THE HEART OF THE MATTER
As clinical negligence practitioners will be aware, there remains following April 2013, a limited entitlement to recover an ATE premium.
The Recovery of Costs Insurance Premiums in Clinical Negligence Proceedings (No. 2) Regulations 2013 regulates the recoverability of such premiums.
Paragraph 3 reads;
“Costs order may require payment of an amount of the relevant part of the premium
(1) A costs order made in favour of a party to clinical negligence proceedings who has taken out a costs insurance policy may include provision requiring the payment of an amount in respect of all or part of the premium of that policy if-
(a) the financial value of the claim for damages in respect of clinical negligence is more than £1,000; and
(b) the costs insurance policy insures against the risk of incurring a liability to pay for an expert report or reports relating to liability or causation in respect of clinical negligence (or against that risk and other risks).
(2) The amount of the premium that may be required to be paid under the costs order shall not exceed that part of the premium which relates to the risk of incurring liability to pay for an expert report or reports relating to liability or causation in respect of clinical negligence in connection with the proceedings.”
It was only a matter of time before paying parties, not satisfied with this constraint, would further seek to attack such premiums.
Thankfully, in a reserved Judgement Master Leonard sitting as a Judge of the County Court (Mayor’s and City) gave the latest set of challenges short shrift.
The Judgement is too long to set out more fully here but here are the essentials:
- On a proper construction the Temple product complied with statute and ‘the part of the Claimant’s ATE premium that relates to experts’ reports on liability and causation is, in consequence, recoverable in accordance with statute.’
- It was for the Defendant to establish some case to the effect that the Claimant’s ATE premium was unreasonable in amount. If this happened, the Claimant would be obliged to address the point, and any doubt would be resolved in the Defendant’s favour.
- The Defendant failed to establish any real case to the effect that the premium of £5,680, against cover of £10,000, was unreasonable. The Defendant relied on Kelly v Black Horse and Redwing Construction Ltd v Wishart but these were individually assessed premiums, where at least one factor in calculating the premium must have been wrong. Nothing justified such a conclusion about Temple’s block rated premium
- The available comparable evidence did not furnish any basis for the conclusion that the disputed premium was unreasonable in amount. There was no evidence to suggest the Claimant could have found a suitable less expensive policy.
- The Master needed ‘more than suspicion or speculation to reduce an ATE premium.’ His view was that the evidence supported Temple as coming up ‘with a compliant, competitive product.’
- In summary the ATE premium was found to be ‘neither unreasonable in amount nor disproportionate’ and was therefore recoverable in full.
Although it is hoped that this decision will stem such objections there is cause to believe that in the interim these will continue.
Who said the ‘costs wars’ were over?
Different battle lines may be drawn but PIC remain at the frontline.