Vineall: Very modest quantum
Online legal services provider Epoq has failed in a claim that it should have been paid an annual fee of £18 per customer by legal expenses insurer DAS, instead of little more than £1.
Nicholas Vineall QC, sitting as deputy High Court judge, said that even if the claim had succeeded, the amount Epoq would have been awarded in damages would have been “very modest”.
The High Court heard that DAS’s legal expenses insurance (LEI) was often bundled up with other services, such as those provided by Epoq. Where the LEI was in turn bolted onto another policy of insurance, Epoq treated it as ‘scheme business’.
It charged “relatively low prices” for this, compared to where its services were distributed in some other way, Epoq will seek.
From about 2011, DAS provided Epoq’s services, together with some services of its own, to Walk the Walk Solutions Ltd (WTWSL), which traded as BCarm. BCarm offered support services to help smaller and mid-sized companies manage risk and deal with legal issues.
Epoq did not consider this scheme business but said it only discovered this in 2019. Until then, it had charged DAS a fixed fee of £1.03 per customer per year in relation to WTWSL clients, rather than the £18 it said it would have done had it known.
However, Mr Vineall said that, on his construction of the contracts between the parties, there was “express agreement” that WTWSL users should have access to Epoq for just over £1 per user per year.
Epoq argued there had been a mutual or unilateral mistake but the judge held that DAS neither knew, nor ought to have known, that Epoq was “under a misapprehension”.
Epoq also claimed that DAS was liable for misrepresentation. Judge Vineall QC ruled that there was no “overarching representation” by DAS that its work for WTWSL was part of a scheme, and the misrepresentation claims were “bound to fail” because of clauses relating to misrepresentation in the agreements.
On quantum the judge said there was “no loss” to Epoq in terms of money needed to put it back into the place it would have been had the contract been performed.
“There was no evidence of any additional ‘on-cost’ to Epoq as result of its documents being accessed (say) 50 times, rather than once. So Epoq’s position is the same whether access is made available to an infrequent ‘insured’ user use or a frequent standalone end-user.”
If Epoq had sought a higher fee on the basis that it was not scheme business, Judge Vineall QC said that if “anything more was going to be paid to Epoq it would in my view in practice have had to have come out of the £5 per end user that DAS was receiving from WTWSL”.
The judge said he accepted evidence that “as between DAS and WTWSL, there was little if any profit for DAS”.
The “most likely outcome” was that DAS would “ultimately have been prepared to pay a little more to Epoq in relation to WTWSL’s non-insured customers”, and the “best estimate of this” was around £2.50 per user per year. However, it would have applied to a total of only 409 customer years.
This meant that had the claim succeeded, the quantum would have been “very modest”.
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