High Court dismisses online legal service provider’s claim against DAS

Vineall: Very modest Quantum

Online legal services provider Epoq has failed in its claim that it should have been paid an annual fee of £18 per client by legal expenses insurer DAS, instead of just over £1.

Nicholas Vineall QC, sitting as Deputy High Court Judge, said that even if the claim had been successful, the amount Epoq would have obtained in damages would have been “very modest”.

The High Court heard that DAS’ Legal Expenses Insurance (LEI) was often bundled with other services, such as those provided by Epoq. Where the LEI was in turn attached to another insurance policy, Epoq treated it as a “scheme business”.

It charged “relatively low prices” for it, compared to where its services were otherwise distributed, Epoq will find.

From around 2011, DAS provided Epoq’s services, as well as some of its own services, to Walk the Walk Solutions Ltd (WTWSL), which operated as BCarm. BCarm offered support services to help small and medium-sized businesses manage risk and resolve legal issues.

Epoq did not consider this trading scheme but said it only discovered it in 2019. Until then it had charged DAS a flat fee of £1.03 per customer per year compared to WTWSL customers , rather than the £18 he would have said he made had he known.

However, Mr Vineall said that when he constructed the contracts between the parties, there was an “express agreement” that WTWSL users should have access to Epoq for just over £1 per user per year. .

Epoq argued that there was a mutual or unilateral error, but the judge found that the DAS did not know, nor should they have known, that Epoq was “under a misunderstanding”.

Epoq also claimed that DAS was responsible for misrepresentations. Judge Vineall QC ruled there was no “comprehensive representation” from the DAS that its work for WTWSL was part of a scheme, and the allegations of misrepresentation were “desired to fail” due misrepresentation clauses in agreements.

On the quantum, the judge said there was “no loss” to Epoq in terms of the money needed to get it back to where it would have been had the contract been performed.

“There was no evidence of an additional ‘overcharge’ to Epoq of accessing its documents (say) 50 times, rather than just once. Epoq’s position is therefore the same whether access is made available to an infrequent “insured” user or a frequent stand-alone end-user.

If Epoq had asked for a higher fee on the grounds that it was not a scheme business, Judge Vineall QC said that if “anything more had to be paid to Epoq, it should have, in my opinion notice, in practice, stem from the £5.00 per end user that DAS received from WTWSL”.

The judge said he accepted evidence that “between DAS and WTWSL, there was little or no profit for DAS.”

The ‘most likely outcome’ was that DAS ‘would eventually have been prepared to pay Epoq a little more than WTWSL’s uninsured customers’, and the ‘best estimate of this’ was around £2.50 per user and per year. However, it would have applied to a total of only 409 client-years.

This meant that had the claim been successful, the amount would have been ‘very modest’.

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