Claims Direct Test Cases Tranche 2 Issues

Claims Direct Test Cases Tranche 2 Issues

The payment of £395 plus VAT to MLSS Ltd is a referral fee, as it is the price solicitors must pay to obtain work, not for services rendered. This payment is a direct breach of Section 2(3) of the Solicitors Introduction and Referral Code 1990 and is irrecoverable from the client and the paying party. Any administration element in fees charged by Mobile Doctors Ltd is also not recoverable. Only work done by claims managers after acceptance of the case, properly evidenced and not duplicative, may be recoverable as a disbursement, subject to assessment of reasonableness and proportionality.

Parties
Claimant: Claimants (Claims Direct Test Cases); Defendant: Defendants; Interested Party: Mr Bruce Stuart (4 Kings Bench Walk); Interested Party: Mr Stephen Seed (Harrington Street Chambers, Liverpool)
Jurisdiction
England and Wales
Judgment Date
03 January 2003
Procedural Posture
Costs Assessment (test Case) / Judgment on Tranche 2 Issues
Outcome
Referral fee to MLSS irrecoverable; administration element of MDL fee irrecoverable; only properly evidenced post-acceptance work by claims managers may be recoverable as disbursement.
Legal Topics
Referral Fees, Solicitors Practice Rules, Disbursements, Recoverability of Costs, Professional Conduct
Legal Profession Regulation Costs Law Referral Fees Solicitors Practice Rules Disbursements Recoverability of Costs Professional Conduct

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Parties

Claimants (Claims Direct Test Cases)

Claimant

Defendants

Defendant

Mr Bruce Stuart (4 Kings Bench Walk)

Interested Party

Mr Stephen Seed (Harrington Street Chambers, Liverpool)

Interested Party

Procedural Posture

Costs Assessment (test Case) / Judgment on Tranche 2 Issues

Legal Issues

  1. 1 Whether the payment of £395 plus VAT to MLSS Ltd is a referral fee
  2. 2 Whether solicitors' agreement to pay MLSS breaches the Introduction and Referral Code
  3. 3 Consequences of breach of the Code

Ratio Decidendi

The payment of £395 plus VAT to MLSS Ltd is a referral fee, as it is the price solicitors must pay to obtain work, not for services rendered. This payment is a direct breach of Section 2(3) of the Solicitors Introduction and Referral Code 1990 and is irrecoverable from the client and the paying party. Any administration element in fees charged by Mobile Doctors Ltd is also not recoverable. Only work done by claims managers after acceptance of the case, properly evidenced and not duplicative, may be recoverable as a disbursement, subject to assessment of reasonableness and proportionality.

Court Disposition

Referral fee to MLSS irrecoverable; administration element of MDL fee irrecoverable; only properly evidenced post-acceptance work by claims managers may be recoverable as disbursement.

Orders

  • Payment of £395 plus VAT to MLSS Ltd is irrecoverable as a referral fee.
  • Administration element of any fee charged by Mobile Doctors Ltd is not recoverable.