when considering whether subsequent proceedings which might be brought in respect of the credit hire are abusive of process; the contents of the CNF should not be considered in a vacuum . Peter Jerman from Principia Law, who attended the appeal hearing advised me Her Honour Judge Backhouse was very interested in the lack of definition within the portal rules about what constituted industry agreement cited in 6.4 of the rules about vehicle related losses being excluded from the ‘Portal’.

In the event the learned judge at first instance was wrong and there was no abuse of process and it would not be proportionate to strike out the claim as the Defendant was not misled in any event.

It is important to consider in abuse of process arguments, firstly whether the parties were made aware of a hire claim prior to settlement, and secondly the terms of the settlement. If there has been correspondence between the parties are actively engaging in narrowing the issues or making offers of settlement for the hire charges then it is vital to ensure that one party does not exploit another party’s failure or error to notify credit charges in a CNF. This is an important judgment with respect to the abuse of process arguments which crop up in credit hire and personal injury claims. It does not address the issue of compromise.

In another first instance case, Bashir v Reith* DJ Harrison was critical of the tactics employed by Eldon.

It seems to me that that is nothing but Eldon Insurance Services realising the potential error that had occurred, and / or seeking to obtain a windfall when they were aware all along that hire charges did form part of this claim. (Para 30)”

There are further substantial Court of Appeal cases listed involving the same issues this month regarding similar alleged abuse of process in bringing credit hire claims following PSLA claims being settled. Definitely an ongoing saga.

Like Covid, This issue is far from being over.

Amrit Atwal
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