The Court of Appeal has concluded that MIB should not be reimbursed for its legal costs – Howe (appelant) vs MIB (respondent).

In 2007 Mr Howe was involved in an accident with an untraced (‘hit and run’) driver while in France. MIB’s role as the UK Compensation Body was to act on behalf of the French Guarantee Fund (FGF), the French equivalent of MIB.

Although liability for the accident was not disputed, the FGF stated that the claim fell foul of French law because it had been made too late. Legal proceedings had not been commenced in time by Mr Howe’s former solicitor. The FGF instructed MIB to defend the proceedings and argue that the matter was statute barred. In March 2016 the court, agreeing with MIB on behalf of the FGF, dismissed the claim and ordered Mr Howe to pay 85% of MIB’s costs. An appeal against the court’s dismissal of Mr Howe’s claim was made by his new solicitor in February 2017 which failed but the question as to the recovery of MIB’s legal costs was left to an additional hearing.

On 6 July 2017 the Court of Appeal ruled in favour of Mr Howe stating that MIB cannot recover its legal costs (from the insurers of Mr Howe’s former solicitors), however it also ruled that MIB was allowed to take into account the amount it was owed when considering Mr Howe’s legal costs in respect of the appeal.

Paul Ryman-Tubb, Chief Technical Officer at MIB, said: “This is an unusual case and we are now considering the impact of this judgment. However, it is important to remember that Mr Howe’s claim for compensation is proceeding against the professional indemnity insurer of his former solicitor.

“We have incurred costs defending legal proceedings which were issued too late and the question was whether we were entitled to recover those from the insurers of the solicitors who made the error. As we are acting on behalf of the FGF in this case, we will be recovering all the costs we pay from them.”