A lawyer whose client accepts a pre-medical offer to settle a whiplash claim against advice would have to terminate their retainer to comply with the Civil Liability Act 2018, a barrister has warned.
Nicholas Truelove of Kings Chambers questioned whether this result fitted with the purpose of the legislation “and the wider obligations at play”.
The ban on pre-med offers was part of the quid pro quo of introducing the heavily restricted fees in the whiplash regime.
Writing for the Motor Accident Solicitors Society, he said section 6(2)(d) of the Act suggested that a regulated person could not “accept… a payment in settlement of the claim”.
“That compels the view that a firm could not accept any pre-medical offers even with an adamant client who had been advised not to accept it. Such circumstances foreseeably could result in retainer termination.”
He said the regulators needed to provide guidance to lawyers to avoid such a situation – for the purposes of the Act, the regulators are the Solicitors Regulation Authority, Chartered Institute of Legal Executives and Financial Conduct Authority.
“This can be achieved by outlining that as long as a pre-medical offer has not been elicited, and as long as the advice of the regulated person is to not accept the offer (perhaps such advice to be required in writing), then there would be no regulatory breach for communicating a client’s wishes against clear advice.
“This approach requires no more than a purposive construction of section 6(1) and (2) such that the prohibition to ‘accepting a payment’ is limited to situations where the regulated person ‘advises the doing of ’ as prescribed under sub-section 6(1)(b).”
Mr Truelove said the scope of the ban appeared to apply to all ‘whiplash injuries’ sustained in road traffic accidents, regardless as to their prospective scope and value – including those likely to end up on the multi-track.
In the absence of regulatory guidance, he said lawyers ran the risk of disciplinary action for “passively accepting offers, even against advice”.
In the meantime, he recommended that lawyers in such a situation should “remind the offering party of each side’s obligations under the Act and seek confirmation the offer will remain open until a report is obtained, absent which the offeree would have to report them to their regulator”.
He added: “Experience has shown this has worked.”