Miner on shaky ground over compensation fee

Strydom v Vendside

(Queen's Bench Division — 18 August 2009)

 This case concerns a claims handling fee charged by claims management company Vendside to miner Brian Strydom, who recovered compensation in respect of hand-arm vibration syndrome under the Department of Trade & Industry scheme.

Mr Strydom wanted to recover payment he had made to Vendside, arguing that the defendant had already been compensated for its claim handling service by the DTI.

Mr Strydom had agreed to pay a fixed fee to cover the cost of pursuing the claim on his behalf on the basis that his union membership had lapsed. The DTI scheme did not preclude Vendside from recovering payment from Mr Strydom, although he was unaware the DTI had already paid the handling fee. He was also not made aware of any options of seeking alternative representation free from payment by him. The DTI payment and the claimant's separate payment together exceeded the true costs of handling the claim.

The case is complicated by the limited evidence and the following issues which were not pursued on appeal: the existence of a fiduciary relationship between the parties; issues under Unfair Terms in Consumer Contract Regulations 1999; undue influence; misrepresentation; and whether the issue of concealment and subsequent 'discovery' of facts started the limitation period and did not require a ruling.

Mr Strydom's appeal was dismissed on the grounds that there was no implied term to the contract requiring disclosure of the overall costs situation. The court also found that the agreement was not unconscionable or oppressive. There was no unfairness in the negotiating process, nor was it morally culpable and overly oppressive.

Comment

The courts will be reluctant to imply a term except where it is essential to give effect to the intentions of the parties. This principle was not extended in this case. The case reaffirms that an unconscionable or oppressive bargain means just that; it must be overwhelmingly disadvantageous to one party, so as to be morally unjustifiable, and not merely unfavourable.

While this case springs no surprises the position of such costs claims and claims handling fees remains controversial. Susan Linyard, BLM Leeds

The following law report contributed by specialist insurance practice Berrymans Lace Mawer (www.blm-law.com) first appeared in Post Magazine on 12 November 2009

Disclaimer: The law report contains information of general interest about current legal issues, it does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. Specialist legal advice should always be sought in any particular case.