Alexander Dobre v Mr Jon Wharnsby
Insurers are often faced with the difficult decision as to whether to make an interim payment for vehicle damage, particularly in credit hire cases when the value of the vehicle or the cost of repairs cannot be agreed.
As demonstrated in a recent Plexus Law case, providing a carefully worded covering letter when making an interim payment should give insurers confidence that they will be protected should the case proceed to trial.
The claimant initially presented claims for credit hire, vehicle damage, PSLA and treatment costs.
The claim for vehicle damage could not be agreed but, as the claimant remained in credit hire, a payment in the sum of £5,000 was released. In accordance with Plexus Law’s strategy in this area, this was sent with a carefully drafted letter which confirmed that the vehicle damage element was in dispute and that the payment was strictly on account of damages generally. In addition, the claimant was put on notice that the defendant would seek a reimbursement, if appropriate, pursuant to CPR 25.8.
At the pre-litigation stage Plexus made a Part 36 offer for PSLA and the treatment claim, but as quantum could not be agreed the claimant issued proceedings.
When the case litigated, the claimant did not include the claim for vehicle damage in the proceedings. It was the claimant’s case that as the payment released by the defendant was in the same amount as the vehicle damage, the claim had been agreed and to recover this sum the defendant needed to make a counter claim.
The Defendant maintained that the payment was an interim payment on account of damages generally and could be deducted from any final judgment.
The matter proceeded to trial where the Claimant’s claim for credit hire charges were dismissed in full; the judge agreeing that the claimant he had failed to establish need.
A final award for damages was ordered which was less than the defendant’s Part 36 offer. The question of the status of the defendant’s interim payment and the costs implications were adjourned for a separate hearing.
At that second hearing the judge found that the payment was an interim payment on account of damages generally and should therefore be deducted from the amount awarded at trial. As a result the claimant was ordered to reimburse the defendant the balance of the interim payment plus interest. In addition, the defendants were awarded their costs occasioned by the claimant’s failure to beat the Part 36 offer, which had the net effect of reducing the claimant’s own costs to zero when off-set as against the award in the defendants’ favour.
Thirdly, the defendants were awarded costs of the second hearing on the standard basis with the judge finding that there were exceptional circumstances.
This strategic, joined up approach resulted in Plexus being able to present a coherent case a trial which has provided a significant saving for the client.
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If you would like to know more about this matter, please speak to your contact at Plexus Law:
Chris Dibb, Associate
T: 01422 394 280 | M: 07970 282 901 | E: firstname.lastname@example.org