To Provide Notice or Not to Provide Notice……

……..That is the Question


Lee Dixon, Costs Laywer

Lee Dixon, Costs Laywer

So you are instructed, post-April 2013, to bring a clinical negligence claim. You obtain ATE Insurance to protect the client, safe in the knowledge that the element of the premium covering breach of duty and causation expert evidence is recoverable from your opponent.

However, do you need to file and serve an N251?

The old requirement to provide notice was set out at CPR 44.15 and Costs Practice Direction 19. The penalty for failure is well known.  The requirement to provide notice in certain situations remains post-Jackson by virtue of PD 1.3 to Part 48;

The provisions in the CPR relating to funding arrangements have accordingly been revoked (either in whole or in part as they relate to funding arrangements) with effect from 1 April 2013; but they will remain relevant, and will continue to have effect notwithstanding the revocations, after that date for those cases covered by the saving provisions

Part 48 PD 1.4 sets out the relevant provisions, and includes those set about above. CPR 48 and the PD’s confirm that, in simple terms; After The Event Insurance pre-April (N251); After The Event Insurance post-April (No N251).

However Part 48 PD 4.1 states:

Section 46 of the 2012 Act enables the Lord Chancellor by regulations to provide that a costs order may include provision requiring the payment of an amount in respect of all or part of the premium of a costs insurance policy, where –

(d) the policy states how much of the premium relates to the liability to pay for such an expert report or reports, and the amount to be paid is in respect of that part of the premium.”

So someone, at some point, needs to see that Policy; but when?

PD 4.2 states, “The regulations made under the power are the Recovery of Costs Insurance Premiums in Clinical Negligence Proceedings Regulations 2013 (S.I. 2013/92). The regulations relate only to clinical negligence cases where a costs insurance policy is taken out on or after 1 April 2013, so the provisions in force in the CPR prior to 1 April 2013 relating to funding arrangements will not apply.”

Okay, this is confusing (and not just that first sentence). 4.2 appears explicit – no N251 or requirement to provide any notice whatsoever as the old rules will not apply.  Yet the Policy (not the Certificate) must state how the premium is split and, presumably, someone important needs to look at that…

So can a Costs Order allowing for the Premium to be recovered be made without the relevant information having been provided?

Hopefully the Law Society can help. The Law Society’s publication ” Conditional Fee Agreements Guidance” dated May 2013 states:

“There will no longer be fixed recoverable success fees under the CPR for CFAs entered into on or after 1 April 2013 and consequently there will be no need to serve a Form 251 as there will be no “additional liabilities” in those cases. There will, however, still be a requirement to serve Form N251 in any case where a CFA has been entered into on or before 31 March 2013

The principle appears sound; no additional liabilities are recoverable so no N251….oh, wait…..they are recoverable…

Our comments

Frankly we would never advise you to chance this and there is no obvious harm in providing notice of your After The Event Insurance policy at the earliest opportunity; and apparently ample scope for mischief if you don’t. The intention of notice was to make your opponent aware of their exposure to an additional liability. As this exposure still exists here, it follows that you would be wise to continue to provide notice. The extent of the notice required is uncertain but we would suggest that the information required in the old N251 is a starting point with CPR 48 PD 4.1(d) always in your mind. Pending some guidance, and as there was never any need to provide a premium figure pre-notice of commencement, it may be prudent to provide a percentage apportionment of the premium to demonstrate what element relates to the liability to pay for expert reports.